Red Devils

Some people really shouldn't have betting accounts. The Betfair Forum had this question on it today

What's the difference between "Half Time/Full Time" and "Win Both Halves" -if Team 1 wins half time and full time, then they have also won both halves, eh?

With a joining date of 22.Jan.11, he does have the excuse of being a new kid in town, but really. Sharp minds indeed.

With the abandonment of Bologna v AS Roma, I had just two strong draws this weekend, with both ending up as home wins. One weak draw winner from four, so nothing to shout about unlike Peter Nordsted and his Drawmaster system which produced two winners from two League One selections.

The best pick of the weekend was probably Lorient, who as I mentioned, I had priced at 1.57. When I backed them on Friday morning, the price was 2.06, but following my post, or perhaps it was Football Elite's selection of them, they came in to around 1.9. Still value, and they duly won 2-0. Real Sociedad also won 2-0, but I lost half my stake as Lille could only beat Lens by one goal, and Lecce cost me all of my stake as they finished 1-1 with Cesena (to a 93' goal...ouch).

In an effort to reduce the Premium Charge this week, I also had a couple of FA Cup trading dabbles - on Manchester United to beat Southampton which was a nerve-wracking time but came out OK in the end, and on Fulham v Tottenham Hotspur, which didn't.

I backed both winners in the Australian Open Singles events, and had one of my best cricket wins in the Pakistan v New Zealand ODI. Once I know that I am (almost) definitely going to pay the PC for the week, I become a little more relaxed about my betting. Certainly not reckless, (I'm not as stupid as I look, something that was a great relief to my Mother), but there's a certain devil-may-care attitude to the bets which stops at midnight on a Sunday. The PC really should be a little more of a 'rolling' charge.

As a Surrey boy, it's a little galling to see two Sussex teams into the FA Cup Fifth Round, and the Red Devils of Crawley Town now face a trip to the other Red Devils in Manchester - the biggest game in their history (Crawley Town's history that is, lest there be any doubt).

Some early NBA games today with the Los Angeles Lakers hosting the Boston Celtics in a rematch of last season's final. Both sides had awful performances on Friday, with the Lakers -13.5 favourites at home to the Sacramento Kings, not only failing to cover the spread, but losing the game SU. Regular readers of this blog will have made money on this result.

Drawmaster Picks 29.Jan.11

Below are Peter Nordsted's Drawmaster picks for today:

The match with the biggest draw bias is Rochdale v Charlton.

Rochdale's recent home record against teams of Charlton's grading is W1 D2 L0. Charlton's recent away record against teams of Rochdale's grading is W3 D4 L3.

This is the first time in recent years the two teams have met at Rochdale. Rochdale have drawn four of their last five home matches. Charlton have drawn three of their last five away matches.

Match Odds: Rochdale 2.50, Draw 3.25, Charlton 2.55

Tip: Rochdale v Charlton draw @ 3.25

The other draws I will be backing this weekend are Carlisle v Oldham (3.25) and Swindon v Exeter (3.25)

For what it's worth, I have Rochdale v Charlton Athletic as a weak draw, but the other two matches look like home wins to me - Carlisle especially.

Channel Crossing

No EPL games this weekend, with the FA Cup Fourth Round, but action in the other majors.

Strong draws? Only three - in Italy, Bologna v AS Roma and in France, Caen v Auxerre and Valenciennes v Olympique Lyon.

Weaker draws are Sochaux v Stades Rennes, Nurenburg v Hamburg, St Pauli v Koln and Deportivo La Coruna v Sevilla.

Home value: I have Real Sociedad (v Almeria) priced at 1.88 and available at 2.06. Almeria have won just three times all season, including a home win last week. Real Sociedad have won five of nine at home, and both games against lower placed teams.

Lorient (2.06) v Brest. I have Lorient as low as 1.57 for this one. Lorient have conceded just one goal in the last five home games, and Brest are not in good form right now.

Lille are value to beat Lens and the -1/-1.5 Asian Handicap (2.0) in my opinion. My ratings have them to win by 2 goals, and priced at 1.28 SU.

Finally, Lecce (2.2) v Cesena. Lecce are in fine form right now, with a win at Lazio, a draw at Fiorentina, and a home draw with AC Milan. Not too shabby. I think 2.2 is a good price.

For an away value pick, I'm going for Paris St Germain at a very poor Arles-Avignon who have won just once all season. They did scrape a 1-1 draw with Lyon back in October, but in all other home games against top half of the table teams, they were beaten. 1.58 may not look a great price, but it's value in my opinion.

Who Moved My Port?

The best-seller "Who Moved My Cheese?" by Spencer Johnson is, in summary, a parable about a mouse who is let out from 'home', into an area with three tubes. He wanders down the first tube to find it empty, retreats, tries tube number two, and finds some cheese there. He returns home, and the next day the process is repeated. He tries tube number one, finds nothing, tries tube number two, finds his cheese, and returns home happy. After a few days, the mouse learns that he's wasting his time wandering down tube number one, so he skips it, goes straight to tube number two, gets his cheese and life his good.

One day, he strolls as nonchalantly as a mouse can stroll, down tube number two only to find that there is no cheese there. The bastard scientists conducting the experiment had moved it to tube number three. What did the mouse do?

Anyone guessing that he retraced his steps and tried tube number one or tube number three would be mistaken. The mouse stayed where he was, and had he been allowed to, would have starved to death there. An example, of course, of how because something has always previously worked, there's no guarantee that it will continue to do so.

The only constant is change.

There is also the issue of the mouse never venturing beyond tube number two, even though tube number three may well have offered Stilton and a glass of port. And who knows what might have been in tube number one at any time?

So how many gamblers develop a system, and either stick with it for too long after it has stopped putting food on the table, or alternatively find something that works, yet never try other markets that may well offer even greater riches?

As in the experiment, circumstances on the exchanges change. The bastard scientists in our world are the Premium Charge inventors, or the cross-matching implementers, or other gamblers who like cheese as much as we do - even if it isn't always Stilton with a glass of port.

Finally, one of those strange coincidences that happen from time to time happened to me yesterday. I am reading another book at the behest of my boss, and there in a chapter titled "Do Less or Work Faster" (I went for the former option) is another piece about Signor Paret - in bocca al lupo.

Cassini Principle

I am currently reading "Stumbling On Wins", by David J Berri and Martin B Schmidt, a Xmas gift from my daughter, and came across a reference to the Pareto Principle, also known as the 80-20 rule, the law of the vital few, and the principle of factor sparsity, (which sounds more like a medical condition) which states that, for many events, roughly 80% of the effects come from 20% of the causes. The original observation was in connection with income and wealth. Italian economist Vilfredo Pareto noticed that 80% of Italy's land was owned by 20% of the population. He then carried out surveys on a variety of other countries and found to his surprise that a similar distribution applied. (He also observed that 20% of the pea pods in his garden contained 80% of the peas - some people really should get out more).

Anyway, my initial thought on reading this was the possibility that a similar ratio applied to my returns from trading, i.e do 80% of my profits come from 20% of the time that I spend trading. Now that my daily trading records go back a full five years, over 1,850 days, (Vilfredo isn't the only one who should get out more), this should be fairly easy to measure.

The 80-20 rule doesn't handle negatives too well, and unfortunately my daily totals do occasionally include a red number. Nevertheless, I ran the numbers and found that just my best 112 days comprised 80% of my profits from five years of trading. If only I knew in advance when those 112 days would be!

