Saturday, 8 January 2011

Bank Edging Up

The latest post from The Expat Punter is titled Finding An Edge, and he writes:

The edge is that thing that you must possess that gives you an advantage over your fellow bettors in your chosen betting medium, be it football, horses, tennis or whatever. This is the thing that you absolutely must have if you are to survive over the longer term as a bettor.
So far so good. If you're backing coin tosses at evens, you have no edge - commission will erode your bank away. To make it worthwhile, you need an edge. He continues:
Personally I don’t think I have one but then again maybe I do but don’t realise it.
The answer is that if you are profitable long-term, then you have an edge, whether you are aware of it or not. If you are not profitable long-term, then you do not have an edge.
I know a couple of really good staking systems (for laying) that can be applied to pretty much any market – maybe they are an edge of sorts.
No - the stake cannot create an edge. Either a bet is value or it is not. The stake size has no effect on this. And laying is no different to backing.
I read a lot about people moaning over their failure to capitalise on a particular event (a goal scored or whatever) because they were waiting for a price and the event occurred before their price was reached. This ties in with another biggie subject and that is the contention that you must always seek value if you are to succeed. So while you are sitting waiting for your ‘value’ price to appear a goal gets scored and you miss out. Or better yet you get your value price and the horse falls at the first fence. My take on value is that if you are happy with a price, regardless of whether it is truely a value price, then step in. I would say that the vast majority of punters, and I count myself here, could not price a market to save their lives so any thoughts of finding value goes straight out the window.
No one serious about making money can be happy with a price that isn't value. If your 'value' price is accurate, and one would hope that it is otherwise you'll be easy prey for those on the exchanges who know the true price, then why would you accept anything less? Never 'step in' unless a price is value. Well, not if you want to be a winner. My wife is from California where there are a number of casinos which are allowed to advertise on TV and radio. When a casino advertises that they have the 'loosest slots', they're not offering you value - they are saying that long-term, for every dollar you give us, we'll give you 90 cents back. If that's your attitude to betting, i.e. entertainment only, then don't wait for the value price, just take any price, and have fun.
Anyway, back to the subject. So, if the markets are so efficient that it’s impossible to gain an edge mathematically how else do we do it?
There is no other way - you find value or forget about betting as a money-making venture.
The form books are there for all to read, the racing press is available in every corner newsagents in the land. That nails the door shut there – if I can spot an unusual trend that proves profitable over a long term then so can the next guy who reads the same paper. Edge gone. It’s all very baffling if you ask me. I think those who genuinely do have some sort of leg up on the rest of us are the truly dedicated sort who actually do the legwork and work their arses off to find those little clues that the majority of us are too lazy to uncover. Either that or they have horseshoes up their jacksies.
It's all very baffling to me why people in 2011 are still obsessed with horse-racing. Yes, 25 years ago, horses and dogs, the football pools, Miss World and the General Election was about it for choice, but not today. We are spoilt for choice these days, and why anyone would think they have a better chance of finding the winner in a midweek race at some small track with twenty horses entered than in a two-outcome event like tennis, ice-hockey, darts, snooker, football (some markets), basketball, or whatever your preference is, just isn't logical. To be profitable from horse-racing, you need to be in the know, and if you're not in the know, then the time spent looking at the form for 20+ runners could be much better spent looking at other sports. Yes, there is racing nearly every day, but so what? The great advantage we have is that we don't have to bet. We can wait for value.
I don’t usually proof read my stuff until it’s actually posted so the above might just be the biggest load of bollocks ever but it’s my load of bollocks and I offer it to you free of charge.
Yes, probably for the best, since I doubt that you'd be able to sell that advice!
Now, you might be thinking after having looked at my pathetic account balance that I know feck all so why listen to me but you’d be wrong. I know stuff, plenty of stuff, but right now I have to content myself with Mickey Mousery for a while until I can build a balance that I can actually do something with.
If it's taking too long to get the bank to build up, then perhaps you don't have that edge yet? If you have an edge, it doesn't take long to built up a bank plenty big enough for most purposes.
That’s another thing I see a lot – advice to the tune of ‘set aside some money and use it only for betting. Don’t use the betting bank for anything else’. That’s a great idea – build a massive betting bank and just have it sitting there growing bigger. Don’t bother to occasionally pay yourself some money to go and buy something – oh no, that would be sacrilege. Bollocks I say – make some money then pay yourself then make some more and repeat the process ad infinitum.
I think you've misunderstood somewhere along the line. The advice is not that you shouldn't ever pull money out and spend it on yourself, but that your betting bank should be initially seeded with money that you can afford to lose, and that you shouldn't be pulling funds out if you then need to put them back in later. Do you plant a seed and then keep digging it up every few days? Leave it alone! My initial deposit on Betfair was less than £100, (which evaporated to £21.40 at one time), and while I pull funds out to pay for things like weddings and vacations, I have never put more money back in. Indeed, had that initial deposit all been lost, I would have walked away from it all. I'd spent over a year trying different ideas, and if I hadn't found something that worked after that time, then it would probably have been smart to move on. If you have an edge, the bank will build itself, and if you don't have an edge, there are better ways to put your money to work. It is rather sad to read about people waiting for pay day before they can put their next deposit into their account, and then pulling funds out to pay for incidental expenses. Just leave the betting bank alone to build up and when it reaches the point where there is more than you need in there, withdraw some, and invest it elsewhere.

