Today we have a guest post from Darren Power of Betting Insiders…
All About The Money
I've got an idea that may be controversial or it may be a breakthrough that will help you cope with losing spells with your betting.
As I see it, the biggest problem that we have with making money from betting is coping with losing spells.
And knowing whether the bets you are making are good bets even if you aren't winning.
What I want to suggest is that you don't look to your profit and loss line to decide whether you are doing well.
But instead look at whether you are beating the market and judge your success that way.
I'm sure you have read more than once the assertion that the Betfair market is a true representation of the chances of the horses in a race.
And that the closer to the off we are, the more accurate those prices reflect the chances.
This is the Efficient Market Hypothesis.
So it follows that Betfair SP must reflect the true chance of each horse in a race.
Of course there will always be exceptions to this like the Barney Curley gambles last month.
And I guess scientists would call these outliers, but we need to deal with the mainstream. not these outliers.
So, if we take it as fact that the Betfair SP is the most accurate representation of the horses chance of winning. Then it follows that if you regularly beat Betfair SP then you will profit over the long term.
To beat Betfair SP you will need to bet earlier in the day. So what I'm proposing is mainly aimed at people who bet at bookies early prices.
What I'm suggesting is that if your bets fit the early price criteria that you measure by how much you've beaten Betfair SP and judge your performance on that achievement rather than on what is in bank account.
So let's look at an example to see how we might calculate this.
Lets say that we make a bet in the morning at 10/1 (11.0) and that the horse in question returns a Betfair SP of 7.6 then we have beaten the market and win a lose we made a good bet.
To calculate the advantage we want to know the difference between the implied probability of the price taken and the Betfair SP.
To get the implied probability just divide the price into 100.
So 10/1 = 11.0 which is a probability of 100/11 = 9.09%
7.6 is a probability of 100/7.6 = 13.15%
So our advantage is 13.15 – 9.09 = 4.06%
The chart below shows the profit compared to the price advantage from the Value Backing tipping service over the last 8 weeks.
The reason I looked at Value Backing is because it is a big price targeting service, which means long losing runs, which in turn means any snapshot of results will likely show it to be either very poor or very good depending on whether there have been recent winners.
What you can see from the chart is that the advantage over Betfair SP (blue line) has been pretty consistent, averaging an advantage of just over 1% per bet.
The green line shows the profit over the same period which heads in the same direction and ends up at 23.5 points profit at 1 point level stakes.
This example turned out to be a straightforward comparision, my next step is to try the same analysis on a more volatile set of results.
If you have comments on any of this please leave them below and I'll check back to answer them.
Today's Selection courtesy of Mathematician Betting
Wolverhampton 4.40 Ocean Legend – win bet – 9/4 Bet Victor