It's certainly a fact that my profits are not evenly distributed across all months as I have noted before, and taking a complete break during the six months of April through September would have the effect of reducing my profits by just 22%. I make 78% between October and March. Not quite the 80-20 rule, but I'm proposing a new rule for traders which proposes that 80% of profits are made in half of the year. It's called the Cassini Principle. Cassini / Pareto - we're both of Italian heritage, we both like our numbers, and we both have principles, but the similarity ends there. I shall not be counting peas in my garden. OK, so we should both get out more, and I may well do that in April, which has a record of three losing months (out of five) and an overall loss. Trouble is, the competitive nature in me means I'm more determined than ever to turn April around this year.

Any traders out there who can run their numbers and see if the Cassini Principle holds true?

Sophomore Blues

I know I shouldn't complain, but another sizeable sum will be taken from my account in the next few hours. After a good week, my total charges are down to 19.66%, and the Premium Charge continues. While I am OK with playing with up to £100 on the more speculative punts made more to reduce the PC than with any expectation that they are anything much above borderline value, I am just not comfortable throwing much more out there, but I probably need to, or at least find more markets to do this in. The credit I receive for winning / losing in these markets is a drop in the ocean when I have a decent four figure win. The other annoying thing is that in a losing week, a PC reduction strategy is quite likely to simply increase the loss, and you don't know if your week is a winning one until Sunday night. Make a big profit on the NFL that is settled at 11:59pm, and that doesn't leave a lot of time to minimise the damage. Make it on a Monday morning on the 12:30 at Newton Abbott, OK, so that'll never happen for me, but you get the point - it gives you a full six days to work your magic.

But complaining never did any good so I'll shut up. The Blackpool v Manchester United game went pretty much as expected, with plenty of goals and Blackpool losing. It seems like a lot of teams that are expected to go straight back down after a promotion do far better than expected in their first year, but then suffer from what the Americans call, a sophomore slump -

A sophomore slump or sophomore jinx refers to an instance in which a second, or sophomore, effort fails to live up to the standards of the first effort. It is commonly used to refer to the apathy of students (second year of college or university) the performance of athletes (second season of play), singers/bands (sophomore album), television shows (second seasons) and movies (sequels/prequels).

I think it's five teams who have been relegated from the Premier League in their second season - Middlesbrough, Bradford City, Ipswich Town, Reading and Hull City. I could be wrong, but I doubt it. With Blackpool looking to survive this season, next season could be a lot tougher. This is from the University of Surrey newspaper at the start of 2007-08:

Second Season Syndrome…

Since the Premiership began, teams that have won promotion and then achieved unexpected success in their first season in the Premiership have generally failed set the right goals and achieve the right balance the next season. There is a very difficult balance to find, and excluding Blackburn Rovers, a club seemingly big enough, or just managed well enough to cope with all the pressures of returning to top flight football, clubs generally are hit with the familiar sounding football term; ‘Second Season Syndrome’. Wigan and West Ham showed last season the difficulties of recapturing unexpected success, both dropped into a relegation fight after top half finishes the year before. In previous years, Nottingham Forest 1993/4, Charlton 1999/00, Ipswich 1999/00, Middlesbrough 1994/5 and Manchester City 2001/02 have all suffered at the hands of ‘second season syndrome’. Others have too, but those are the worst cases. Ipswich were relegated in the 1999/00 season having finished 5th the season before, they fell thirteen league places. Blackburn seem to be the masters of avoiding this, twice overhauling admirable first efforts. In fourteen seasons only four times has a promoted side improved on their first season in the Premiership. Twice this has been Blackburn, in 1991/92 4th - 2nd and 2000/01 10th - 6th (Derby and Birmingham have also achieved this feat). Combining those team’s that have lost ground, 72 league places have been dropped at an average of 4 places by every team in their second season. Hence if Reading were to drop this season - according to stats - it would only be to mid-low table obscurity, with the possibility of being dragged into a potentially open relegation battle. Will Steve Coppell and Reading be able to avoid the dangers of a hangover after last season and improve on things?

Not a bad write up. I looked for his piece the next season, but couldn't find it. Upon enquiring, it turned out that the writer had spent too much time betting and not enough on his studies, and was sent down during his second year. Oh the irony.

Super Bowl Set - Go Long

Things are looking up for the Stock Market this year. The famous Super Bowl Predictor maintains that if the team that wins the Super Bowl has its roots in the original National Football League, the market will increase. If the winning team was originally from the old American Football League, the market will decline.

This year there is no doubt about the outcome, and we should all load up on shares. The reason is that the two teams this year, as indeed was the case last year, both trace their roots to the original National Football league. The Green Bay Packers have won three times previously, with the Dow Jones Industrial Average rising an average of 14% in those years, while the years when the six-time champion Pittsburgh Steelers won have seen a rise of an average of 18.4% .

This indicator has correctly predicted the direction of the Dow in all but nine of the 44 years that this game has been played, which works out to a success rate of just under 80%.

While this idea may seem nonsense, there is one logical reason why it may hold true, which is mass psychology. If enough people believe the market is going in one direction or another, they will collectively turn this belief into a self-fulfilling prophecy.

Perhaps the fact that the US Stock Markets were up big on the first trading day after the Super Bowl teams were known, is a sign that traders think that this will be another up year for stocks.

That's Entertainment

After my post yesterday, Sir Alex Ferguson has asked me to publish the following write up on tonight's Blackpool v Manchester United game.

Blackpool have picked up fewer points at home than anyone else (but they have played 2 or 3 games less than anyone else) so they are well overdue a big win over a top team. Yeah, yeah, so Manchester United (of Manchester) are unbeaten, but away from home they have won just two of their ten games. I'm not saying that United definitely won't win, because on any day, or night, of course that is possible, and merely by writing this post, I have single-handedly doomed Blackpool to a 0-4 thrashing!

As entertaining for my readers as the 4-0 win for Chelsea was, I don't think too many people predicted such a convincing performance. One person went so far as to suggest the game was

Probably the hardest game of football to call ever in the history of the game.

I wouldn't go that far, but I'll certainly remember this game for a while.

Being serious about the Blackpool - United game, Over 2.5 goals looks value at 1.62. Blackpool at home are 100% on overs, with every team scoring, and while Manchester United's average away is a modest 1.4, when you extract the games at top six sides, the average goes up to a more reasonable 2 exactly. A United win by 2-1 (9.8) or 3-1 (13) doesn't look a bad bet according to my spreadsheet, but it's been known to be wrong before. In it's defence, it'll take a few weeks before the correct values are all there.

Craig, writer of Against All The Odds, is back, with a long re-opening post, and some kind words:

The third option would be to make this a poor version of Cassini’s blog – Green All Over – a blog that is without compare (Unless it’s actually a meerkat in disguise). This option appeals but I’m not sure I have the imagination or inspiration to find so many diverse topics to write about. Still, it is an option that intrigues me and ideas permitting, I will certainly be looking to make general comments about topical issues.

Thanks Craig.

Bolton Wanderers v Chelsea

I mentioned earlier that for me, I thought the value for tonight's Bolton Wanderers v Chelsea game lay in the unders. Clearly my pricing model underestimates the goal-scoring probability for Chelsea in this game, as I am over-weighting recent games and Chelsea haven't exactly been banging in the away goals of late. In fact since the opening two away games in September, Chelsea have exceeded one goal just once in nine matches, a 2-1 win at Blackburn back in October - almost three months ago. Since then, they have scored (oldest first) 0,0,1,1,1 and 0 so why does the market expect Chelsea to score two goals or more? (This has traded at between 1.72 and 1.77 on Betfair). It's not as if Bolton give up too many goals at home. For their last six home matches, 2,1,2,1,0 and 1. Bolton last lost at home in October, 0-1 to Liverpool. 64% of their home games do go over 2.5 goals, but then 64% of Chelsea's away gams go over. I'm not saying that Chelsea definitely won't score two goals or more, because on any day, or night, of course that is possible, and merely by writing this post, I have single-handedly doomed Bolton to a 0-4 thrashing!

