Tuesday, 19 June 2018

Probability, Difference And The EPL Draw (2)

"You can scream from the roof top what the secret sauce is and it doesn't matter because people won't do it"
Although it isn't actually my "All-Time" most popular post, blogger's algorithm for such things tells me that my January piece on the draw has certainly attracted some interest.
In that post, I promised to update the English Premier League numbers in the summer, and with the NHL and NBA seasons now over, and serious sporting investment opportunities down to just the MLB for now, I was able to spend some time updating the EPL Draw numbers over the weekend.

We now have six full seasons with Pinnacle's closing price data, a total of 2280 matches.

If you're one of the few people who have not yet read the January post, it's worth reading, detailing my interest in the Draw as a bet going back to 1999, before playing with Elo ratings and accidentally stumbling across an edge which became the hugely successful XX Draws. 
Admittedly 201 isn't a huge sample, but the ROIs were decent enough.
Ultimately the key to their success was finding matches where, after accounting for home advantage and recent form, the teams were fairly evenly matched, an effort that problematically took several hours to calculate each week, hours that I no longer had given that my new position required regular travel. 

One adapts however, and I mentioned in the January post the idea of calculating the difference between the teams by simply using the odds (Pinnacle's Closing Prices), and using that as your selection criteria.

For example, in matches where the teams win probabilities are close, i.e. the difference is less than 25%, backing the Draw is +78.91 points from 393 matches which is an ROI of 20.1%. Not far short of the XX Draws except that it's a return made with a fraction of the effort. Note that I remove Pinncle's over-round to come up with the 'true' probabilities for each outcome.

If we use the raw difference as our guide, i.e. subtract one probability from the other, we can pivot around the zero for a 126.74 profit from 907 selections, an ROI of 14%

Let's take a look at when NOT to back the Draw. Backing the Draw in every EPL game over the last six seasons would have lost you 61.17 points. It's the second worst 'blind' strategy behind backing the Away team, and probably no surprise that after six seasons, the only 'blind' strategy in profit is Laying the Away team, for a profit of 0.6 points and an ROI of 0.026%.  

Backing the Draw when the Home team has an implied probability greater then 0.5 (2.0) would have lost you 81.57 points, while backing the Draw when the implied probability is greater than 0.27 would have lost you 121.80 points.

Eliminating just one of these categories and you have a profitable strategy which takes just a few minutes a week to apply. Set up a spreadsheet with some filters and see the ROIs in the high teens / low twenties: 
These numbers are for illustrative purposes only

The bottom line here is that you really need to make some poor choices to come up with a losing strategy for backing the draw in the EPL. The problem for most people is that it's not the most exciting way to make money, and as soon as an inevitable losing run comes along, they quit.  

I've also previously mentioned Big 6 and Little 14 matches. Overall backing the Draw in Big 6 matches for the past six seasons would have made 14.74 points (ROI 8.2%) while in Little 14 matches the profit is 17.01 points (ROI 1.6%). Exclude Manchester teams from the Big 6 and the profit is 25.41 points, ROI 35%

Worth noting here that the Big 6 matches are currently on a record 10 game losing streak dating back to 4 February, beating the previous record of 8 matches from 31 January to 26 April 2015, while Little 14 selections have lost eight straight. 

In Big 6 matches where the percentage difference is less than 25%, the ROI is 60%, while in Little 14 matches it is 14.7%.  
“Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats.” - Howard Aiken

Sunday, 17 June 2018

Tesla

One of the more interesting blogs listed on my blogroll is Wayward Lad's Pension Builder. His horse racing blog has been running since 2010, and his Pension Builder since 2013, which makes them two of the longer running blogs out there. 

The raison d'ĂȘtre for the Pension Builder idea is summarised as:

Having given up on the professionals, this is my own actively managed UK private pension (SIPP). I have a target for annual growth of 15% which - should I achieve it - will give me a Pension fund value of over £500,000 when I reach my 65th birthday.
To date, Wayward's decision is paying off. He has a target of 15% a year, i.e. 1.17% per month, which is certainly on the high side, but as of today he is ahead of schedule. 

Readers will know that my approach is to avoid higher cost actively managed funds and invest mostly in low cost index funds. 

