How do you spot a reversal in a market? Do you follow the established trend? How do you select the horse race you are going to trade? Starting today, I'll be publishing some questions I keep receiving in my mailbox and I'll answer them here (although I have also replied to the original senders). Since I have many emails with plenty of interesting questions, I'll begin with sports trading as it is the most popular and continue with other gambling areas like poker and sports betting. I already have a F.A.Q. section under the Professional Gambling tab for you to take a look.

Today's questions came from a Danish who has just started trading the horse racing markets, named Tony. Let's see them in detail...

• How do you spot a turning point in the market?

I used to spot a turning point (reversal) by the market depth 90% of the time, and by using the charts the other 10% of the time.

A trending market will eventually “dry up” from the buyers/sellers (layers/backers) and it will correct itself in a matter of minutes. Watch the amounts in the blue and purple boxes and you’ll do just fine. However, you should always have the chart on screen to identify support and resistance levels.

• Is it better not to get involved when the market drifts or is coming in fast, but instead wait until it reaches the top and then falls back a few ticks?

In Betfair races I have found that the best way was to trade a trending market. So, if the odds drift or steam heavily, jump on board and be ready to close positions immediately if they hit a stop (or if you witness some sort of inactivity). It is some kind more rare to spot breakouts, although if you do spot it, you’ll profit in less time as the odds’ movement would be much more fierce. My advice here is to go for a few ticks in a trending market and for a couple more when there is a breakout.

The other situation you mention (often called retracement) is a little riskier as the original trend might catch up and you will be trapped inside it.

I used to say to follow the market, never go against it.

• Do you select your races, based on what the tipping services are tipping, or are you just trading all the races?

I traded almost all the races and had no other window open apart from Internet Explorer with Betfair inside it. I had no idea of the news, tipping services, rumors and so on. Watch the market, keep an eye on the chart and you’ll do ok I think.

I'd like to thank Tony for contacting me and if you'd like to get in touch with him, let me know.