Here's another view from BlueOrange

Chelsea's away form has been pretty poor over the last couple of months so god knows why they are the odds on favourite to win this match. Bolton aren't the best team at home with 5 draws but they have only lost once at home this season. My ratings say that the overs markets are where the value is. Recently all my bets have been on overs I put this down to the fixtures producing games with one team a clear form favourite and the other being out of form. Now I know Bolton haven't scored against Chelsea at home since 2002 but this has got to be their best chance yet. I have odds of 1.14 for over 1.5 goals and at the moment that is 1.33 on Betfair.

I don't put too much stock into the fact that Bolton haven't scored at home to Chelsea since 2002, but 1.14 (88%) on Over 1.5 goals looks far too short. I have this at 1.47 (68%), arguably far too long, but it's interesting how two people can have such a difference of opinion. I shall be watching this game with added interest tonight.

Rovers Return

Another profitable day yesterday, with Bayer Leverkusen (1.92) doing the business at Borussia Moenchengladbach by 3-1, and Blackburn Rovers beating West Bromwich Albion 2-0 at a very generous 2.48. A much needed morale booster for Football Elite on this game too. As I said in my initial write up, the odds here were quite bizarre to my mind. Less than a month after winning at WBA by 3-1 (arguably lucky given that Blackburn scored 3 goals from 6 shots, while West Brom had 21 shots, but a win nonetheless) and with a solid home record against lower rated teams, this was good value.

Chievo Verona failed to beat Genoa, and no joy for the strong draws with Udinese beating Internazionale 3-1 and Sporting de Gijon winning 1-0 over Atletico Madrid. The weaker draw selection of Bologna v Lazio finished 3-1.

Not much doing in the NFL games last night. Small profits in both games, but neither the Green Bay Packers nor the Pittsburgh Steelers looked like losing once they had taken 14 point leads, and they will meet in the Superbowl in two weeks.

Back to real football now, and my numbers for the Bolton Wanderers v Chelsea have goals less likely than the prices available would suggest - i.e value on unders. The big difference is in our estimations of how many goals Chelsea will score, presumably because I go back in time a lot less than conventional wisdom suggests I should, and Chelsea's recent games on the road haven't produced many goals. As Bill James discovered in baseball though, just because something has always been done a certain way, doesn't mean it should be done that way.

Unfortunately, by the time the latest features are fully included into the calculations, we will be getting close to 'silly season'. But there's always next season!

Poisson

This blog wields more power over the markets than I thought! The healthy 1.8 on Over 2.5 goals tipped up here yesterday morning for the Hamburg v Eintracht Frankfurt game soon disappeared, and traded as low as 1.67 pre-game. It could have been the millions from Asia moving the market, but I think it was my blog. 1.67 was borderline value, and while I am hesitant to say I traded out for a risk-free bet on Overs because you will all accuse me of after-timing, I did actually go for the risk-free bet. So no win, but no loss either.

I've been tinkering with the ratings spreadsheet again. Actually tinkering is something of an understatement, since I have now added a Poisson distribution calculation to the process. I now use the team ratings in my formula to calculate the probability of each team scoring against a specific opponent, so for example Fulham would be expected to score less versus Manchester United than they would versus Stockport County. My 'model' also weights the latest games more highly than the older ones. It's been many years since I sat in my Croydon classroom learning about the Poisson distribution. Anyway, still some tinkering to do in the area of low scores (0-0, 1-0, 0-1 and 1-1 where, I am informed, the independent Poisson model doesn't hold) but there is a wealth of information out on the web when I have time.

Not a bad day for my picks, with one of two strong draws a winner as Tottenham Hotspur drew at Newcastle United (3.6). Werder Bremen lost 0-3 at Koln, but the strike rate on these remains high and very profitable. I also managed to find a rare home value winner as Parma beat Catania 2-0 at 2.07.

Peter Nordsted's Drawmaster system was profitable again, with one from three, but for Football Elite, the dreadful run continues. Three Recommended Bets today, and not one winner with Wolves losing to Liverpool, Hannover '96 losing to Schalke '04 and Freiburg drawing with Nurnberg. The losing run now stands at eleven, with the last winner back on New Year's Day. My ratings didn't concur on any of today's games, so I was a spectator on these. A Short-List bet was Mainz '05 to beat Wolfsburg, but the streak that ended was Wolfsburg's seven consecutive draws as they beat Mainz '05 1-0.

I traded the Aston Villa v Manchester City game after backing the 0-0 on the Correct Score market at 13.0 and laying No Next Goal at 11.0 to reduce the PC next week. I could have done with a 0-0 result, but it all helps. I'm trying the same on the AS Roma v Cagliari game which is now in progress.

Drawmaster Picks 22.Jan.11

Peter Nordsted's Drawmaster selections for this week are below:

The match with the biggest draw bias is Wolves against Liverpool.

Record of teams of Wolves' grading against teams of Liverpool's grading reads W4 D5 L14. Wolves' recent home record against teams of Liverpool's grading is W2 D1 L5. Liverpool's recent away record against teams of Wolves' grading is W3 D3 L2.

Head to Head recent record at Wolves reads Wolves 0 Draw 1 Liverpool 0. Wolves have drawn none of their last five home matches. Liverpool have drawn one of their last five matches.

Match Odds: Wolves 3.20, Draw 3.20, Liverpool 2.10

Tip: Wolves v Liverpool draw @ 3.20

The other draws I will be backing this weekend are Newcastle v Spurs (3.20) and Fulham v Stoke (3.20)

Not a huge surprise that I have two of the three on my draw radar, but I have Fulham by 0.6 over Stoke City.

Wolfsburg DDDDDDD

A nice even 40 matches on the schedule this weekend in the 'Majors', where strong draw picks are hitting at a very impressive 36.46% for the season. On Saturday, Newcastle United v Tottenham Hotspur and Koln v Werder Bremen are the contenders, and on Sunday it's Udinese v Internazionale and Sporting de Gijon v Atletico Madrid.

The best of the weaker draws are Wolverhampton Wanderers v Liverpool and Bologna v Lazio.

I thought about including Wolfsburg, who have drawn their last seven league games, not surprisingly the longest in the league, but they are away to Mainz '05, who have gone 18 games without a draw - also the longest. One streak will end tomorrow, that's for sure.

The best away value is Bayer Leverkusen at Borussia Moenchengladbach. I have Leverkusen at 1.81, and they can be backed at 1.92.

And now to the home value picks, which have been something of a challenge in 2011. I have Parma value at 2.07 to beat Catania. The former have lost just once at home (v AC Milan) and Catania have yet to win away. I also have Chievo Verona (2.64) v Genoa and Blackburn Rovers (2.36) v West Bromwich Albion. Blackburn won at WBA less than a month ago, and they also have a decent home record against teams placed lower than them, winning 5 of 7 this season to date. Hoping for 6 from 9. 2.36 looks a decent price.

In tonight's Bundesliga game between Hamburg and Eintracht Frankfurt, the Over 2.5 goals looks value, at around 1.8.

Quitting Time

19.96% was the final Total Charges calculation after last week's trading, just shy of the magical 20%, so another hit from the Premium Charge. A pity that the technical problems on Betfair this afternoon didn't impact their ability to deduct the charge. Funny how that never seems to be a problem. I guess the outage was a big deal for many people, but there's not often anything of interest to me late on a weekday afternoon. Some people work, which leads me neatly into this piece that was stolen from the Betfair forum (some bloggers have no shame) by Mark Iverson.

Well, a recent post on the Betfair Forum gave examples of two typical Betfair users. It then posed the question as to which type would be most likely to give this lark a crack full-time due to their personal circumstances. The types were...

