The conventional wisdom for casual bettors is - if you know the sport, then it’s easy to make money from it. You will have heard this at the pub on numerous occasions. If you start talking about a numbers based approach you would probably be met with scepticism or laughed off as some kind of ‘stats geek’. Yet, almost all professional sports bettors will tell you that long term success is ALL about knowing the numbers. So do you really need to know a sport to make money on it? Or is knowing the maths involved enough? We argue that sometimes ‘cold trading’ could be the more profitable and least stressful option.
So what is the difference between a ‘hot’ and a cold trader?
The difference between a hot and cold trader
Now, both types of traders can certainly be profitable and there are many so-called ‘hot’ traders in the industry. Traditionally, successful professional sports bettors would have been hot traders and there are still many who follow this process today. However, being a hot trader isn’t easy.
With so many opinions to choose from, how do we know which are the most accurate?
There’s too much noise
Nowadays, there is 24 hour sports news coverage, thousands of websites and radio programmes devoted to sports content. It can be a challenge to find which experts to listen to and which to ignore. Many sports pundits on TV may have had a long history of playing the game but very few will have been successful betting on it. This is key to understanding how valuable their insight is to your betting success.
It’s time consuming
Although the process can be streamlined the longer you have been doing this, it still takes time to analyse each game and research them. This is a necessary part of the job but theoretically, you could spend a huge amount of time researching a game from so many different angles. You need to know what you are looking for and how to apply this to finding a value bet. Many professional traders spend significantly more time researching their bets than actually executing them.
The process can be subjective
This kind of process is subjective and therefore can be prone to our own biases. Sometimes you might want to make a certain type of bet and so you will find the data you need to support that and conveniently ignore the rest. This can be quite common for traders who are looking for bets on goals, for example. How do you judge which statistics are more important for this particular game and which are not? How do you weigh these and rank them in importance? How do the statistics relate to the context of this actual game? For example, maybe both teams have scored goals for fun in their last ten games, but this game is the final one of the season and the winner will get promoted. Maybe a team has just fired their manager? Maybe the favourites have ended up getting food poisoning 2 days before the game? How to calculate how much impact this has can be very difficult and is open to interpretation. Each person might weigh these factors differently. Sometimes, you can also go too far the other way and read too much into the context.
A recent example was in the Tottenham vs Newcastle game, where days before, Serge Aurier tragically lost his brother. Many traders thought that Tottenham’s price was too short and that they would have a bad game because their minds would have been focused on this. However, Tottenham ended up winning the game 3-1, which would have been in line with what the statistics and data suggested. Another recent example is Wigan. They have recently gone into administration (which means they have no money and might have to sell their best players). Some traders (me included), thought they might struggle for the next few games because of this. However, they recently beat Hull 8-0!
You can get emotionally attached to the results
Of course, all professional traders will tell you that you have to remove emotion from your betting and that you have to regulate your emotions where possible. This is all true and I am sure they all do this. However, if you lost 20 trades in a row, you would have to be a robot to not feel even a little frustrated. So imagine, if you spend hours researching your games and looking into every possible angle and then the results go against you for a long time. As much as we would say otherwise, this may influence how you trade the next set of games and either make you more cautious or on the flipside, if you’ve hit a good streak, maybe be a little too adventurous.
How good are you?
Bookmakers have highly advanced software and teams of highly experienced odds compilers that come up with their prices. Some bookmakers even hire teams of quantitative analysts who create highly advanced models for their pricing. There is usually a reason why they have priced their lines and a variety of outcomes have already been priced in. That’s not to say that they get it wrong, but it is very tough to beat them and only a small minority can do it consistently. The hot trader must have supreme confidence in their own ability to know more than the bookies on a particular market. They must also assume that the edge they have had in the past will still be an edge now and in the future.
Although hot traders can be successful, another method is cold trading. It is important to note that cold trading is not just blindly betting on anything. Cold trading is also not the same as copying tipster bets. Using a tool like Trademate, you can cold trade a number of events, but always with value on your side. A cold trader is looking for price mismatches and bookmaker lines that are out of sync with the market. They are looking for prices to fall and for their bets to beat the closing line (and therefore give them expected value). This means that they are interested in price movements and not necessarily the events themselves. Why might you consider cold trading?
Saves you research time
A major benefit of cold trading is that you save yourself valuable research time. As long as you have a way to identify value in your chosen market, you do not need to research the event. Long-term if you keep making trades like this, you will be profitable. You can spend more time actually making trades than researching them.
You can still profit from sports you know nothing about, using the cold trading approach.
You don’t need to know about your chosen sport
A hot trader will tend to stick to one or a few sports that they know. Cold traders can apply their knowledge to different markets. They don’t need to know the names of any of the players playing, any previous history or form.
It removes subjectivity
As a hot trader, you may talk yourself out of a trade based on your interpretation of the data. A cold trader will place their trades based on the price and not their opinion. The cold trader is confident in their belief that the more they bet in this way, the better their chances of beating the closing line. This removes any biases they might have about the teams that are playing or the game context. Sometimes, this knowledge can be useful but other times it might hinder our profitability.
It removes emotional attachment
Maybe I am in the minority but I am not the biggest fan of Nicaraguan baseball. However, if Trademate can find me an edge on it, then I will happily bet on it. Not knowing the teams, players or the sports can be a great advantage in this regard. We are playing the numbers and in the long run, this removes a significant mental obstacle from achieving success as a professional bettor.
Neither approach is perfect and both have their advantages and disadvantages. You might find that one or the other approach suits your own personality and temperament better than the other. However, if cold trading suits you better, or even if you want to add a cold trading system to your repertoire, Trademate is the tool for you.
Check out this link to a podcast where Punter2pro founder, Toby Aldous, discusses the idea of cold trading with our own Alex Vella. For some inspiration on what you can achieve with a numbers based approach to your trading, check out our articles on Brighton owner, Tony Bloom and Brentford owner Matthew Benham.
Written by Neel Shah. Neel is a full-time sports trader and content writer for Trademate Sports.
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