Wednesday, 25 January 2017

Elucidation

Despite my best efforts to bring clarity and logic to the issue of court-siders, some people continue to not quite grasp the logic, or perhaps not want to grasp the logic, with Prabhat writing:

I'm a little unclear what the claim is with regarding to court-siding and the lack of an edge.
Betting on tennis, your edge can presumably come from the following factors:

a) Better understanding of the relative strength of the players. (This is where you admit there can be an edge).
b) Better understanding of (a) with respect to given situations. I.E. How likely is Wawrinka (or a generic player) to make a comeback two sets down vs Federer (or a generic player). I'm not sure whether or not you think there can be an edge here.
c) Better knowledge of what is actually going on. (This is court-siding). AKA average mug thinks score is 30-40 or 40-30, courtsider knows it's 30-40 and is betting accordingly.
I am extremely unclear on why
a) The courtsiders edge persists during a changeover when everyone knows the score.

and

b) Why you are absolutely positive that a court-siders temporary information advantage is so strong to nullify all analytical edge anyone might have.

I am not saying it can't be. I'm just saying I don't see where you have made this case clearly.
Your analogy is betting on the colour of the next car against a guy 100 yards ahead of you on the road. My question is if you'r betting on "more black cars than blue in the next 1000" why would a guy ahead on the road have such a huge edge compared to someone who's studied traffic distribution patterns?
Fortunately James is here with an extremely clear and concise response (much more of this, and I'll need to add James to the payroll):
You might be confusing betting and trading. I apologise, if you are not.
You can analyse an up-coming match and place a bet on it but all the data is public so there is probably not going to be any edge.
When trading in-play new information is being created all the time and you need to be the first to get that information to trade it with an edge.
Yes, at the changeover, the playing-field is level but then you are back to the betting problem and all information being public.

There will be the ill-informed who are wading into the market with daft ideas and you need to be fast to grab their volume before the professional set-ups.

I shall discuss some of this in my next article.
We look forward to that next article. I'd add that when I read Prabhat's comment, it seemed like he felt the court-siding syndicates bet ONLY based on what they were seeing, but this is not the case. I may have been influenced by Prabhat's views in June 2014, when he wrote:
As far as better analysis is concerned, what I mean is that some people will be better at analyzing data at the end-of the day than others. True, some financial data will reach big players before others and thus be 'old', but unless those big players are analyzing it perfectly, the fact that they get data in advance isn't going to result in the market automatically 'digesting it'.
That's a very optimistic, but unrealistic, viewpoint. The court-siding syndicates will have "studied traffic distribution patterns" at least as thoroughly as you have, probably more so, and since they are likely to have more resources than the individual, you're not going to have an edge here either. Do you really believe you know the probabilities for a Wawrinka comeback v Federer from two sets down better than everyone else?  

The idea that these groups are paying good money to gain an advantage that they then waste by not knowing what to do with it, just doesn't stand up to close scrutiny. This idea is as illogical today as it was back in mid-2014. 

Hopefully Prabhat, and everyone else, is clear now. This topic has certainly been good for the hit count.
 

1 comment:

Tony Stephens said...
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