TYPE 1 - 21 Years old, just finished uni but can't get a job (except maybe in a call centre) as every other Tom, Dick & Harry also has a worthless degree these days, no dependents, living at home with mum & dad, not paying rent, laundry done, meals cooked, use of a car (free of charge), not even paying for the internet, gap in CV could be easily explained.

TYPE 2 - 42 years of age, married, 2 children that are approaching university age, mortgage still being paid, very securely employed with 15 years service, currently earning £60k + bonus + car, final salary pension scheme, etc. etc (you get the picture).

The author then goes onto say.....

TYPE 1 would probably be happy to give it a whirl with £500 but the other guy is going to earn over £1m in the next 18 years if he just sits it out until his pension kicks in. Possibly a slightly more difficult decision for him and a different safety net requirement.

I'm not so sure I agree with the conclusion. With little life experience I think I'd be more concerned that the 21 year old would waste his early twenties barking up the wrong tree only to find out too late that he hasn't got anything to go to if the playing field changed quickly. Surely, giving up a £60k job with all the perks is much riskier though? What about all that security? All good points but in my mind the author failed to include that the second guy probably works 60-70 hours per week, travels around the country/world, is bored stupid and never gets to see his kids grow up and spend quality time with his wife.

That's some sacrifice and as someone who's recently taken a sabbatical from the day job I'm happy to say that I feel more relaxed and content than ever. I'm still working hard but as it's on my terms I'm appreciating every day and noticing things that I never did whilst making the daily round trip from 7am to 7pm. I've also started noticing more life opportunities and from a gambling point of view started making many more 'better' decisions.

Surely this is what life's all about? Long may it last :-)

My comments on this are as follows. An unemployed 21 year old has nothing to lose by effectively taking a gap year or two, or more, to try his hand at trading. Many people do not find the job they want to do until their late twenties, (Type 2 in the example started at age 27) but I would say that ones twenties are the best age to be in a work environment from a social perspective. There was no option in my day, but work was more about meeting friends, learning new skills, getting used to the 'grown up' world, and learning than it was about slaving away.

Anyone on £60k, working 60-70 hours a week is most likely a pretty motivated individual, and probably not in the least bit bored. When you get bored, you move on. He may not spend much time with his wife and kids, but his income means that they can travel and spend quality time together enjoying the fruits of his labour when he does take a break. Quantity doesn't equal quality.

In the event that our Type 2 friend should get interested in trading, he would almost certainly dip his toes into the water and splash around a bit first to confirm that it's worth his time. Assuming he finds an edge, he would most likely decide to reduce his hours, or reschedule his hours, and work on trading in his spare time, thus preserving his secure job (not to be dismissed too readily after investing 15 years), the benefits that go with it, and at the same time making a decent second income.

No two people's situations are the same, but I doubt that you would find many 42 year olds on a £60k income, (who are not financially independent), and with family responsibilities, who would give all that up for trading - at least not before a lengthy trial period. In the short time that I have been trading, I have seen markets change. I can't think of many things worse than jacking in a secure job on the Friday, only to find that the markets have changed and your edge is gone. Explain that to the missus.

Saving 10% of your income each year, and assuming a modest 6% return, our 42 year old would amass savings of an additional £1/4 million pounds in the next twenty years. Topping that up with money from a second income would make far more sense than quitting and having to make £60k a year before you are at break-even. Yes, I know that taxes complicate things and right now there is no tax on exchange winnings, but that can easily change. Did any see the Premium Charge coming some four years ago? It might sound glamorous and exciting, but gambling is hard work, and stressful enough at the best of times. Needing to win to pay the bills would be too stressful for me. If you're 21 with no bills to pay, I guess it's not so bad. £60k is a lot!

Besides the steady income and benefits, work isn't all that bad anyway. (If it IS that bad, update your CV and move). Many companies now let you work from home and at hours that suit you. 9 to 5 is an antiquated idea in many jobs. Then there's the social life, and if you have a steady second income, you can approach work in a more confident and relaxed manner. Meetings are a lot less boring when you can sit there with your lap-top pondering betting ideas, and the Internet is a wonderful thing... Oh, and there's the free coffee and tea and Xmas parties!

Traffic Lights

Not content with stealing blogging ideas from the exchange forums, I have lowered myself even further by enhancing my ratings spreadsheet with a 'traffic light' feature that I saw on some obscure blog out there. I like the idea, because it shows at a glance whether teams are currently meeting expectations, or whether they are over or under performing. From a ratings perspective, I would like to see mostly yellow - as these are results that were close to expected. Over the last six games, Tottenham Hotspur are the consistent team in the EPL, with their last five games finishing as expected, whereas Arsenal and Stoke City are the unpredictables. Spurs are also the only team without a single red (under-performing) rating, while Chelsea, Manchester United and WBA are the only three who have failed to exceed expectations at least once.

In the Championship, my top rated team is currently Reading, although they are currently outside the play-off spots. Reading and Watford do not have a red between them, but Portsmouth, Coventry City and Preston North End do not have a green between them.

League One sees the only team with all green - rather surprisingly Notts County currently languishing in 16th place in the league but apparently destined to place higher. Peterborough United and Rochdale are the most consistent teams.

In League Two, strugglers Hereford United are the in-form team exceeding expectations in five, and meeting in one, of their last six matches. Gillingham and Crewe Alexandra are also red free, while Bury don't have a single green.

In the Conference, Eastbourne Borough and Rushden and Diamonds both lack a green, while Hayes and Yeading United don't have a red. I guess when expectations are low, it's easy to meet them. I must remember that for work.

Back to the top teams, and in Serie A Udinese are red free while Juventus and Catania have no green. In Spain, every team has under-performed at least once, with Real Madrid the only team that hasn't over-performed at least once. Sochaux are the most consistent team in France, performing as expected for the last five matches, and Wolfsburg are the same in Germany, although they and Stuttgart are the only two not to excel in six games.

How useful this new feature will be remains to be seen, (early thoughts are that it could at least be an extra filter), but it's kind of interesting. Well, to me.

Thanks to Mark for the idea.

Never In Doubt

With about 4 minutes remaining in the third quarter, I layed a fair chunk of money on the Philadelphia 'Sixers (see above) who were up by three points against the Charlotte Bobcats. It seemed excellent value to me at the time. A lot of time left, and a one possession game, but the course of profitable trading doesn't always run smooth. By the end of the quarter, the 'Sixers were trading at around 1.2, and with 9:21 to go, the lead was up to 12, the price around 1.03 / 1.04, and my mood was not good.

I updated the spreadsheet with the loss, and went into 'big picture' mode and telling myself that these things happen and remember how good December was etc. I even started praying. Well, I didn't actually go that far, but the outcome was looking bleak.

The lead was at 11 with less than seven minutes left, then 9, then 7 and a flagrant foul called on Philadeplhia. The Bobcats duly hit the free throw, and on the subsequent possession hit a three to get back to where they were when I entered the market, only this time with momentum definitely on their side. I love these moments. A layup, a stop, and a three pointer and the Bobcats were now ahead and favourites.

I wrote a comment on someone's the blog the other day about the thin line between defeat and victory - and while it sometimes seems like the luck is always against you, there are days when a minor miracle happens. (OK, so a 1.03/1.04 shot flip-flopping is not exactly one in a lifetime stuff, but it wasn't looking too good). Ultimately the 'Sixers tied it up late, and won in overtime, but with the Bobcats trading as low as 1.16, I didn't really care by that point.

I'm hoping my daughter doesn't read this. It's her birthday tomorrow, and she might be hoping for more than her usual Rolos and pair of socks.

Not So Progressive

One fallacy that seems to be common among gamblers is that a "progressive" staking plan can turn a system that makes a small loss to level stakes into a profitable one.

