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Weight of Money on Betting Exchanges

Weight of Money on Betting Exchanges

Weight of Money on betting exchanges – Dead or Alive?

This article aims to enlighten and inform about the Weight of Money and its influence on the trading process, which is expected to be successful. “But that is the Weight of Money?”

In English, it has its initials “WOM”, which is usually used for “Word of Mouth” instead. I want you to read this article carefully and then use “Word of Mouth” to inform your friends and colleagues, okay? Sit tight.

Okay, WOM or Weight of Money, what does this mean exactly? Without going into too much financial/economic details, Weight of Money applies to trading using the principles of supply and demand. If there is a great demand from the bettors to bet against (lay), all of them will compete and the price should go up. The opposite is true as well.

You are now remembering of those news about the stock market rise. Not yet? Remember those movies where there is an auction and there’s four or five, if not more, people fighting hard, bid by bid, for a determined art piece or a rare jewelry piece, which raises the price and consequentially the profit for the auction house and, of course, to the seller?

Well that will give you an idea, of what the Weight of Money is. However, unfortunately, things don’t always go as expected. This is a barrier that makes trading a bit hard.

Couple of years ago, several traders contacted this article’s author, informing him that Weight of Money was dead, that no one really knew it but that it didn’t work anymore!!!

That isn’t all true though, because several people have written about the death of the Weight of Money during that period. So, what is my opinion about regarding this topic?

Well: my point of view regarding this issue has two different orders of reason. First we choose the event type, and then we consider the difference between live trading and pre-live trading.

Event Type

Many people get involved on a horse race about 10 minutes before the market closes, and cease their transactions a little bit before the closing of that same market.

Let’s not forget that trading on horse races is made before the race (pre-live) and during the race (live), but the markets are pretty different in those 2 situations, i.e. , the trading before the race starts has nothing to do with the trading made after the horses leave the starting gate at full speed.

Like I explained in an article called “Multi Task”, you always have to remember what type of event you are trading on, and when the event will be suspended or not. It is important to be prepared and to know the “rules of the game” beforehand.

Horse Racing

When we consider an horse race, we have to remember that the race will be suspended right before the race begins.

As soon as the race goes into “In-Running” or “Live” , it will only be suspended when the race ends and the first horse goes through the post or finish line.

If we consider now the “pre-race” trading, we need to understand that trading will be stopped and suspended when the market closes right before the start of the race, because that is scheduled to happen in that exact moment, and every trader is expecting it.

Football

Unlike horse racing, you need to keep in mind that in Football, before the match starts, the market is just like the horse racing markets, since the market is also suspended seconds after the referee’s whistle and kickoff.

However, when the game goes into “in-play”, things start to get interesting, but they are a bit different than horse racing.

“In-play” football matches are suspended when a goal is scored and, as far as we know, a goal scored isn’t a pre-determined event or a scheduled one.

A goal can happen at any moment during the 90 minutes of a match. The “In-play” market can also be suspended in case there’s a sending off. Remember that in horse races, the market is only suspended when the first horse crosses the finish line.

Multi-task

Along with the previously mentioned topics, we also have to consider what was said on the article about Multi-Tasking and remind you that when we are not trading “in-running” or “in-play”, i.e.

When we are trading on markets that will only be suspended before the matches/races start, the prices won’t be subject to any natural decrease/reduction, due to the chance of a certain event happening or not.

Timed Event

To recapitulate, we have the article about Football, from which I quote: when we are on an “In play” or “In running” market, we are operating on a timed event, that has a pre-defined timeframe, during which prices will vary according to the probability of an event, that we have “backed” or “layed”, happening or not. Like a goal for example.

Imagine that Chelsea beats Manchester United 1-0 on a certain football match. As the time passes and the clock gets closer to the final whistle, the price for a bet in favor of Chelsea (“back”) will get smaller and smaller. On the other hand, the prices for the draw as well as for the Red Devils will increase continually.

Let’s imagine that we have 20 minutes left until the end of the match, and Chelsea is at 1.35 available to BACK. As the time goes by, the Weight of Money will work very well, very one-sided, while the price for a Benfica win continues to decrease towards 1.00.

