The Holy Grail of trading is to find a ‘steamer.’ This is the term given to a horse with rapidly shortening odds. If you can find a steamer relatively early on in the morning, you could make a huge profit without being concerned about the outcome of the race. The beauty of trading against punting is that you only need to worry about whether the horse is going to be heavily backed.
When backing a horse to win, you have to determine whether it is the right course, distance, going and a myriad of other factors. Even if you believe you got it right, anything can happen. It could be the best jumper with great stamina and fall at the first because the jockey misjudged the fence. It could be the fastest horse in the race but get held up etc. With trading, you don’t have to worry about any of those things because all that matters is the horse’s price.
Why Do Horses Shorten In Price on the Exchange?
The simple answer: The reactions of people! As you know, the mystical ‘market’ is a human creation, so it moves based on how we react to different bits of news. If several prominent tipsters back a certain horse, its price is likely to shorten. Of course, the Betfair Exchange is also inhabited by a lot of ‘sharks’ who know what they’re doing (I’m looking at you Michael and Eddie), so their actions also influence the market. Experienced bettors always look at the following:
- The form of the horse, jockey, and yard.
- Opinions of racing pundits.
- Conditions of the track.
- The opening odds offered by ‘traditional’ bookies.
A horse’s odds could also be affected by these factors:
- Type of race
- Amount of prize money on offer
- Any equipment changes to the horse; the addition of blinkers for example
- The declaration of non-runners late in the day
Then there is the small matter of the ‘herd mentality’ where people decide to ‘follow the money.’ This collective action naturally drives a horse’s price down even further. Remember, not everyone on the Betfair Exchange has a clue what they’re doing.
Finding the Steamers
All that being said, some of the best traders openly admit to knowing little about horse racing in general. It’s true that you don’t need to be a racing expert to profit; you just need to learn how to spot the signs of a price falling.
Before going any further, I have to let you know that your best chance of making a consistent profit is by investing in trading software. You can read reviews on Race Advisor and determine the best one for your needs.
Regarding the identification of horses likely to shorten in price, there are several resources at your disposal. You can check out the most tipped horses of the day on OLBG and check out odds movement on Oddschecker.
I took the liberty of checking out OLBG to give you a screenshot of what to expect. You can see there were four horses tipped on November 30. Lovely Job and Breath of Fresh Air had quite a few tips, and their odds were capable of shortening further. Diese Des Bieffes was already 1.33, so there was little chance of making a profit there.
The next step was to check out how they were faring on Oddschecker. As you can see, Lovely Job’s odds were drifting across the board which means the horse is probably not a good trading option. In contrast, the odds of Breathoffreshair were shortening on every bookmaker except Betfair Sportsbook.
You should also check out the Top 10 Steamers on Attheraces to get a glimpse of the horses with shortening odds. You’ll notice that Breathoffreshair featured here as well. It odds was 2.25 at the beginning of the day, and by midday, it had been backed into 1.91. Since the race didn’t start until 9:15 pm, there was plenty of time for a further price reduction.
I waited about 45 minutes just to see if its price would drop any further and by 12:45 pm, Breathoffreshair was 1.81 on the Exchange!
For the record, Breathoffreshair had won its last two races and avoided a penalty for its course and distance victory last week. With Joe Fanning on board, it was hard to back against the heavy favourite. If you knew all of this information early in the morning, you would have been able to get ‘on board’ and Back to Lay when the horse’s price was 2.10 or thereabouts.
Bad Trade, Good Trade
Other interesting horses on the Top 10 Steamers list included Fight Away Boys and The Ogle Gogle Man. Fight Away Boys moved from 4.33 to 3.00 according to Attheraces, and its price had shortened across all bookies.
But when I checked it at midday, it had already moved into 2.75 with some bookies. However, by the time of the ‘show’ 10 minutes before the race, the horse was available at 3.25. This was a clear sign that the horse had probably reached its price peak and it was likely to start drifting before the off.
For the purposes of the article, I placed a small wager on Fight Away Boys at 3.25 just to see what would happen. Within seconds of placing the bet, its odds had shortened to 3.15. Perhaps it was going to shorten to 3.00 or less after all?
NO! Its odds drifted to 3.6, and you would have sustained a loss of around 11%. Now would be a good time to bail out of the trade!
Here’s what happened if you didn’t; further drift to 3.7 and a loss of around 12% on the trade; ouch! The lesson from this trade is to not just rely on the numbers. You still want a horse that is generally fancied with few question marks. While Fight Away Boys was the favourite, there were three realistic contenders, so backing to lay the favourite in this instance was always a risky proposition.
What you’re really looking for is a clear favourite; the second favourite is preferably a good bit behind but not always as we see in our examples of getting the prices right. Solomon Grey was odds-on at most bookies, and its price was shortening across the board. While Knocknanuss is a close second favourite, you could see its price was drifting.
You can also see that Solomon Grey’s price had already come in from 2.25 to 2.00. When I checked Betfair Exchange 10 minutes before the off, I found that its price was 2.14. It was clear that the horse’s price had room to fall:
And fall it did. It had dropped to 1.99 about two minutes before the off. Within seconds of the race starting, its odds fell dramatically to 1.59 even though it wasn’t the front-runner. Backing at 2.14 and laying at 1.64 would have resulted in a very nice profit.
Although it wasn’t on the steamer’s list, Something Lucky tipped a lot of boxes. It was the clear favourite, and its price was being cut across the board (odds shown at about 10:30 am).
10 minutes before the off, its price was 3.85 which meant it had obvious potential to shorten given the weight of money that was on it and the fact it was 2.75 in places in the morning.
Sure enough, its price was significantly cut, and it was 3.1 a couple of minutes before the start of the race. Laying at 3.15 after backing at 3.85 would have been an excellent move.
Although you don’t have to be a racing expert to trade, knowledge helps a great deal because it can tell you if a price shortening or rising quickly is down to a horse’s issues or whether it is the weight of money from ‘mug’ punters.
The Attheraces steamers guide is handy, but Oddschecker is invaluable. Focus on clear favourites that have shortening prices and a good chance of winning. You’ll attain success by going against your natural instincts which are to cash out when a trade is going well and hang on when it is going badly.
If a trade is going sideways, cash out ASAP. It may swing back in the other direction, but it isn’t worth the risk. Sensible traders know there are a huge number of trading opportunities weekly, so they don’t get greedy. They stay smart, earn a small but consistent profit and are smiling at the end of the year.