However I do own some individual stocks, the most recent portfolio addition being that of Tesla last November. 

The trigger was seeing articles about the company being the most shorted stock in the USA. Shorting stocks is a risky business, and the more I read, the more it seemed that there are several misconceptions about the company. I also happen to like CEO Elon Musk's sarcastic, flippant, sometimes rude, approach to those trying to spread a false narrative about him or his company.
Also potentially unsettling investors: Shortly before commenting on the Model Y, Musk flippantly dismissed a pair of analyst questions -- one related to capital needs, and one related to the percentage of Model 3 reservation holders who buy the vehicle once they're able to.
I also liked that "around three-quarters of Tesla’s stock is held by major institutional investors — companies who have built their empires based on choosing good stocks. Furthermore, institutional investors have recently been increasing their stakes in the company". 

These investors usually (not always) know what they're doing.
To cut a long story short, I invested.
It's not been the prettiest of rides, especially in early April, but the stock is up 46.44% from that low, and the last couple of weeks have seen the red turn to green with some breathing room, and I think there is plenty more upside.

Here's a good description about short selling and how a short squeeze works. 
Tesla is the most shorted stock in the United States — 10.7 billion dollars bet against it.
What does this mean? In short selling, you pay a stockholder interest to “borrow” their shares, which you promptly sell, with an obligation to buy them back for the stockholder later. Because these stockholders would not have otherwise sold their stock, it injects new stock into the market, which depresses the stock value. Inversely, when shorts cover their position by buying the stock back later, this creates extra buying that otherwise wouldn’t have happened, elevating the price.
Short selling is always dangerous, but it’s unusually dangerous when a large portion of the stock is in short positions. The downside to a short position is technically unlimited; if you shorted a stock at $1 a share and it rose to $1 million a share, your losses would be a million times your investment. To prevent shorts from getting into a situation that they can’t get out of, short positions come with contractual obligations to cover their shorts (aka, buy back the stock) if the stock price rises too much. However, as shorts buy back stock, this raises the price of the stock, which can trigger other shorts to be forced to cover. This self-perpetuating cycle is known as a short squeeze. The more of a company’s stock is shorted, the more of a risk there is for a short squeeze, and the more the price will spike during it; in a Tesla short squeeze, the shorts would have to buy nearly a quarter of all of the stock in the market in a relatively short period of time. But most entities holding Tesla’s stock are long-term investors, and correspondingly don’t want to sell. This puts even more upward pressure on the stock.
Tesla has gone through several short squeezes before (due to the large number of people who either don’t believe in EVs, don’t believe in automotive upstarts, or just simply don’t like Musk). But never on this scale. To reiterate, if Tesla’s stock rises too much, people with 10.7 billion dollars bet against Tesla stand to utterly lose their shirt.
I'm letting this one run.  

Specificity and Equity

For at least three and a half years now, I've cautioned that in-play betting is unlikely to be a long-term profitable exercise for the majority of home traders, and the esteemed expert Joseph Buchdahl had this to say on the subject recently:

Supporting another opinion of mine, that one needs to specialise in markets less followed, Joseph had this to say:
When I came of betting age, options for betting were very much limited. 

As an outsider to the sport, I long ago learned from an insider that the idea of winning long-term at horse racing, whether flat of jumps, was impossible, and decided greyhounds was likely to be similarly fixable and thus also to be avoided. 

Which pretty much left football, although back in the early 90s, there was nowhere near the level of interest in the game that there is now. As I wrote here in 2009:
Back in 1991-92, I used a pencil, a pocket calculator, reams of paper, hours of time and Elo ratings on British football to make a nice profit. Ladbrokes ultimately closed my credit account, which I was quite proud of at the time
It does surprise me that football almost totally dominates discussions on betting these days. Simple logic should suggest that the chances of one person being consistently better than 'the vast majority of others' are remote. 

There are lots of sports out there, with plenty of data, but heretofore apparently without the same amount of serious interest. If anyone might have taken an interest, it would of course be Joseph, but a recent Tweet supports my opinion:
Those who have read about my interest in the underdog in a few sports will perhaps know why, but my point here is that the competition you are up against in football means that it is one of the toughest sports at which to be long-term profitable.

