Do I have a genuine edge or is this just statistical variance?

[ShaunWhite]

Like Joseph Buchdahl writes in the article:
"Unsurprisingly, the longer the odds the greater the variance or spread in outcomes. Of course, for these expected break-even scenarios the variance (or square of the standard deviation) is directly proportional to the odds minus 1.

Betting at longer odds will mean you have a greater chance of doing a lot better than expected just because of good luck (the distribution tails are fatter at higher yields). Of course, the reverse, is unfortunately also true since the distributions are symmetrical."

Who needs this Joseph Buchdahl geezer, he seems surplus to requirements while we have pythonic, LinusP around (to name but a few)

It's funny how once you have a 'name' you can get plaudits (and paid!) for writing articles stating the bleedin' obvious. That's not a dig at you for reproducing it, far from it, i'm sure there's lots who hadn't twigged what that abstract explains or gone the extra step and figured out the maths, or just needed a big name to confirm what's already been said on this thread.

But he really is just saying that for a given return, your income stream will be more predictable if you sell beans than it would be if you sell boats. At least he shows the reader some respect by starting sentances with 1 x "Unsuprisingly" and 2 x "Of course" which makes a nice change.

[LinusP]

Like Joseph Buchdahl writes in the article:
"Unsurprisingly, the longer the odds the greater the variance or spread in outcomes. Of course, for these expected break-even scenarios the variance (or square of the standard deviation) is directly proportional to the odds minus 1.

Betting at longer odds will mean you have a greater chance of doing a lot better than expected just because of good luck (the distribution tails are fatter at higher yields). Of course, the reverse, is unfortunately also true since the distributions are symmetrical."

Who needs this Joseph Buchdahl geezer, he seems surplus to requirements while we have pythonic, LinusP around (to name but a few)

It's funny how once you have a 'name' you can get plaudits (and paid!) for writing articles stating the bleedin' obvious. That's not a dig at you for reproducing it, far from it, i'm sure there's lots who hadn't twigged what that abstract explains or gone the extra step and figured out the maths, or just needed a big name to confirm what's already been said on this thread.

But he really is just saying that for a given return, your income stream will be more predictable if you sell beans than it would be if you sell boats. At least he shows the reader some respect by starting sentances with 1 x "Unsuprisingly" and 2 x "Of course" which makes a nice change.

Have you read his book? Its hard to recommend due to the underlying feeling that he believes making money from gambling is impossible and anyone who says they are is a lier but then thats why he is probably writing rather than betting..

[ShaunWhite]

Have you read his book? Its hard to recommend due to the underlying feeling that he believes making money from gambling is impossible and anyone who says they are is a lier but then thats why he is probably writing rather than betting..

I haven't, but those unused audible credits keep stacking up so i might.
But it's hard to believe that any educated person can't understand the concept of value when they make a bet, so maybe I won't

[Speculator_3]

Thanks for all your replies.

spreadbetting - it seems to me that my edge, if it does exist, comes from that in certain matches (usually occuring in small less known leagues), the given odds are consistently not indicative of the true chances of the event happening. As I wrote in my first post, I have bet across all sorts of leagues, and it seems to me (I don't have a large enough sample) that some value comes from me placing these bets in these obscure leagues, where the total matched volume is quite small. This naturally brings up the point you made - can this strategy be scaled up to yield very large profits.

It’s all about the odds.

https://www.pinnacle.com/en/betting-art ... 6ux3b552bg

https://www.pinnacle.com/en/betting-art ... f7s22scgmz

If you are laying high or backing low then you need a lot more matches to confirm it is profitable, what are your average odds?

LinusP: the average implied probability from the odds that betfair gives me at the time I enter the market is around 12%. The spread is very large, though. Over my 1800 bets, the lowest probability I took was around 1%, and the highest was around 75%.

Given the average taken odds imply that the chances are around 12%, how many matches would I need to confirm my strategy is profitable?

[ShaunWhite]

Given the average taken odds imply that the chances are around 12%, how many matches would I need to confirm my strategy is profitable?

Sample sizes may be chosen in several ways:

1. Using experience – small samples, though sometimes unavoidable, can result in wide confidence intervals and risk of errors in statistical hypothesis testing.

2. Using a target variance for an estimate to be derived from the sample eventually obtained, i.e. if a high precision is required (narrow confidence interval) this translates to a low target variance of the estimator.

3. Using a target for the power of a statistical test to be applied once the sample is collected.

4. Using a confidence level, i.e. the larger the required confidence level, the larger the sample size (given a constant precision requirement).

You won't be suprised to know that I didn't know that by heart, I grabbed that from the Wiki page on sample size determination but I've never been able to understand it fully. We seem suprisingly short of mathematicians on here who can put it into a formula with just the parameters necessary for what we do. 100s of years of experience kicking around on here and nobody knows any semi-serious maths, it's strange. Either that or they're not the sort who help much.

