1. Be aware of the dangers of wishful thinking

The race for the Presidency was something that many punters, including me, cared passionately about and with that mind-set it is very easy to get carried away with wishful thinking. The only evidence you see is that which supports your desired outcome. So when the the exit poll leaks started I felt a sense of excitement and was one of those who backed Kerry strongly on the betting exchanges.

The news about the huge queues at the polling station and that turnout was at record levels led me to believe that unlike 2000 the left had got its act fully together and that a large proportion of the new voters were for Kerry. I called it wrongly.

In the past I’ve imposed a strict personal rule on myself not to bet on the Lib Dems because I recognise that in my desire to see the party progressing I find it hard to be objective. This was a rule I broke in July at Leicester South.

2. Be aware of the power of trading

Betting exchanges such as Betfair give you the chance to both back and lay in a market so if you can predict price movements you can cover yourself in any outcome.

On Tuesday night I began backing Kerry heavily when things seemed to be moving in his direction and I had a number of bets just above and below evens. But then as the price got tighter and tighter I was able to get out of my whole Kerry loss position by laying him at about 2/5. At the time this was just insurance – I did not know what was going to happen but figured that restricting my potential winnings to 60% with no risk of a loss was much better then staying in for the full 100%. That saved my bacon.

On nights like Tuesday there is a huge potential for over-reaction and if you can read it then you will benefit.

3. Ignore exit polls

No doubt there will be big examinations as to why the exit polls were so wrong. These drive markets strongly and the risk-averse gambler needs to treat them with caution.

Mike Smithson