Some of you might have noticed that while researching this post, I found Joseph's Tweets to be a rich vein of nuggets. On June 5th, he asked:
I liked the one reply to this:
Joseph didn't respond unfortunately, but apparently there are still people out there believing the unbelievable. "Idiots" might be a little harsh, but clearly these people aren't critical thinkers, logical in approach, or understand basic probability. 

The 60% / 2.8 reference was of course to Mel whose pablum has recently drawn some attention. When asked for his thoughts on my posts pointing out several inconsistencies in his claims received this reply:
So much for civil discourse. Blocked for asking a few questions? How convenient, but I can't say I'm hugely surprised by this tactic:
Also worth noting that a volatile temperament is not one well suited to the world of in-play trading.

As with most charlatans, Mel has his ill-informed followers, seemingly in thrall at the idea that someone can consistently hit 2.8 winners significantly more frequently than 35.7% of the time. I would be too, but remember the old adage - "If it seems too good to be true, it probably is".

To hopefully make it clear, although I suspect many people believe what they want to believe despite the evidence, full Kelly suggests that 37.8% of your bank would be optimal for an edge of the size Mel claims. 

Even if the win rate were 'only' 50%, the bet size would still be a huge 22.2%. 

At a pathetic 45% strike rate the optimal bet is still a large 14.4%, and at a feeble 40%, a not insignificant 6.7%.

It's only at 38.3% that we get around 4%, with half-Kelly making this the 2% that is generally accepted as a realistic stake. 

My final comment is to highlight Mel's curious use of the word 'equity', rather than 'bank'. This rang a bell with one reader, who pointed me to this well known 'equity curve simulator' product:
I'm sure it's just a coincidence, but as I am in the dark now, I shall have to rely on others to let me know of Mel's progress, unless I have another Twitter account of course... 

As Carl Sagan said, "extraordinary claims require extraordinary evidence". Winning close to 60% of the time at 2.8 is an extraordinary claim, while this is not extraordinary evidence:
 

Monday, 11 June 2018

Hoops, Skates and Rounders

A few weeks ago, I posted a riveting review of the NBA Regular Season from an investment perspective, and now the play-offs are complete with the Golden State Warriors sweeping the Cleveland Cavaliers, winning back-to-back championships in the process. 

In my equally riveting post looking ahead at the Play-Offs, I had this to say back in April:

Hopefully some of you followed my advice, as road favourites had a 12-7 winning record, although none were as short as -6.5 so the second line of the above table remains unchanged. 
Another 4.42 points in the bank and the winning percentage climbs to 58.7% after six seasons.

The NHL's Stanley Cup has also wrapped up, with first time winners the Washington Capitals defeating the Vegas Golden Knights, who were playing in their inaugural season, in five games.

Here, the strategy was again to back road favourites, but with the qualifier suggested in this post, and for the fourth season in five since the shut-out, a decent profit (3.84 points) was made.
Sample size is small, so the ROIs can be ignored as meaningless, even if they are approaching those of Scientia Trading.

And now the focus is on baseball for the summer, although there is a football tournament going on in Russia I've heard. For investing, I'll stick to baseball, but I might watch an England game or two since there is no Italy this year.

Four winners from five T-Bone selections so far this month, including two yesterday, and a 9-3 record for the hotties which cool down after the All-Star Break, so make hay while we have a Premium Hand as Mel might say. Although that makes no sense at all for sports investing.   

Wisdom of Mel

Unfortunately I'm not sure I'll ever be able to watch Mel's webinars, but I did take some time to read back though Mel's @scientiatrader tweets, with comments added as we go. Tweet typo's :) have not been corrected.:

June 5: -£125.96 loss today....Could feel the market was trending against me today so decided to bail out and take a small loss for today.


Markets don't conspire to trend against anyone. Does anyone ever make the claim that markets are conspiring favourably for them?

June 5; £484.78 profit for today. A late one as stayed up to trade the paraguayan division 1 match.

Denzillion's Iceland Division 2 joke wasn't a joke.

June 1: £322.38 profit..Great to be back in action sooner than anticipated so will be trading over weekend as well to start generating momentum for the new week approaching.

Momentum doesn't carry over from one independent event to the next independent event. 