While the term "progressive" sounds very considered, if the more appropriate term of "aggressive loss chasing plans" were to be used, perhaps it wouldn't sound quite so so sensible.

"Progressive" staking plans means increasing your bet size following a loser or a series of losers. In the short-term, this strategy may work, but if your system is a losing one, sooner or later you will lose your entire bank. Increasing your bets following a losing streak doesn't make any mathematical sense. The laws of probability and mathematics pay no heed to previous unrelated results, be they good or bad. Betting against those laws is a recipe for financial ruin.

Many punters believe that a progressive staking plan is the magic ingredient for profits, and they are partially right in that good money management principles are essential, but to expect a progressive plan to be the secret to success is mathematically flawed. Some system sellers of course play on this naïveté to claim "98% success rates" for example, but as I have written before, if your system isn't profitable to level stakes, nothing is going to help you in the long-term.

Leaving Home

Not a good weekend for anyone trying to find value on home teams. Just one winner for me in Olympique Marseille (1.87) from seven selections, although I mistakenly included Kaiserslautern despite them qualifying as a (winning) Bundeslayga pick. This is what happens when countries take a winter break!

The home value picks quite often overlap with Football Elite's picks, and this weekend was no exception with Schalke '04 and Birmingham City being two of the Recommended Bets. Neither won, and nor did Sunderland and Wigan, their other two Recommended Bets. One winner from two Short List bets with Stoke City winning, but Cesena losing. Regarding Sunderland, I also had this as value, but discarded it because of the 'derby' factor.

The one away pick won, and the 'Stong' draw and Peter Nordsted's Drawmaster systems were both profitable. I had two strong draws, and both came in - St Pauli v Freiburg at 3.55, and Tottenham Hotspur v Manchester United at 3.45. The weaker draws were less successful, with only Wigan v Fulham (3.35) winning from six selections. For 2011, the strong draws are 3 from 5, the weaker draws are 5 from 11. Not too shabby.

I traded the Tottenham Hotspur v Manchester United game today, watching the price on the 1-0 score which I layed at 12.5 pre-game. I'd read that in a goal-less game, the 1-0 price shortens to about 54 minutes. Well, at 54 minutes it was around the 6/6.2 mark, and I layed it again (a little cost averaging here) thinking it would move steadily up from here. Not so - it stayed there until 72 minutes, and just as it started inching up, the sending-off occured and the price dropped to around 5.0. The best laid plans... Even at 90', wth 4' added on, the price was only back to pre-game, but in the end all was well, but that wasn't the smoothest bit of trading I have ever done.

Not much luck in the NFL play-offs this weekend. Small wins on Green Bay and Chicago, and slightly bigger loss on the other two games. Once again, it appears to be easier trading regular season games than post season!

Finally, there was a comment on my last post regarding RQ telling me "and stop pinching things from the BF Forum to put on your blog ;-)" Well, sometimes there's a little gem to be found there, and as anyone writing a non-P&L blog will know, we need all the help we can get.

Of course, a lot of what is on the forum is to be ignored. For example, take this comment from a clearly delirious, certifiable Enola Gay last April in reply to the perennial question "Any good betting blogs out there?", he wrote:

Mark Iverson - aka Marky Sparky is a great read.

I thought my sides were going to split when I first read that!

Risk Intelligence Quotient

Risk Intelligence Quotient (RQ) is a measure of a person’s ability to estimate probabilities accurately.

People with high risk intelligence tend to make better predictions than those with low RQ.

There is five minute test at http://www.projectionpoint.com/index.php which will measure your RQ. For what it's worth, my score was 81.

The Office for National Statistics carried out a study a few years back, which included these two questions: Choose from A) A guaranteed payment of £1,000 or B) A 1 in 5 chance of winning £10,000.

Would you rather receive £1,000 today or £1,100 next year?

The results show that people were predominantly averse to risk and had short time horizons financially.

More than three-quarters (78 per cent) of people said they would choose to receive a guaranteed payment of £1,000 rather than take a one in five chance of winning £10,000, while 22 per cent preferred the option of winning £10,000.

Similarly, 80 per cent of people said they would rather receive £1,000 today than £1,100 next year, while 20 per cent said they would rather receive £1,100 next year.

Drawmaster Picks 15.Jan.11

Peter Nordsted's Drawmaster tips this weekend are: Wigan v Fulham (3.20); West Bromwich Albion v Blackpool (3.80) and Tottenham Hotspur v Manchester United (3.30). The Drawmaster system has drawn a blank for three consecutive weeks, but at the typical draw prices, long losing runs are inevitable. I actually see more value in laying West Brom here, than in backing the draw.

I'm adding one other tip which is Over 2.5 goals Stuttgart v Mainz which was available at 1.9, but has come in to 1.86. Not surprising, and still value in my opinion.

Dreaming

Bayer Leverkusen appear to still be in hibernation mode, or at least their defence was for the opening two goals tonight, which put paid to the draw possibility. And it was all looking so good at half-time. My dreams of riches were soon shattered, unlike a Walter Mitty character on the Betfair forum who wrote this:

Here is what I can currently afford to buy on my quest to buy my dream home in Florida.

Start Bank: $198 Current bank:$286,31
Projected Date for buying my dream home: Nov 23, 2011

My goal is to build up a large enough bank to buy a home in Florida. I was there a few years ago, and it is a very nice climate (generally) and was thinking that it would be a nice thing to buy with my betting bank. It should also be said that it is a very good time to be buying real-estate, now and for the next few years, but the window of opportunity will close again. Anyway, it is my goal.My dream. My ambition. I believe that everyone should have some sort of tangible goal to work towards. Particularly something with a date and a time to achieve it by. So, I need to accumulate enough money to buy a house within 12-24 months, but I want to start with a small bank - $200-$300. I'll need to have a small edge and compound the profits ruthlessly and consistently for quite a period of time.

I've been working it out mathematically, and I believe it actually has a good chance of succeeding. It is really a question of sticking to it day after day with iron discipline and doing nothing else.

I will post my results as I go and I will discuss my system and model, staking, etc. as I go. I will also calculate mathematically the date of buying my dream home in Florida. On that date, I will publish the whole system, complete results ...everything...to help others to achieve their own goals and ambitions.

Well, don't hold your breath. The guy has been on Betfair for close to six years, and a bank of $198 hardly augurs well for his dream to come true. While there's nothing wrong with having a dream, keeping it real might be a consideration.

Full House

Strong draws are thin on the ground this weekend; just two - St Pauli v Freiburg and Tottenham Hotspur v Manchester United. Weaker draws are Sporting de Gijon v Hercules, Wigan Athletic v Fulham, Lens v St Etienne, Bayer Leverkusen v Borussia Dortmund, Cagliari v Palermo and Brescia v Parma. Home value picks are Auxerre (2.04) v Monaco, Brest (2.02) v Caen, Olympique Marseille (1.87) v Bordeaux, Nuremburg (2.14) v Borussia Moenchengladbach, Schalke '04 (2.22) v Hamburg, Kaiserslautern (1.98) v Koln and Birmingham City (2.56) v Aston Villa while AS Roma look value at 2.06 to win away to Cesena.

I'm a little concerned that some of the form is now several weeks old in France and Germany as they emerge from their winter hibernation, but it's good to have a full slate of matches again.

Golden Nuggets

Anyone who follows the NBA, or basketball in general, will know that one player can make a huge difference to a team. The absence of a player such as Kevin Durant, Kobe Bryant, Monta Ellis, Dwyane Wade or Amar'e Stoudemire (how cool is that to have an apostrophe in your name?) who score an average of 25 points a game will significantly affect the odds, far more than the absence of say Didier Drogba would affect Chelsea's price. So when I heard that the Miami Heat would be missing LeBron James (average 25.4 points per game) for their already tough game at Denver v the Nuggets, a quick check of the handicap market (Denver getting 2.5) showed money on Denver available around the 1.85 mark. Value? The Nuggets won by 28.

