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Finding Value When Betting |
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| If you are a casual
gambler who just likes a punt on the Grand National, Derby and the General
election, you can think of yourself as the shopper who goes to a music store
occasionally and buys something with a good looking cover. Its pure luck if the
tracks on the CD turn out to be to your liking, in fact they are most likely
going to be so-so. There is nothing wrong with this because there is fun to be
had with the unknown, as there is with your casual bets. So long as you don't
risk too much money. |
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If however you are a
more discerning music lover you will follow the scene and download particular
tracks or albums, or film lover who makes a point to see the latest Cohen
brothers movie. Sometimes you will be disappointed but you know you have made a
good bet with your money. This is the same with betting on anything and its the
principle behind good betting and separates the long term winners from the
losers.
What is meant by "value" is placing a bet at higher odds than
the "true odds". The true odds represent the real expectation of a particular
outcome in anything. For instance a perfectly balanced coin toss is Evens for
either heads or tails. If someone offers you 11/10 heads then you are getting a
value bet though this does not mean you are going to win unless you are allowed
many bets and then the force of those generous odds will bring you a
profit.
How to Find Value
First of all
you need to be signed up to the Best Betting Websites. This will
give you accounts with many bookmakers and exchanges so that you have the
option to bet at the highest price available.
Second you need to be well
studied in a particular sport or sports. Its important to realise you don't
need to know everything about a sport, just those parts that allow you to
formulate a way to accurately price individual outcomes. E.g. the odds for a
particular golfer to win a tournament or heads-up match against another golfer
or the result of a football match.
Third, whenever you are placing
money on anything you take any extras that are going.
Let’s look at
an easy straightforward example by looking at this weekend’s match between
Chelsea and Manu Utd. Four matches this season and the last six from last
season.
Chelsea so far Home : W3 L1 and last season W1 D4 L1
Manu Utd so
far Away : W2 D1 L1 and last season W2 L4
Combining results at Home 4
(Chelsea W) + 5 (Man Utd L) = 9
Combining Draw 4 (D) + 1 (D) =
5
Combining results Away 2 (Chelsea L) + 4 (Man Utd W) = 6
This
gives;
Home win 9/20 = 45% - Decimal Odds 100/45 = 2.22
Draw 5/20 = 25%
- Decimal Odds 100/25 = 4
Away Win 6/20 = 30% - Decimal Odds = 100/30 =
3.33
Best Odds available at time of writing are Chelsea 2.2 Draw 3.6 and
Man Utd 3.6
So the value from are simple calculations is with Man Utd
win. 3.6 represents 27.8% but we think its 30% and so have a 2.2/27.8% edge
which is 8%. This is not much and so we may look to do the same with other
matches but the principle of looking for value has been executed and there are
few bets in football that will be 8% or above and so if we believe our method,
which is up to your knowledge and judgement then we will have a bet on
this.
Staking Plan
Once you have found
value it is important to know how much to bet. Much is talked about the
Kelly
criterion which is an advanced way of looking to determine the optimal size
of a series of bets. This is quite aggressive and I adopt a variation of the
Kelly criterion which is easier to calculate and safer. Broken down into a
simple idea it equates to %chance of the result multiplied by %advantage you
think you have multiplied by your bankroll.
So in the above example if
we choose to bet Away Win and our bankroll is £1000 then the equation
is;
£1000 x 30% x 8% = £24.
This looks a small amount but
ideally we can use this method through all fixtures and arrive at many bets.
Infact an effect of placing many bets is to reduce the volatility and gives the
opportunity to bet in total more than the total bankroll. This sounds odd but
the bankroll is a nominal figure that is not all of our money and if we had 50
of these bets at any one time it would exceed the bankroll but statistically no
chance (very very small) of losing them all.
Whilst this staking plan is
safer it is important to understand that even if our "Value" bets are true
value, i.e. you have a real advantage, it does not mean we are destined to win.
You can still have volatile swings against you and you can lose your bankroll.
Which is why your bankroll is separate from the rest of your life and an amount
you can lose unless you intend to be a professional gambler.
Results
checking and volatility
All sports can analysed for result
prediction. You can make it as complicated as you like but you must be
comparing real results with your expectations to check you are on the right
path. If not you must adjust and one of the possible adjustments is that your
model is wrong and you have to stop and maybe re-analyse and start over or
simply give up.
Volatility is always a problem for a value bettor.
Winning on any particular bet does not justify the bet but winning over a large
number of bets will tend to support your method of analysis. Likewise losing a
bet does not mean the bet was a poor one, but losing over a number of bets
needs to get your attention. If you are right in your thinking but you are
experiencing a negative fluctuation this is the hardest thing to deal with.
Thats why adherring to strict bankroll management is crucial.
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