Mar 30: there is nothing more frustrating than not trading and seeing opportunities go by...painful....

Except when the day starts with three losses...

May 26: Just checked matchbook and similar to Betdaq in that their game coverage is limited. For instance today the whole of the Thailand League is playing and not 1 of the games were covered by Matchbook..all covered by 365 and all but 2 covered by betfair...so 365 is my backup for now.

Benet - Mel BET365 limit your stake if you win in the long term.

Mel - Yes I would assume so but to be truthful I only use them once or twice every 2-4 weeks..and remember my win rate on a trade by trade basis is around 53% so will see.

Where did that 60% strike rate come from? Thailand League? And yes, consistently (50% to 60%) winning on 2.8 shots will soon see an account restricted or closed. 

does anyone know what are the recommended trading tools that now are fully integrated with matchbook?

Bertje - Maybe a stupid question, but what are the benefits of a trading tool?

Not a stupid question at all. I'm not seeing anything that requires anything more than a press of Enter.

May 22: -£5.00 loss...virtually breakeven day.....Tough battle but glad to escape unscathed as at one point it could have been worst.....

Terms such as 'battle' and 'fighting' aren't helpful. You're gambling, and on some pretty strange leagues it has to be said, and sometimes your gambles will win, other times they will lose. It's called probability.

May 20: wanted to trade Viborg vs braband..price too high.. instead of adjusting my position size i hesitated goal scored 86..fed up

Price too high? Hesitation? This isn't sounding like a very scientific approach.

May 15: i was just asked how long this project will continue and its likely to end by the end of july as that is sufficient time for the project..after that there will be no need for further posting of daily results.

Get those cheque books ready on August 1st. Just in time for the new domestic season. 

May 13: Trading smaller to take on more games does seem to be alot more work but thankful for another good day.

Action in fourteen markets on this day. So the quit after three losses is a new idea, and not a very good one.


May 7: -£330 Loss...How can I mistake Midtjylland for Malmo when placing my 3rd trade..school boy error cost me and I hit my daily max loss when I could have broken even with a 86th min goal in midtjylland game. feeling like crap right now .cold shower and early night...onto tomorrow.

Back to school for some science lessons. This is not scientific. 

May 6: Crazy day with price shooting all over the place so had to re-adjust some of my trades...Glad to come out unscathed..But missed banIK hradec cze D2 because betfair didnt have it..topping up 365 account as starting to see alot more on 365 which not on betfair.

Why are we needing to top up an account? 

May 2: £248.81 profit for today. Managed to recover from a poor start. Longing for some premium hand starts but just have to take whatever the market offers for now. Looking forward to releasing my first webinar this friday. Its going to be quite an eye opener.

There's no Premium Hand in football betting. It's a term from poker that has no meaning or relevance when betting on individual events / matches. As for the webinar, I found it more of an eye closer.

April 28: Someone sent me a direct message asking why I don't trade on and on..The reason I don't do this is I don't have the liberty of sitting at my computer trading for the whole day. If I lived on my own then maybe but with my lifestyle I need a strategy that works with my schedule. Ta

Doesn't make sense. If time is the issue, there would be no need for a maximum of four. Gambling would be constrained by time. Some days your window might have no matches, other days it might have 14 (or more). 

£4.96. Break even day today. The way I trade within 3-4 trades I know if the market is on side and if not will finish day with small loss or break even. I completely believe in the cyclical nature of the distribution of wins and losses and am patient to wait for premium hands.

Repeating myself, but markets don't take sides. As for believing in the cyclical nature of the distribution of wins and losses, I'm struggling to square that with:
You can only learn if you embrace the good the bad and the ugly of how trading results are distributed because for years I tried to fight probability and this hindered my progress. It was only by accepting uncertainty that I found peace with my trading.
Understanding probability and variance is the key, and again, Premium Hands don't exist in this context. 

April 21: the randomness of late goals is just bizarre..of the 5, bundesliga division 1, games today, 4 of them had goals after 88 minutes....there is simply no way any strategy would have predicted that....

Exactly. So why claim to have a 'scientific' strategy that overcomes the randomness? 

