Why Tennis Trading is Easier Than Forex Trading
If you have ever tried to make money Forex trading you will know just how unpredictable and frustrating it can be. Thankfully, tennis trading is both predictable and enjoyable.
Before I begin, let me make a full disclosure: I have traded forex on and off for many many years. Binaries, CFD’s, Options, Equities etc. You name it I’ve done it. And no, I never made a living from it!
The problems with Forex trading
As individuals, when trading a currency pair you have absolutely no idea why the prices are rising and falling. And if you don’t understand why they are moving how on earth can you predict a price change?
Too many traders expect to be millionaires ‘one day soon’. It is unclear how many people really make money trading forex let alone become a millionaire. A message on the IG Index website gives us a hint “75% of retail investor accounts lose money when trading spread bets and CFDs with this provider.” Hmmm…
The adverts from Forex platforms claim you can make huge profits (see point 2 above!) but that’s because of leveraging. This is where you place a small value trade but your exposure to the market is several times more than your stake. So forex price movements magnify your profit (and loss) greatly.
No Clear Strategy
Forex prides itself on having endless strategies by using indicators like Stochastics, Moving Averages etc or trading systems like Point & Figure, Ichimoku and many many more. But here’s the challenge: do any of them really work? Not occasionally, but consistently. No they don’t.
All forex strategies are based on maths. The reason for this is because no-one really understands why currency prices rise & fall in the short term.
Forex can be traded short term using 5 minute or even 1 minute charts but even seasoned forex traders will tell you this is like playing the lottery. The only real chance of making money in forex is looking at the longer term. e.g. will sterling increase against the dollar this year? These kinds of trading timelines and decisions and more akin to investment than trading.
The adrenalin rush can be both addictive and enjoyable when trading forex. Despite the poor trading results, it can be fun trading this way as traders cling to the hope of making it big…one day.
Lack of Training
Whilst there are many training courses available to learn forex the sad truth is that most forex traders don’t bother. It is so easy and quick to open a trading account, deposit your money, read a few blogs to ‘learn how to trade’ and away you go!
So why is tennis trading easier than forex?
Let’s compare and contrast with forex
Player Odds ARE Predictable
One of the best aspects of tennis trading is understanding why the price moves the way it does. Once this is understood you can predict WHERE the price will go IF one of the players takes the lead.
There is even a tool to help predict where the odds will go
Realistic Earning Expectations
Tennis Trading, full or part time, will not make you a millionaire. Why? Because the Betfair tennis trading market is nowhere near the $6.6 trillion size of forex.
Unlike forex, that is just one huge pool of money traded by banks, institutions and individuals, tennis trading is tiny. In fact, each match is like a small market in that only people trading that match can affect the prices.
So whilst the maximum bet size in Betfair is £2000, in practice this is rarely applied because there is insufficient liquidity (i.e. not enough traders) for trades to be matched.
A more realistic expectation for making money trading tennis matches is to earn a decent living, like any other well paid job.
It is very achievable but like any job requires training, practice and experience to become consistently profitable.
Low Risk Trading
Thankfully, there are no margin calls and the maximum amount of money you may lose in a trade is known at the outset.
Providing you trade sensibly, meaning you exit the trade the moment you realise it has gone wrong, typically you will never lose more than 25% of your initial stake value. Most of the time it is nearer 5-10%.
Tennis trading is a low risk alternative to forex.
Easy to Understand Trading Strategies
As there is only ever one winner in a tennis match AND the match itself doesn’t last for more than a couple of hours, it is much easier to devise trading strategies based on what may occur.
For example, someone is going to win the 1st set. Pre-match analysis helps you get a feel for who that might be so what happens if they don’t win it? You could then back the 1st set loser because their odds will be much higher than at the start of the match and your pre-match analysis suggested they were the strongest player.
Feel free to have a look at our list of the most profitable tennis trading strategies.
As we just mentioned, tennis matches don’t last that long.
Unlike forex where you often have positions open during the night or sometimes days or weeks, with tennis trading your mind switches off when you finish trading.
Yes, emotions can play a part in tennis trading too but given the payouts and losses are so much less than forex there is far less stress involved.
Also, whilst tennis is an enjoyable game to watch, most tennis traders don’t wait to see who won the match. It doesn’t matter because, unlike a bet, you don’t wait until the end of the match.
Tennis traders trade in and out during a match. With practice, you learn to follow the path of your trading strategy and don’t care who wins or loses.
Sadly, far too many people start trading (tennis, football or forex) without learning how to trade.
No-one would ever expect to be good at playing tennis without ever picking up a racket before. So why people expect immediate payback is puzzling.
The good news is that training is available. There are an increasing number of course available online and we have our own free course Learn Tennis Trading which is ideal for beginners
So if you, like me, have been trading unsuccessfully in forex for far too long and want a more predictable method of trading, then tennis trading could be for you.
I hope this help you