I mentioned that the game was 'already tough' and that's because the NBA regularly schedules back-to-back (consecutive nights) games for teams. There are various systems and theories that revolve around game twos of back-to-backs, but my experience is that any edge is miniscule. Two nights ago the Heat played in LA and lost to the in-form Clippers, and then had to fly to Denver for last night's game. In US sports, Denver is a unique place to go for a game, given that the altitude there is about, as Broncos fans will know, one mile, and ideally teams arrive there more than a day ahead to get acclimated. Of course, when you have a game the night before, you have no choice but to arrive late, and if Miami left LA straight after their loss, they wouldn't have arrived until the wee hours of Thursday, and losing an hour on the way.

How significant is this? Over the last 55 games that Denver has hosted an opponent playing the second game of a back-to-back, they have a 46-9 record. A little nugget of information for you (pun intended).

The Clippers are also worth looking at a little deeper than their overall record. They started the season abysmally, going 1-13 before finding their feet improving to 4-8 over the next twelve games. Since that time, they are 8-3 and beating teams like Miami almost with ease. They have the 13th best (ok, 3rd worst!) record in the Western Conference, but with more than half the teams making the play-offs, and half the season to come, they can still make it. They are currently 7 wins behind Portland, who have injury problems (the latest is Brandon Roy having surgery on both knees) and I can see the Clippers catching several teams currently above them.

Tissue Compiling

A nice lay of Liverpool helped to ease the pain of the Premium Charge and I have the latest update to the ratings spreadsheet to thank. Prior to last weekend, I would have gone with the strong draw on this game, but I have spent some time improving it so that when I enter the teams names, along with the predicted superiority, it also now automatically calculates odds for the games. Prior to this, the calculation was a time-consuming task that I could only do for specific games.

It should get more accurate as I get more data into the spreadsheet. This is only my second full season, and some of the numbers are drawn from a small sample, so care still needs to be exercised.

Take the Wigan Athletic v Fulham game this Saturday for example. Wigan are -0.24, and my odds are H: 2.56 D 3.1 A 3.5. They compare relatively closely to Betfair's 2.62, 3.3, 3.1, with my draw price shorter because at -0.24, this is a weak draw, and weak draws have been hitting at a higher rate than they 'should'.

The Merseyside derby? Ignoring the 'Dalglish homecoming' factor, and Liverpool are -0.34 and the odds for me are H: 2.4, D: 3.59, A: 3.4. Betfair have 2.32, 3.35, 3.65. Prety close, although I suspect that I need to adjust more for recent form. I could be joining the Lay The Draw club on this one!

I'm also having a look at the Over / Under 2.5 goals markets - still lots of improvements to be made, but it's promising - and fun.

Closing In On A Million

It's Premium Charge time again, and the portal for this week has me at 19.92%, (up from 19.82%, but still not over the magic 20% mark), and so I am hit again with the charge. That's ok though, next week I'll be at 20.02% with a little luck.

Lifetime Profile
Markets 110354

Gross PL £ 1,775,738.83

Commission Generated £ 372,946.88 +
Other Charges £ 74,758.99 +
Premium Charges (exc. last week) £ 917.78 =
Total Charges £ 448,623.65

Total Charges % 25.26

Unfortunately, that is not my account above, but it was interesting reading. Someone posted his account details on the forum, and while I have no reason to doubt their authenticity, it is always a possibility but the figures are in line with what would be expected.

Of course, when presented with numbers like those, one can't help but want to compare ones own figures. While the account above is significantly more active than mine, with over 110k markets entered, the average gross profit per market of £16.09, and net profit of £12.026 are not too dissimilar to mine.

Now I just need to find a way to get involved in a lot more markets and maintain the same average profit. The first part is a lot easier than the second, but if I can stay in the game for a total of 83,153 quality markets, (actually slightly less as my average profit is slightly higher), the first Betfair million will be in the bank! At about 50 markets a week, that'll be in about 27 more years. Hmmm. Not sure I can wait that long.

Pooling Thoughts

I was wondering where the extra 100+ readers a day had come from - over 400 daily for the past week, comapred with just over 300 a day in December. The answer appears to be a post on the Betfair forum from dlarssonf which, in response to another request asking for betting / trading blogs, had this to say:

"Green All Over" is one of the best, Cassini is totally up his own arse though which makes it a bit nauseating sometimes but apart from that, credit where its due, there is some excellent posts.

I think he means there 'are' some excellent posts, but the comment is appreciated. I think.

Blackpool v Liverpool tomorrow night. I hope Mark Iverson won't object to me posting his comment on this game, but I do so because it mirrors mine. Mark wrote:

One thing I do like about following my ratings is that it cuts out the background 'noise' and there's plenty being generated by both these clubs at the minute. Liverpudlians will be hoping for a fairytale start for Dalglish but from what I can make out it could be a difficult trip to the seaside. Both teams have very similar 4 match averages and their home/away form looks on an even keel. So what's the play? I can't rule out Blackpool sneaking this one so I need them onside along with the draw. Conclusion: Lay Liverpool @ 1.98

On the ratings alone, Liverpool are way too short, but of course there is the 'new manager' factor to consider. Blackpool's home form is poor though, but then again so is Liverpool's away form - ranked 17th and 18th respectively. The ratings have this as a strong draw, but like Mark, I want the Blackpool win on my side and a lay of Liverpool looks the value play to me.

Ducks And Tigers

Nothing doing on the Hercules v Atletico Madrid game, but at least they had the decency to let me lay off on the 0-0 score before opening the scoring. Hercules have had an impressive first half to the season, especially at home, and are now 11th in my ratings as well as in La Liga and have a good chance of staying up after being promoted last season. Their one away win was the 2-0 win at Barcelona, which was Barcelona's only home defeat to date.

The College Football season comes to an end in a few minutes, with the National Championship game between the unbeaten Oregon Ducks of the PAC-10 conference and the unbeaten Auburn Tigers from the SEC. Oregon are slight favourites, but the markets are predicting a close game. For those who like these trends, the SEC hasn't lost in six BCS National Championships, and have covered the spread every time. Oregon average almost 50 points a game (top of the FBS teams) and are number one in total offense averaging over 537 yards per game. As well as being a top passing team, the Ducks can also run the football, averaging almost 304 yards per game, good enough for fourth best in the nation. Something to consider if you are trading this game is the second half strength of Oregon. The Ducks outscored opponents 277-77 in the second half of games this season.

Football Pricing

Not much going on tonight in football, with just the Hercules v Atletico Madrid game of interest to me. The ratings have this as a strong draw, which is available at 3.55 on BETDAQ (I missed the 3.65). These picks are hitting at 37.5% for the season in La Liga, and 35.16% across all the majors (excluding the 'wacky' Bundesliga).

Yesterday was a bit of a nightmare, with nothing seeming to go my way. The PC avoidance strategy of backing 0-0 was tried in the Leicester City v Manchester City game, and of course lasted all of 22 seconds. Then I tried my hand at trading the NFL Wildcard games on BETDAQ, and got caught in both games for significant losses. For trading BETDAQ is just clunky to use. When you place a bet on Betfair, in the event that you want to cancel it immediately (as is often the case in American Football with its game changing 'penalty flags' for example), there is a Cancel Unmatched button right where you have just entered the bet, so it's a simple process. Not so on BETDAQ, where the quickest way seems to be to click on two buttons on the bottom right of the screen, which takes far longer ('far longer' being a relative term, but significant enough to have a negative effect). I wasn't helped by the fact that the Kansas City Chiefs and the Philadelphia Eagles were both very poor, but anyway, the result was a fair-size loss, but the lesson has been learned that for trading a sport like the NFL, BETDAQ is just not suitable. Time to move on.