Apr 19: -£125 loss for today. Some resistance to breaking the 5K barrier. Happy to lose the battle today as the casualty is minimized


There is no 5k barrier or resistance. These are terms taken from financial markets where a price or an index is at a certain level, and traders are reacting to it. Unless there's a derivative market where the underlying security is Mel's Betting Bank, I'm afraid this is complete and absolute bollocks. 

Apr 17: £121 profit for today. Will take this as it wasnt the greatest day for late goals for my targets. Hoping to see a reversal with the market tomorrow.

Hope isn't going to cut it. It is not a SINGLE market. It is multiple INDEPENDENT markets. 

Apr 15: -£144.27 loss for today. It would have to be a loss considering i slightly raised my positon sizing due to the growth in equity.

The definition of 'equity' is "the value of the shares issued by a company". What shares are we talking about here? Why not just say you're raising your stake in line with a growing bank? 

Apr 13: I could sense that today was possibly going to be a big day.

No comment, but it sounds very scientific.

Emotion is still there because I am human...Only Artificial intelligence or high trading frequency systems have the ability to trade with no emotion. The key is managing your emotions hence I decided not to take any more trades that evening because I was mentally done.

Later...

I was fast approaching my daily maximum loss and so took a 5:1 risk to reward ratio on my final trade of the day and it saved the day. Felt good after what happened with the Real vs Juventus where I curled up into bed and cried myself to sleep.

Yep, there's that 'trading with no emotion'. 

Apr 9: Scientific way behind how I trade which eliminates the wild variance seen in other punter/gambling mindset approaches. Trading trumps gambling.


Apr 7: Heart was in my mouth because the exchange was all over the place with 2 suspensions in the 91st minute before goal came.

Hang on a minute. Didn't we hear that Mel gets tired from watching a match while "trying to develop a justification to place a bet?" Apparently the games aren't always even watched, so that's more bollocks. 

At this point I was almost back to the start. There was more talk of markets being cyclical, and inappropriate use of 'equity' from which we can deduce Mel isn't experienced in the world of finance, and the claim that of 2076 matches studied "this year, 40% had 1 or more goals after 80min".

40% would mean that the price after 80 minutes on the Over x goals market would be about 2.5. Where the 60% strike rate came from I've no idea. Where the 2.8 price came from I've no idea. Wishful thinking? Or some data mining 'revealed' an edge in Paraguay and Thailand? 

In summary, and to put it politely, this so-called project is a lot of nonsense. 

It is not scientific in any way. 

There's a complete failure to understand that markets are independent, that markets don't have mood swings and neither do they conspire against anyone. 

There's confusion over variance and how it presents itself. 

Equity is not the same as cash. Mel's bank reaching 5k is just an arbitrary figure. There's no market barrier or resistance. Suggesting other-worldly forces are conspiring is just nonsense.

There are other inconsistencies. First games are watched, and then they are not watched - just the Betfair screen is watched.    

And sports investing is not a battle or a war. It's about finding an edge long-term over other players in each market. If there are goals after 80 minutes in 40% of matches, others will know this. If Paraguay and Thailand have a 60% strike rate, it's unlikely the market which will also know this, will price the probability at 37.5% (2.8). 

A fancy website and painfully loooong webinars might look good to the uneducated reader, possibly with a generous offer in August to invest in this project and share the riches, but just a cursory glance behind the curtain reveals several red flags that this is not all it seems.

The edge claimed is simply unbelievable, and were it anywhere like that claimed, Mel should be applying fractional Kelly to it, making as much money as possible from it while it lasts, and not giving his edge away.

Sunday, 10 June 2018

Leveraging Changing Probability

My recent post on Scientia Trading garnered some attention and debate, which is always a good thing.

I mentioned in the last post my issue with stopping after four bets in any one day and thanks to Matthew, who pinpointed for me where I might find Mel's thoughts on this, I was able to hear them without having to sit through almost 8 and a half hours of fluff.

I did start to watch Episode One, but gave up after ten minutes. It wasn't the most motivating of talks. 

Apparently the thinking behind the four bets limit is to avoid burnout, with six spells in a day of watching twenty minutes of a football match too much for him. 