Being constructive though I think a good place to start is 100 of the least likely outcome...ish?
200 @ 50%
400 @ 25%
800 @ 12% etc

But there's clearly a lot more to it than that. "As soon as the charts look reasonable" is my other goto on sample size and I suspect that goes under #1 above.

[ShaunWhite]

The subject was also touched upon here ..viewtopic.php?f=2&t=18478&hilit=steyx&start=10#p182933

It didn't get far but I did post a crude spreadsheet with an example of how to use the excel trend analysis functions. Correlation to trend seems to be a reasonable measure of how close your trend is to the underlying results. It was just something I only played around with so its not really in any shape for public consumption. Might help, might not.

[pythonic]

About Joseph Buchdahl, I have read his older book and most of his articles and while he himself obviously has no edge apart from writing and providing information and is generally very sceptical about profitable betting, I found that what he writes about risk management and statistics is always pretty solid.

LinusP: the average implied probability from the odds that betfair gives me at the time I enter the market is around 12%. The spread is very large, though. Over my 1800 bets, the lowest probability I took was around 1%, and the highest was around 75%.

Given the average taken odds imply that the chances are around 12%, how many matches would I need to confirm my strategy is profitable?

With 12% I get a standard deviation for yield (edge) of about 6.4% which means that you have a 66% chance that your true yield is equal to your observed yield +- 6.4% and a 95% chance that your true yield is equal to your observed yield +- 12.8%.
If you have a lot of very high and/or very low odds in your sample then this could be somewhat different but mostly this approximation is pretty robust.

You could try to exclude the higher odds for a lower variance but be careful about data mining odds ranges.
Generally data mining is always a problem with data samples from the past and it's difficult to eliminate that completely.

Otherwise I would suggest to try the strategy live with small stakes first and slowly scale it up when it looks like your profit estimations were correct.

[Speculator_3]

Given the average taken odds imply that the chances are around 12%, how many matches would I need to confirm my strategy is profitable?

Sample sizes may be chosen in several ways:

1. Using experience – small samples, though sometimes unavoidable, can result in wide confidence intervals and risk of errors in statistical hypothesis testing.

2. Using a target variance for an estimate to be derived from the sample eventually obtained, i.e. if a high precision is required (narrow confidence interval) this translates to a low target variance of the estimator.

3. Using a target for the power of a statistical test to be applied once the sample is collected.

4. Using a confidence level, i.e. the larger the required confidence level, the larger the sample size (given a constant precision requirement).

You won't be suprised to know that I didn't know that by heart, I grabbed that from the Wiki page on sample size determination but I've never been able to understand it fully. We seem suprisingly short of mathematicians on here who can put it into a formula with just the parameters necessary for what we do. 100s of years of experience kicking around on here and nobody knows any semi-serious maths, it's strange. Either that or they're not the sort who help much.

Being constructive though I think a good place to start is 100 of the least likely outcome...ish?
200 @ 50%
400 @ 25%
800 @ 12% etc

But there's clearly a lot more to it than that. "As soon as the charts look reasonable" is my other goto on sample size and I suspect that goes under #1 above.

It's funny that you say the forum is short of mathematicians, because I am one! (Got my PhD in the subject). However, my PhD was in pure maths, completely unrelated to statistics; in fact throughout my education, I never had interest in the subject and lacked formal exposure to the concepts you mention (confidence intervals, for example). I am just learning about these topics now.

One really needs a statistics / data science background for such questions. It's entirely possible that quite a few people, who have studied a degree in mathematics, would have no clue about hypothesis testing, confidence intervals, and so on.

[pythonic]

It's funny that you say the forum is short of mathematicians, because I am one!

Same here

[ShaunWhite]

It's funny that you say the forum is short of mathematicians, because I am one!

Same here

ooooo now that is interesting I might need to quiz you about some basic notation at some point. My maths only goes as far as when I fell asleep doing differentiation of integrals about 35 years ago.

[pythonic]

Feel free, Shaun!

[ShaunWhite]

Feel free, Shaun!

I'll tuck that away like a Get Out of Jail Free card and perhaps use it sometime. Thanks.

[Euler]

It's actually quite nice to have some deeper discussion on the forum. If you feel we need to create a new area for it, let me know.

[Euler]

Have you read his book? Its hard to recommend due to the underlying feeling that he believes making money from gambling is impossible and anyone who says they are is a liar but then thats why he is probably writing rather than betting..

He has written some good stuff but I think he falls into an intelligence trap where you convince yourself that because you can't do it, nobody can. I've had many meetings or 'discussions' like that in 20 years. But that in itself tells you where an edge is in the market. About three years or so ago somebody really went at me with a similar argument so I invited him to the office, but he seemed to think I was going to beat him up or something so wouldn't come. All I was going to do was show him a couple of things that would have made him think again.

The upshot, I'll give a lot of credit and respect to those that use their intelligence to solve a problem rather than argue a point.

[gazuty]

The upshot, I'll give a lot of credit and respect to those that use their intelligence to solve a problem rather than argue a point.

+1