Mouldhouse had another reply, which is worthy of inclusion in a post rather than remain tucked away in a comment that might be read by just me. He knows far more about the workings of the football markets than I do, and while the UK Betting Exchanges might be smaller fish than we sometimes think, I suspect that a wildly varying price such as Liverpool's at Blackburn Rovers last week is more down to fresh information becoming known, than because someone in Asia has a more sophisticated model than anyone else. As I wrote before, the price is going to be set where supply meets demand, and different markets are always going to be in the same ballpark. If the price is NOT where supply meets demand, then an opportunity exists, as I learned in Economics back in '73-75. Besides, only members (account holders) of Betfair are able to offer prices on Betfair. BP are traded on the New York Stock Exchange and in London, and no doubt several other markets too. Are the prices wildly different? Does news that becomes known in New York before London take long to impact the price in London? Anyway, here's the comment before I lose more money on the Hercules v Atletico Madrid 0-0 score!

"Prices on the exchanges reflect the opinion of members of the exchange. The price is where supply equals demand."

Nope, that's not correct. Watch the asian bookmakers prices, and watch when they change, and watch what happens to betfair a couple of seconds after. The pricesetters from there are beating the drum, and the betfair market just follows accordingly.

There's one supplier with a very fast bot that moves to the asian lines or into that spread within a couple of seconds.

In the recent premiership games the vast majority of teams traded in a very large range of prices. E.g for decent money Liverpool traded 2.3 - 1.87 away at Blackburn.

Did the opinion of the members on the exchange really change that much? At what point was this extremely liquid market "providing an accurate assessment of probabilites"? The same can be said of almost all the games the other night (last wednesday).

I know its nice to think that betfair is a massive market, and follow the EMH [Efficient Market Hypothesis], etc, but its just not the case I'm afraid. Hundreds of millions is being bet in asia where the prices come from, which filter down to Betfair, where a million or two is matched on a game pre-off.

I take positions in >50% of UK football matches and win money over the season. Not at the same ROI as F-E or even similar, but the absolute profit of course vastly exceeds his. How is it possible to make 5%-10% ROI over many seasons if the markets are even loosely efficient? Betting in over half the games is selective to a degree, but nothing like the degree which you are suggesting.

I'm afraid the sports markets are nowhere near sophisticated enough to be considered efficient as yet. The very successful stock investors (e.g. Buffett) show that the stock market as a whole isn't efficient as yet, although the EMH is a lot easier to "accept" there - sports markets simply have no chance, as yet.

PS: If the One Armed Trader would please e-mail me at calciocassini at aol.com I have the study on which my NBA Big Home 'Dogs post was based. Thanks.

Always v Often

Another comment from Mouldhouse:

However your comments about the source of odds and their predictive abilites are wholly inaccurate I am afraid.

Do you realise that the vast majority of markets on the exchange are shaped by external forces - cricket by the asian/indian market, soccer by the asian books, american sports by pinnacle and vegas lines?

And if liquid markets can often accurately offer probabilities of an event (they can't!), what's the point behind trying to beat them with football ratings? Why is it possible to lay the odds on teams year in, year out, blindly, and make a profit?

You can't hold all those views simultaneously, they contradict each other on a number of levels.

Prices on the exchanges reflect the opinion of members of the exchange. The price is where supply equals demand. External forces sounds very dramatic, but in any competitive business, all things being equal, prices will be similar from one source to another. If you set a price that is out of line, then it will either be completely ignored or snapped up. However, I qualified my comment with "...the BEST prices are from individuals" because if individuals like you and I want our bets to be matched, we need to at least match the odds available elsewhere.

As for the prices on liquid markets reflecting the true probability of an outcome - I am not saying that the markets 'always' accurately reflect the probabilities of events. I was addressing the comment about oddsmakers odds reflecting probability, which they don't, and while the prices on the football markets are for the most part extremely accurate, as Football Elite have shown, it is possible to win long-term if you are selective. The implied probabilities are often correct though, or the layers would soon be out of business, but the trick is to identify those games where the prices are 'wrong'. Football Elite do not have Recommended Bets in more than a small number of games each week.

The goal of the ratings? - to identify those games that offer value. The aim is not to try and win in every market. The market may often be right, but it isn't always right.

As for blindly laying odds-on teams year in, year out, I'm sure that would not be a profitable strategy, but selectively laying odds-on teams can be as I have written about in the past, although it would be surprising if the market didn't adjust at some point.

Having said all that, it is far easier to find value in back-and-forth in-running events which is why football and my ratings are just a small part of my betting arsenal.

Which leads me into today's football round up, and starting with the worst, the Serie A home picks were nothing short of awful. AC Milan gave up four goals at home in a draw, and Parma and Lazio both lost 1-2.

In Spain, Espanyol at least won comfortably enough, but Racing Santander gave up a 90' equaliser.

Football Elite had Santander and Parma as their Recommended Bets, but value doesn't always mean a winner and their poor run of late continues.

The silver lining today was the performance of the draw selections, which saved the day. The nap strong draw Chievo Verona v Palermo (3.3) finished 0-0 as did the weaker picks of Osasuna v Getafe (3.4) and Cesena v Genoa (3.25).

And of course, Manchester United came in at 1.72.

The first NFL Wildcard game didn't go to plan today though with the Kansas City Chiefs making turnover after turnover and costing me most of Saturday's profits in the process. And the worst of it is that the loss was on BETDAQ so it doesn't even help the PC this week! Hoping for better from the Packers and Eagles coming up shortly.

Understanding Odds

Rich had a comment on my "For Entertainment Purrposes Only" post.

Discussing "value" as related to the probability of the result of a sporting event shows a fundamentally flawed understanding of what the odds on offer means. I quote "Odds makers will tell you their job is not to predict an event's outcome but, rather divide the public as to who it thinks will win. "When the oddsmakers have set a point spread properly," said Howard Martin, a noted expert on how odds are calculated, "there will be an equal number of people betting each side of the line."

Although that comment refers to US sports spreads, it's equally true of all odds.

I have to disagree, since it all rather depends on the source of the odds.

The odds you will find at a US Sportsbook or a UK bookmaker have a large built-in over-round which is not found on betting exchanges. No one would suggest that the price offered by a bookmaker could be translated directly into an implied probability, but when using prices from a betting exchange, you can often do this, especially in liquid markets. One study using the prices for the 2006 World Cup showed that "analysis of outright betting on the 2006 World Cup revealed that Betfair's book on the top twelve teams in the betting market was betting to an over-round of 100.92 against an average over-round of 112 elsewhere." Look at today's upcoming NFL game between the Baltimore Ravens and Kansas City Chiefs. A quick look at the current prices on offer from William Hill are 1.57 and 2.55 respectively, (102.91%) while on Betfair you can get 1.58 and 2.7 (100.33%). If you hold out for 1.59 and 2.72, the book becomes under-round. Betfair's implied probabilities for today's game have Baltimore at 63%, Kansas City at 37%. (At least William Hill know that Kansas City (a city) is the team's geographical location rather than Kansas (which is a state). I've written on this subject before, and it's pathetic that a company the size of Betfair can't get this right. And just so you all know, most of Kansas City isn't even in Kansas - it's in Missouri!)

Also, it's worth mentioning that a study by economist Steven D Levitt in 2004 actually showed that US sportsbooks do not set prices in the NFL to clear markets, as was commonly assumed, but set prices to maximize profits. "His data supported the theory that bookmakers are better able to predict both the outcomes of NFL games as well as bettors’ tendencies. This predictive superiority allows bookmakers to establish betting lines inducing uneven betting favoring the less likely outcome, increasing bookmaker profits despite the increased risk." I think it would be naïve to think that UK bookmakers didn't take a similar approach, at least in some sports.