Mel speaks of this 20 minutes as being in a 'high stress situation'. Our ideas on what life events can be considered 'high stress' appear to differ. If I'm stressing over a bet, it's because my stake is too high. Reduce the stake size! Save stressing for the things in life that are actually important. 

Mel's struggles in this area certainly boost my argument that outright punts are the way to go. If two hours of 'work' a day is too much, I hope Mel never gets a job with some real responsibility. Not that he'll ever need a job with a huge edge like this. 

In an attempt to justify this nonsensical four matches a day limit, Mel says:
"When I'm trading, I can't just go out there on a daily basis trying to trade as many times as I can thinking that probability will help me through. Rather, I need to leverage probability as a window of opportunity in which to extract the profits that I want because I know that probability can change and what used to happen in the past was that I would get myself into a situation where I was up, had some profit for the day, and I would just trade and trade and trade because I'm thinking to myself well if I can trade 20 to 30 times a day, look at the profit potential and then what would happen? I would be up £300 or £400, I would be back down to zero and then £300, £400 down in the red and then I would continue to trade because now I'm trying to get myself back to break even and before you know it I'm mentally fatigued and I end up with a loss for the day or break even or just a small profit, and I remember thinking to myself "I can't consistently trade this way on a day by day basis" 'cos of the fact that if I was living on my own, then maybe but I need a much more precise way to trade."
Where do I begin?  First of all, it doesn't appear that Mel is actually trading - rather, he is watching a match "trying to develop a justification" (his words) to place a bet (not a trade, since I haven't seen or heard any mention of exiting the open position). 

"Trying to develop a justification" sounds about as un-scientifica as you can get. Guessworkentia Betting would be a more appropriate name for this endeavour. 

Of course probability changes. The probability of a goal after 83 minutes is one thing. The probability of a goal after say 86 minutes is another. 

What "leveraging probability as a window of opportunity in which to extract profits" means is anyone's guess. Sounds like meaningless mumbo-jumbo nonsense to me.

What Mel seems to be missing is that if he seriously thinks he can hit winners at 2.8 50%-60% of the time, he is sitting on an absolute goldmine, although yesterday he did admit that this is now closer to 50%. It would not be a huge surprise if this ultimately drops to approximately 35.714285%. 

With an edge that huge, (a win rate of 50% to 60% at 2.8) full Kelly suggests staking 36.6% of the bank, and anyone who has been betting for any length of time will tell you that it is palpable nonsense.

Denzillion @bettingMayhem tweeted that:
I haven't seen any reference to 'investors' myself, but presumably these are people contributing to his starting bank rather than subscribers to any service he might be offering.

I'm not sure how an in-play service could work for this situation in any case. This would also beg the question, why would Mel need investors with such a huge edge? Why would you not start with a £100 bank and build it up for yourself, beholden to no one and perhaps reducing the stress he feels. 

Another error Mel made in the few minutes I listened to the webinar was when he was talking about having a "Premium Hand" which is a poker term and totally irrelevant for a discussion about betting on football.  

Mel plays some audio from a trader who basically talks about the importance of maximising your profits when you are trading well, "letting winners run", but this is in the context of trading in one specific market. 

Mel tries to justify quitting after three losses in terms of "it's not my day", or "the market Gods are against me", completely missing the point that each match is an individual event, and that his huge edge applies to each match, regardless of previous and unrelated results. 

If you've found a casino that pays 50-1 on any individual number, would you arbitrarily limit the number of spins you play based on whether the first three spins are winners or not? Of course not. If you have a positive expectancy, you maximize the number of events in which you are active.

How results are distributed should have no bearing on your betting. In fact, in Mel's intro, he writes:
You can only learn if you embrace the good the bad and the ugly of how trading results are distributed because for years I tried to fight probability and this hindered my progress. It was only by accepting uncertainty that I found peace with my trading.
Mel has much to learn, including from himself. You can't "fight" probability. Markets aren't conspiring against you. 

