Financial betting is very similar to sports betting, except you are betting on the outcome of a market instead of a game.
Financial bets are similar to sports bets.
How much are you willing to stake?
* Payout – The amount you'll receive if you win your bet
Return or odds is the ratio of the payout to the stake.
* The outcome is the “prediction” that you make
You could, for instance, place a bet in the following way:
* Bet – $10
* Payout – $20
* Return – 100%
* FTSE (London Stock Exchange Index), to rise today between 13:00 – 14:00
It's pretty easy, right?
Why bet on financial markets?
It is simple
You can bet as low as $1, which is less risky.
You can earn money
This last point is crucial. You *can* earn money. You *can* lose money.
You need to look for low-cost bets that are mispriced in order to make money over time. What does that mean?
Financial betting services are businesses. Like any business, financial betting services have investors to please and expenses to cover. They make money by charging “fees”, or fees, on their bets bahis siteleri.
They do not charge any fees or commissions, but instead use a “spread” or an overround. The spread is the price they charge for a fair bet. If it is $x then their spread is y. Over time and on average, the betting profit should equal the spread.
It is important to only bet on bets with low spreads, e.g. “good prices”. If you make accurate predictions and the spread is low, you will be able to profit in the long term. You have little chance of winning if the spread is high.
Spreads can be difficult to determine by betting services. You need to know how betting services price their bets in order to determine the spread and how good the price really is. We'll explain how to calculate the spread in a moment. It is helpful to understand how betting services calculate the “fair value” for the bet. They then add the spread onto that figure to get the final price.
Financial bets can also be considered an option. They are called binary options because they have a binary outcome (you either win or you lose, there is no in-between). Black-Scholes is a widely accepted method of determining an option's fair value. This model is widely accepted in the financial market and other industries for determining the fair value of an options.
The model, although complex, can be simplified to say that the price will increase as the time passes and the volatility of the assets increases. (Volatility is the measure of the amount the asset prices change per unit time). If one bet covers a period of one hour, but another is for one day, then the price for one day will be higher. If one bet is placed on a calm and another on a turbulent market, then the price of the bet on the turbulent market will be higher.
Google “winning trading strategy” or “make Money Markets” to find a wealth of information. Most of the information on this site is utter garbage.
We would be rich and retired young if we knew a way to make “foolproof profits” in the markets. This is not reality. In reality, the markets can be unpredictable and you only have a 50/50 chance of getting it right. If you can get it right 55% of time, then you're doing well. You are doing an excellent job if you can be right 60% of the time. You are a world-class person if you can get 70% right.
You should aim to be in the range of 55-60%. If you are able to do this, and you only place low-cost bets, then you can earn 3-8% ROI.
How can you achieve a win rate of 55-60%? Remember that all financial bets come in pairs. For example, a pair of “rise/fall”, “hit/miss”, etc. The total probability for each side must add up to 100 percent. For example, if 60% of the sides occur, the 40% probability that the other side occurs is required.
You should look for bets with a *favorable* mis-priced price. The odds implied by the price of the bet are *lower* than the odds implied by your method. You will eventually win if you pick the pair with the favorable mispricing.
Here's a simple example. Imagine you have a coin with a 50% probability of either heads or tails. You'd be foolish to not bet on the heads if someone offered you a wager that was priced at 45% for the heads and 55% for the tails. Why? Why?
How can you identify mispriced wagers? You can do this in a couple of ways:
The betting service takes the easy route and prices each side of the bet as 50% when they are actually not 50%.
The betting service overcomplicated things by pricing each side of a bet differently from a probability of 50% when they are actually at 50%
– The betting service has made an error with the pricing, and the probabilities of the pair are not 100%.
There are millions of financial bets that are available every day, so it is difficult to find the ones that are mispriced.
You may ask “but what about *predicting* the market – using economic data, chart patterns, or tea leaves to accurately predict what the market will do?” Why don't you help me?
Good question. We largely adhere to the random walk theory. This hypothesis states that financial asset prices tend to be unpredictable most of the time and especially for the short time periods covered by financial bets. Black-Scholes, and therefore option pricing and financial betting pricing, assumes a random walk. We don't try to predict the markets, but instead focus on cheap, mis-priced wagers that should yield an average of 3-8% return on investment.
If you have consistently been successful with fundamental analysis, technical analysis or tea leaves to make your predictions (using patterns in price charts to determine future prices), we congratulate you and encourage you to continue using these methods.