WOM spoofing or “Impersonating the Weight of Money”

Spoofing is a word that can be interpreted as “imitation” or “scam”. And both of them can cause some problems in the markets.

Considering the example given above, we’ll ask ourselves one question.

As professional traders, or remotely educated/enlightened, where or when do we have to be prepared to perform a bit of “spoofing” or “deception”? That is, a bit of craftiness that creates a trap, misleading and scaring “newbie” or “weekend” traders?

These less experienced traders falling into our ambush, would lead to a “money transfer” from them to us. This would be that would distract their attention, some sleight of hand that would help us win money.

For those who like History, you will certainly remember three episodes when fire was used in the same fashion.

It was used by 3 different generals, to deceive their enemies. One was Chinese, other was a gladiator on the run from the romans and the third one was a Portuguese who was facing an army of Ottomans that were stronger in every aspect.

But I digress from what really matters. Have you find the answer to the question I posed before?

When and where do we fool “newbies”, pardon me, less experienced traders in order to take their money?

Answer A: On the relative peace and quiet that is pre-live activity, where the market suspensions can’t cause us any trouble.

Answer B: During an “In-Play” match where a goal can ruin us almost completely??? Think about it.

Traders should be aware that other professional traders know that the Weight of Money is one of the favorite tools of their peers, so they will be ready to try and fool weaker traders, deceiving them, forcing them to make mistakes and “catching” them, in order to rip them off their money.

They can do this in perfect calm and harmony on a pre-match or pre-race session, knowing that the only thing that can force inexperienced traders to make mistakes is their inaccurate market reading. A market that can’t be suspended at any time gives the professionals a clear advantage.

The way this happens is very easy and clear for the professionals: They charge a market one way or the other with money that they never intend to actually trade (this happens all the time).

They trick other traders into thinking that the market is “heading or pointing” in a certain direction and, when the “professionals’ fake money” is cancelled and taken off the market, the market moves in the opposite direction like a pendulum. This results in a loss for the inexperienced traders. This happens all the time, on betting exchanges but also on the financial market.

Weight of Money that works

What can we do? If anything worked 100% of the times, markets wouldn’t exist, so don’t expect the Weight of Money, or anything else for that matter, to work 100% of the time.

Be prepared and aware that sometimes you need to take a loss, and you should be careful in order to cut your losses when this happen… I can tell you for sure that on pre-race markets, the Weight  of Money scam can and will occur.

I’ll repeat again, the logic is: there is money that can be placed either on something (Back) or against (Lay), but that money can never even be traded; it might just get cancelled when the professional trader wishes to do so.

To finally close on this topic, normally if there is enough money on a certain side, then the Weight of Money will work normally.

Weight of Money In-Play

Do you still remember the Chelsea example I used before in this same article? Well, if we look at it again and consider that the Blues are leading 1-0 at a price of 1.35 with 20 minutes remaining in the match, you will se the price of Chelsea bets (Back) dropping steeply.

Therefore, using the logic of my previous explanation. Around this time, you will see the Weight of Money in action and working in all its glory. In order for the price to drop from 1.35 to 1.00 there will have to be more bets for Chelsea (Back) than against Chelsea (Lay) and if you look at the graphs and other indicators on the platform or on specialized programs, you will see this happen in real time.

The reason why the Weight of Money works so well on “in-play” markets is because well, in first place, we are on a time limited event, with a well defined and known duration, and we see the price weakening. On 2nd place, there’s a lack of professionals who are always ready to place their traps or baits and fool the smaller or inexperienced traders.

And these professionals are absent because a sudden goal can cause them huge losses, so they stay away from the In-play markets. Imagine placing 10 000 Euros on Chelsea to win and then Manchester United tie the game on the last play of the match… No professional will expose themselves to this big of a risk if he didn’t actually intend to trade. Unless he had lost his mind.

So for those that say that the Weight of Money is dead and buried, I can assure you that it isn’t, it is alive and well, so be very careful with the “Spoofers” (deceivers) in action, especially on pre-race or pre-match markets.

Because they are out there…

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