Introduction

About a 18 months ago I started looking at Betfair and fairly quickly realised that straight betting was a bit of a mugs game and quickly lost my initial £100 pot.

So I looked into the subject a bit and realised that hedging on horse racing was the way forward. Doing this locks in profits no matter the outcome of the race. Basically if you bet at a higher price than lay on the same runner then you'll achieve a profit no matter what the outcome. So on a rising market lay then back when the price has risen, conversely on a falling market, back then lay when the price has fallen. The amounts to place at these two prices are in the ratio of the prices.

e.g. Falling market: Back £10 @ 3.10, then Lay £10.33 @ 3.00 (10*3.1/3.0) will give you a guaranteed profit of £0.33 - not much, but a profit!

This is scalping and the idea is to get in and out quickly making a profit on every race. You don't concern yourself with the actual horse race and gain nothing from watching or listening to it.

This trading (scalping) can be done through the Betfair website, although to do it properly you need to be either extremely good at mental arithmetic or use a calculator very quickly.

Then I discovered Racing Traders (http://racingtraders.co.uk)- this is an excellent tool for trading on the horses and there are some excellent tutorials on their site, which explain the processes and techniques very well. They provide a tool to enable you to trade on the horses and hedge each bet correctly to achieve the same profit on a win or no-win situation. I urge you to give this a try if you want to understand the techniques.

The only problem is that the UK horse racing is on during the day mainly, whilst I am at work and being self employed taking time off to scalp is not sensible.

Anyway, this brings us onto the subject of automation. I am an IT consultant and work in Java, Oracle and other related things, one of my obsessions is automation and I have automated many of the testing processes in systems I work with using some COTS products like HTMLUnit and Rational Functional Tester and some I have written from scratch myself.

So I set myself a task to automate the scalping of horse racing using the Betfair API, which is freely available and well documented. This seems possible as the decisions that you make as to whether to place a back or lay bet are based on determinable factors and values - the type of thing a computer is good at!!