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There are two types of strategy to look at here.

1) Long term market - From the morning of the race to the actual race.

2) Short term market - Starting 10-15 mins before the race.

Long term market Strategy

There are many factors which will affect the odds of different horses in a race. Some horses will shorten by several points, some will drift by 1-5 points.

If you can spot a steamer in a market, you can back it at a high price in the morning and then lay it off just before the race, for a nice risk free bet.

One thing I have noticed that there are certain types of races that always have short priced favorites, and many times these are the ones that shorten in price.

Races to look for:

Flat Races:

Maiden Races
Stakes Races - Listed and Group
Conditions Races

National Hunt Races:

Novice Races
Graded Races

In many of these races, the money always centers around one of two hot horses.

Have a look at the market early on in the day, between 10am - 11am to see where the money is. If you can see a horse that has shortened in price and most of the money has been placed on him then, more than likely he will continue to shorten.

If there has been a substantial amout of rain overnight, this will have affected the ground and the going will have changed dramatically, meaning any horses with form on soft ground will shorten in price and horses with only form on good ground will drift.

The horse may have a bad draw. If you have a look at the Racing-Post website, you will be able to see if there is any draw bias and if that horse doesn't have much of a chance.

The horse may have been off the track for a long period of time, although sometimes this can mean he has been in hard training and needed the break to come back fresh and win.

One major factor is the effect of tipsters on the Internet. If a horse is being layed to lose by many tipsters and not many are backing it, the price will surely drift, and the same the other way around. Some horse are put up by pricewise tipping service to win. They have such a following that when their information comes out in the morning, everyone jumps on and backs the horse, thus collapsing the price.

Tip - Have a look on the betfair forum, sometimes you will see the pricewise selection. I usually back it and then lay it off later on in the day if other factors are indicating the price is going to shorten.