Phil @workingawayphil, who seems a pretty sharp chap, had a few comments on the likelihood of someone consistently being able to find such huge edges in football markets. Denzillion wrote:
From what I can gather he is assessing multiple pre match stats and in play indicators so has taken a view that from minute X, the win rate is X% hence any price X and over is value.
and Phil replied that:
He also clarified with:
Phil added:
I collected data from thousands of games, goal times, odds, shot locations penalty/ free kick etc. Seen so many people on twitter talk about edges but every time I’ve looked into them in real detail I’ve either found them to be wrong or a tiny sample size.
The problem with a fundamentally flawed approach of using pre-match stats, 'goal times' etc. is that not only are all matches independent events, but that as previously mentioned, far better resourced enterprises have already crunched this data and more, and extracted any value out of the market. One example:
Star Lizard Consulting, which was set up by Mr. Bloom’s associates to provide support for his betting syndicate, operates like a quantitative hedge fund. About 200 employees — traders, software engineers and analysts — focus on helping Mr. Bloom’s syndicate make data-driven bets on soccer and other sports.
The gambler in his one bedroom flat has little to no chance of beating this kind of opposition long-term.  

Denzillion suggested that maybe:
I dunno, does Tony [Bloom] care what Mel does in his bedroom in Iceland Division 2 with 30 spectators. Are you being too cynical here? Time will tell if his win rate stands up.   
Possibly not, but the problem here would be that liquidity is correspondingly low and when you back at 2.8 in an illiquid market, the true odds are probably 3.0 or greater. If the market is liquid, then no doubt Mr. Bloom would be very interested. 

If Mel has truly found a system that generates winners at even 40% of the time at his 2.8 target, then he has an impressive edge and really shouldn't be telling everyone about it. If anyone knows more about the 'investors' angle or where it is mentioned, please let me know. 

Friday, 8 June 2018

Nonsense Scientia

Via Full Time Betting Blog on my blogroll, I was led to Scientia Trading and Mel, who also posts on Twitter as @scientiatrader

The post is titled "Food for thought", which had me salivating, but not for long. Readers are warned that Mel has produced four webinars to date, although cautions us that:

What I will say is the videos are loooooong! And I mean long.(2 hours anyone?) Mel does go on a little bit sometimes (sorry!) but I assure you its well worth staying with them as there are some utterly fascinating pieces of information in there.
At the time of writing I have yet to get more than three minutes into them. Something for the weekend perhaps. The About Scientia Trading page contains lots of mumbo-jumbo phrases, for example:
When I made a decision to fully understand and internalize the trading fundamentals of some of the worlds most successful traders it was one of the most difficult and challenging journeys I have ever faced.
Given that Mel appears to be closer to starting out in adult life than some of us, that might not be quite as dramatic a statement as it initially sounds.

He writes that he is now having consistent results with a strategy:
...with a 50-60% win rate and one in which the average risk to reward ratio is 1:1.8 (1.8R).
The strategy appears to be betting on a goal late in a game, but there's a small problem with that sentence.

This risk to reward ratio implies an average price of 2.8, i.e. a win probability of 35.7% for his bets, so anyone achieving a 50-60% win rate at that price would clearly, and rapidly, be on the way to a fortune and keeping very quiet about it.

The trouble is, it's not that easy. You can't have a 50-60% win rate at around 2.8. 

Ignoring over-rounds and commission, bets at 2.8 will win 35.7% of the time, winning 1.8 units each time, and losing 1 unit 64.3% of the time. Net gain zero units. It's how probability works.

If Mel wants a 50-60% win rate, he'll need to be betting at prices between 1.667 to 2.0, well short of the 2.8 he talks about in the second half of his throwaway sentence. 

This ignores commission of course, which is not an insignificant cost when trading on Betfair. 

So the strategy of betting on a late goal in a game can only be profitable long-term if you are able to judge the probability better than the market, i.e. other individuals. I very much doubt that any one individual can do this consistently. If they can, they should probably offer their services to the football industry. 

Prices at any particular time in a game generally reflect the true probabilities. If the market does have a weakness at 80 minutes plus for some strange reason, it will soon correct, especially if people are shouting about it! 

Recording winners twice in your records might help the spreadsheet, but the bank won't benefit:
The other thing that jumped out at me from a cursory read is the idea of having a maximum of four selections per day. As readers of this blog will know, I'm of the opinion that value is hard to find, and that it doesn't come along x number of bets per time period. You may have no bets, you may have many bets. It makes absolutely no sense to ignore a value bet simply because you've already found a certain number that hour, day, week, month, whatever. If Mel has this huge edge, it would be folly to shutdown for the day at four selections. 