Agreed that anyone who thinks that a bookmaker's odds reflect probability "shows a fundamentally flawed understanding of what the odds on offer mean", but the best prices offered on an exchange are, for the most part, from individuals who have no interest in building an over-round book.

Serie A / La Liga

Serie A and La Liga action today, and the single strong draw pick is Chievo Verona v Palermo. Three weaker draws are Osasuna v Getafe, Sampdoria v AS Roma and Cesena v Genoa.

Home value picks are AC Milan (1.61) v Udinese, Parma (2.0) v Cagliari, Lazio (1.42) v Lecce, Espanyol (1.89) v Real Zaragoza, and Racing Santander (2.0) v Sporting de Gijon.

If Manchester United v Liverpool were a league game, 1.72 is a value price on United. I'm in for a small punt, hoping the game is played as if it were an EPL match.

And Eddie Howe has a big decision to make. He is, of course, hugely popular at Bournemouth, and rightly so. He has turned Bournemouth around on a shoestring, and his loyalty to one club is something we don't see often these days, and now he has to decide whether to join a sleeping giant of the game, go to Charlton Athletic, or stay at Bournemouth. Three clubs currently within eight league places of each other. I hope he seizes the opportunity of a lifetime and comes to south London - SE25, not SE7.

Betting: For Entertainment Purposes Only

A refreshing response to my comment on the Expat Punter's post from earlier. I was hoping that it wouldn't be taken the wrong way, and Rob made a considered reply which deserves posting in full here.

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.

Just a couple of comments before the Indianapolis Colts v New York Jets game gets underway. Agreed, that a winner doesn't mean the bet was value. Nor does a loser mean that the bet wasn't value. You could be offered 2-1 on a coin toss, and on a single spin you will win or lose 50% of the time, but 2-1 is a value price every time. A lot of people, especially older punters raised on horse-racing, fail to understand this. As for the majority of bettors being "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", that's fine with me. As Mouldhouse said, anyone serious about making money from gambling needs all the above, and lots of them, because obviously, without losers, there would be no winners. Oh, and yes, we need discipline.

Saints Go Marching Out

With no Premier League games today, I assumed that there would be no selections for Peter Nordsted's Drawmaster system, but I was wrong. Rather oddly, he dipped into League Two for his picks, and probably wishes he hadn't. None of the three picks of Crewe Alexandra v Wycome Wanderers, Southend United v Chesterfield and Stockport County v Gillingham finished drawn, and two of the three were decided by three goals or more - 3-0 and 1-5. Even if all three had been draws, I would still question the decision to force three selections for this system rather than just wait for a week. Anyway, the result is that having had just two blank weeks in the first eighteen of the season, the system has now come up empty three weeks in a row.

Also drawing a blank today were Football Elite, who had Real Sociedad at 3.0 to beat Sevilla. They led 2-1 at half-time, but lost 2-3.

The first NFL Wildcard play-off game is currently in progress, and the 1.22 Saints price I suggested was too short drifted out to 10.0, and I am 'green all over' after the early signs were for a straight run to 1.01 for the Saints. American Football games are seldom decided in the first quarter though, and while it's easy to panic when it seems all is lost, keeping a clear head and making rational decisions is the way to go, and it's a lot easier to do when your stake is 'sensible' and you can see the big picture.

d'Alambert

I didn't know until today that Stevenage Borough are now just Stevenage. A bit unfortunate when your nickname is "The Boro". This wasn't the only big change to their entry in my spreadsheet with their 'shock' victory over Newcastle propelling them to top spot in the League Two ratings. I'm still not convinced that I should transfer points between teams on cup days, because one result can make a big difference, but the big benefeciaries are teams that I seldom use the ratings to bet on anyway, and the teams that suffer probably shouldn't be losing at home to Notts County or at Stevenage anyway!

A good comment on my previous post about "Finding An Edge", which was a little provocative. I can be like that. Mouldhouse took the time to say a few things.

"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".

This is why I qualified my statement with 'if you are profitable long-term', and while a million pound lottery winner would (I would hope!) be profitable long-term, I rather meant to exclude such exceptions.

"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.

Yes indeed, but the key here is that your experience of the market tells you that the probability is high that you will be able to exit your position for a profit. I might lay at 1.05 not because I expect the layed selection to win, but because I am confident that I can exit at 1.1 at some point. Is 1.05 value to back or lay? If the bet goes on to win more than 95.24% of the time, then arguably it is. But what if 55% of the time it goes out to 1.1 before coming in to win?

"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.

Fortunately for us, there seems to be no likelihood that optimism will conquer realism any time soon. Evidence such as the never-ending demand for Roulette and Lottery betting systems shows that logic takes a back-seat for many people. Or the idea that a funky staking system can somehow turn a losing system into a winning one.

Still, these people are in good company. Even the famed mathematician Jean le Rond d'Alambert famously erred in claiming that the probability that at least one head should appear in two consecutive tosses of a fair coin is 2/3 rather than 3/4.

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 misundersttod 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.

Wildcard

A couple of winners yesterday, with AC Milan winning at 2.22 and Roma - Catania going Over 2.5 goals before half-time. I like those quick wins. Brescia disappointed by losing 1-2 at home to Cesena though, and Football Elite came up short with Recommended Bets Bologna and Lecce both failing to win.

A limited menu this weekend with France and Germany messing around with resting and a few friendlies, while in England we have the entertaining, but not for serious betting, FA Cup 3rd Round. So that leaves Spain and Italy, and of the three La Liga games on Saturday, two are weak draws with Barcelona too short at 1.28.

I think I shall be focusing on the NFL Wildcard play-offs this weekend. Two games on Saturday and two on Sunday and the schedule means one game at a time. Liquidity should be good, which means good trading pickings.

History shows that home field advantage is often no advantage at all, and "rest regularly leads to rust". Wild Card Weekend is traditionally the most unpredictable of the three rounds that comprise each conference's tournament. Since the current four-division format was instituted in 2002, the visiting and lower-seeded team has won 14 of the 32 opening-round matchups, or roughly 44 percent. Over the three most recent seasons, exactly half (6-of-12) of the Wild Card entries prevailed on the road and advanced to the next week.

So with that in mind, here are Saturday's games:

NFC: New Orleans Saints @ Seattle Seahawks: The Seahawks are a poor team, losing 7 of their last 10 games, scraping into the post-season by virtue of playing in the weakest division, and should lose to the current champions. They are getting 10.5 points, making them the biggest home underdog in play-off history. Having said that, the Saints aren't as good as last year but at 1.22, that's a little short for a pre-game back.

AFC: New York Jets @ Indianapolis Colts: Manning is a better QB than Sanchez, but the Jets have the advantage in the running game, rating fourth in the NFL, while the Colts are only 25th defending the run. Indianapolis are favourites at about 1.8. No pre-game play on this one, but if Manning is off his game, and the Jets are running riot, look to lay another home team. Even if the Colts go ahead, they have a habit of allowing backdoor covers if the handicap is your choice of poison. The spread is just 2.5 here, so this 'should' be the best trading game of the day.

Finally, I haven't met too many billionaires in my life, but in the summer of 1997, I got to meet, and have a casual dinner, with one of America's wealthiest men - Don Tyson, who as a billionaire, had just a little more money than I ever will. A real down to earth guy, who loved to party and game fish, when he found out I was English, told me several back to back Essex Girl jokes. His response to "What have you been up to lately Don?" was "Drinking and f***ing, not necessarily in that order". He died yesterday aged 80, after an 'interesting', and religion free, life. He was quite a character. It still amuses me that when the bill for dinner arrived, I felt obliged to offer to pay my share.