In exchange betting, also known as peer-to-peer betting, individuals can place bets against one another rather than against a bookmaker. When it comes to developing a winning formula for exchange betting, there are several fundamental principles and strategies to consider:

1. Value Betting: Like traditional sports betting, finding value in the odds is crucial in exchange betting. Look for situations where the odds offered by the exchange are higher than the probability of the outcome occurring. This involves researching, analyzing statistics, and understanding the sports or events you are betting on.

2. Lay Betting: One unique aspect of exchange betting is the ability to lay bets, which means betting on something not to happen. This opens up a new dimension of possibilities and can be used strategically to hedge or lock in profits.

3. Understanding Market Dynamics: Exchange betting markets are dynamic and can fluctuate based on the actions of other bettors. Reading and interpreting market movements can provide valuable insights into where the value lies.

4. Bankroll Management: Proper bankroll management is essential in any form of betting, including exchange betting. This involves only risking a small percentage of your total bankroll on each bet to withstand losing streaks and ensure long-term sustainability.

5. Risk Management: Assessing and managing risk is crucial in exchange betting. This includes diversifying your bets, avoiding chasing losses, and staying disciplined with your betting strategy.

Computation of potential winnings in exchange betting involves understanding how odds and stakes interact. 

the basic formula for calculating potential profits can be expressed as follows:

Potential Profit = (Stake x Back Odds) – Stake – Commission

– Stake: The amount of money you are betting.

– Back Odds: The decimal odds at which you back (bet for) an outcome.

– Commission: The commission charged by the exchange on winning bets. This varies between different exchange platforms.

In this formula, you first calculate the total return from a winning bet (Stake x Back Odds). From this, you subtract the original stake to determine the Profit before accounting for the exchange commission. Finally, you deduct the commission to earn the net Profit from the winning bet.

It’s important to note that each exchange may have its own rules and fee structure, so it’s essential to familiarize yourself with the terms and conditions of the exchange you are using to calculate potential profits accurately.