Hi Max, This is part of my attempt at describing trading from another thread here. By the way I use free software called The Geeks Toy to do my trading:

Trading is simply backing a horse at one price and then laying it at a lower price (or vice versa).

If you make a good trade with even amounts for the back and lay side you will then have a free bet on that particular horse meaning if the horse wins you win that amount but if the horse losers, you lose nothing.

Example:
Lets say the odds for Horse X are $5.1 and 5.0 meaning you can back it at $5 and lay it at $5.1.
You place a $100 BACK bet at $5.1 and hopefully get matched. (You will now win $410 if the horse wins [$5.1-1] but lose $100 if it losers).
You then place a $100 LAY bet at $5.0 and hopefully get matched.
You will now win $100 if the horse losers but lose $400 if the horse wins ($5.0-1).

With the above scenario you now have a $10 "free" bet on horse X. You will win $10 if the horse wins and lose nothing if the horse losers.

You then hedge the $10 free bet (done by the software) by then placing a lay bet (I think) on that horse using the $10 that you have made and dividing it into the price of the horse at the time (this is just one click on the software). So, if the horses odds are $5 you will hedge the bet so that $2 is won no matter if that horse wins OR losers ($10 / $5 = $2). That's a guaranteed return in that race and is called GREENING UP where the $2 figure is against every horse in the race and is in green. Repeat this during the race day and you can make some money. Repeat that again during the same race and you would then be dividing $20 into $5 odds giving you $4 for the race and so on.

If you like a particular horse to win then don't hedge and you have a free bet but with me, I have no idea who might win so I hedge every race. It can soon build up. The only problem at the moment is that the liquidity is still not great on the Aussie racing particularly after the 2nd or 3rd favorite.

I hope people understand that. If anyone wants to try, please be careful. Trading is not for everyone and I would start with the minimum $5 bet just to get the hang of it. The best thing about trading is the challenge while the worst is sitting in front of the computer all day and also being stubborn thinking the price will come back to where you think it should be. Get out ASAP if the price is heading in the wrong direction and RED-UP. There will always be another race come along as long as you have some money in your account.