When I posed this question on Twitter, I was referred to Webinar 2, which, as my old friend Matthew Trenhaile put it:
I'll enlighten you all later if I get there.  

Completely unrelated, but the Betfair Forum isn't known for its sharp minds. In a thread titled "Does a football betting system that works exist?", we have this genius posting:
On what planet would a system generating ROI of 20% be 'not worth the time and effort'? 

A later post reveals that this return is from the grand total of 106 bets, so not yet anything to get excited about, and the fact that the 'inventor extraordinaire' is happy to give his system away means he knows it's rubbish.  Either that, or he is even more crazy than I first thought. 

Saturday, 2 June 2018

MLB - May, Lines and Bones

Only a small profit last month for hotties, but the streak of profitably for the opening two months of the season continued stretching back to 2014.

I mentioned in April that in the early part of the season:
13 of the Wins have been by one run, which explains why the Run Line P/L is currently negative, and 31 games (67.4%) have been Unders.
The final total for one-run wins by a shorty in April ended up being 18 (from 67 selections) and as a result, the profit / loss differential between Money Line (ML) and Run Line (RL) was the highest ever for a single month, with the RL trailing the ML by 21.9 points beating another April's (2012) difference of 13.27 points by some margin.

The total one-run wins in May was a more typical 7 (from 61 selections), and five of those were in the first eight days of May. Trilla B's research apparently suggested the Run Line was more profitable, but I'm not seeing this. 

Since 2012, when the shorties strategy became favourable, the ML has beaten the RL five seasons out of six, and including this season has a record of 167.14 points versus 92.95 points (although the Run Line's ROI of 5.7% is better than Money Line's 5.1%, calculated using the US method of betting to win 100 units). 

It is true that in the five negative seasons prior to 2012 (I only have access to data going back to 2007 for the Run Line), losses would have been less on the Run Line, but hopefully most readers are reading this blog with a view to maximising their profits rather than minimising their losses. 

Speaking of profits, I mentioned as recently as last month that in my opinion "your interest [in sports investment] should probably not primarily be quaestuary" and courtesy of @SJosephBurns comes this gem of a quote along the same lines:
In other words, a non-quaestuary quest. Try saying that after a few beers.

I digress. The trend towards Unders in these matches that I mentioned in April also continued in May. A 76-56-3 record to date is an ROI of over 12%. Caution is advised though, as this is the first season Unders is ahead in these games since 2013. The number of close games early on this season is obviously a big factor. The fewer runs a game is decided by, the more likely the Unders is. For the shorties this season, 72 matches were decided by three of fewer runs, and 52 of these ended as Unders.

The T-Bone System actually lost 0.12 points from its 27 selections in May, although the Run Line option was up 4.35 points. After 51 selections this season, the Money Line is up 6.08 points (ROI of 7%), while the Run Line is up 8.65 points (ROI 12.3%).

Wednesday, 30 May 2018

Ice Road Warriors

I mentioned in my previous post that the NBA Finals are about to begin, and the NHL's Stanley Cup Finals are also in progress having begun on Monday. The Vegas Golden Knights in their inaugural season are playing the Washington Capitals and lead the final series 1-0. 

For betting, the NHL is another sport where it's worth looking at the road teams when favoured.

 
The 2012 season was shortened due to a lockout, but for the five full seasons since, the records for road (away) favourites in the regular season is decent as shown above, although 2017 showed a loss for this basic strategy.

However, with many bettors subject to overreacting to the latest results, a.k.a. recency - and of course it is ultimately other bettors you are competing against and not the bookmaker - as with the NBA, it pays to look at road teams coming off a loss but who are nevertheless still favoured against a team which won its previous game:
The all important ROI more than doubles, and when including the playoffs, almost triples. It's probably not a coincidence that the NBA and NHL schedules are similar in their scheduling of road trips and back-to-back games, and thus we see similar weaknesses in the markets for these two sports.  
Baseball's T-Bone System also benefits from this extra qualifying parameter.

For the 2009 season to date, the basic T-Bone has an ROI of 4.2% from 1064 bets, while the enhanced system is at 5.2% from just 894 bets.