Anyway, I don't mean to pick on Mr Schofield. His blog is a lot more interesting than many out there, and I get the feeling that he published the above in something of a hurry.


mouldhouse said...

A few comments on the comments:

"The answer is that if you are profitable long-term, then you have an edge, whether you are aware of it or not. If you are not profitable long-term, then you do not have an edge."

Not necessarily a cause and effect thing. A small minority will have made money thanks to one decent score, with no edge whatsoever. Usually a multiple bet of course. Think "lottery ticket".

"No one serious about making money can be happy with a price that isn't value."

Again, not 100% accurate. Some of the biggest winning traders I know are constantly happy taking prices that are not value, because they know the markets they operate in, and know they will be able to sell those bets back at even worse value and lock in a green screen. I'm sure you must do this as well sometimes. I'm sure lots of winners have laid 1.0x for "insurance", knowing they are giving money away and that at the price they are giving away value, but happy to lock in a large gain on the event.

"If your 'value' price is accurate, and one would hope that it is otherwise you'll be easy prey for those on the exchanges who know the true price, then why would you accept anything less?"

Bit pedantic but who are these people who KNOW the true price? They don't. They might have a very good model, which makes money over time, but suggesting at any point that they know the true price is simply incorrect. A good model can make you confident, but being overconfident is always a huge error.

"It is rather sad to read about people waiting for pay day before they can put their next deposit into their account, and then pulling funds out to pay for incidental expenses."

Yes, it is, but without those guys, you won't be winning on betfair. Without people like that in the long run you wouldn't be winning anywhere with people like that, because the sharks would eat each other on the exchanges, and the bookies wouldn't be profitable enough. Its one of those things about being a +EV player - its a nice feeling, but you are never going to be Robin Hood. Via the conduit of the middleman, be it betfair or the bookmaker, sadly you feed on the shortcomings and lack of ability of the rest of the pool. Doesn't stop me sleeping at night to be honest.

swearbox said...

Hi Cassini,

You're spot on there when you say that you got the feeling it was published in a hurry. It was, kinda. To be honest I wanted to post something that wasn't just a few lines of text followed by a P&L and recent BF forum posts steered me towards that subject. Though it may seem like it my post wasn't designed to be an exercise in fishing but I'll bet there's plenty who have read it will think to the contrary.

There are many folk out there who are quick to proffer their advice to the newbies (like obtain value, staking plans etc) but I wonder just how many practice what they preach on a daily basis. I was discussing your post with a friend over breakfast and wondering how to respond without coming across as a total know nothing (since I've read and re-read my original post and I now realise I could have maybe written it a little differently).

I'm not advocating that you should dive into a market regardless of the price, far from it, but I do think that the whole concept of 'value' is basically subjective. One man's meat is another man's poison. You can still be a loser overall by obtaining (your own perceived) value IF your particular selection method sucks. Just because your selection wins doesn't mean that it was a value price. For me value has no bearing on the outcome whatsoever, all it does is maximise your actual betting bank balance IF your selection method does not suck.

The crux of all of this though lies in the attitude of the individual and what his reasons for betting are. The way I see it is that a very small percentage of people do this for a living - there's no such thing as a 'fun' bet for those people. The rest are made up of complete mugs, thrill bettors, hobbyists, wannabe pros, etc etc. For the majority it doesn't really matter if they are really obtaining value from one bet to the next as they aren't thinking in terms of being in it for the long haul as undoubtedly the professional punters do.

It was refreshing to read that you think that one can actually have an edge without being aware of what exactly it is. I think too many people think they possess this edge factor when in fact they don't. I personally don't claim to have anything Holy Grailish up my sleeve though there's days when I wish I did. One thing I have taken away with me from your post is that I can certainly do better that I currently am. If you started with a hundred quid and now pay PC then IT CAN BE DONE :-)

I think one of the biggest factors affecting our individual circumstances, good or bad, is basically down to that other giant in the world of betting advice - discipline. Without a disciplined approach to all this there's no amount of value, edges, or the like in the world that will keep us from drowning. I'd like to thank you for picking on me (kidding) as you've given me some food for thought. Best wishes and good luck.