Liquidity.

Don’t know why but it sometimes gets my goat when you see us gamblers borrow terminology like this from the financial world. Not because it isn’t true but to the majority, it has no effect. If a market is so thin that you can’t get a £200 stake on at a certain point, then bide your time.

I borrowed some automation from the T20 I’ve been using for NFL this evening and it did seem to have effect, however. All my automation works on several conditions, one which is the relation between current price and whether a bet is placed.

I can divided this down to back price, lay price or last traded price. It might seem trivial but is relevant on whether you get matched or not. A thin market may have significant gaps, so when you choose to back when lay price >1.7, your can miss the boat. Your back bet is actually an offset +10 ticks, the market bounces back and you hold a position opposite to which you originally intended.

Backing when back price >1.7 holds a better chance of being met, adding last traded price >1.7 is better and altering the back price to a few ticks lower increase your chances of being met even further. Naturally the opposite applies to lay rules.

I spoke to a high volume trader  recently who spoke of ‘flow of money’ – the amount of cash coming in and out of the market according to time. It perhaps has more relevance that general volume figures, and he places value upon this figure when entering a market.

Liquidity is an important figure to consider when deciding your stake, automation type and market movements but it’s not the be all and end all.

 

 

 

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