Saturday, 30 June 2018

La Liga Draw

Another top league, and as you might have guessed, another league where backing the Draw blindly isn't a good idea. A loss of 144.84 over the past six seasons when trying this, an ROI of -6.4%. We lost one match due to no prices, leaving a sample size of 2,279. 

Excluding matches where the 'true' Draw probability is 0.25 or lower will save you 110.39 points, while excluding matches where one team has a win probability of 0.4 or greater will save 88.9 points.

Using the relative difference in win probability between the two teams works well in this league, with the Draw in matches up to the 25% level generating an ROI of 8.81%.
When the Big 3 (Atlético Madrid, Barcelona and Real Madrid) play each other, backing the Draw is profitable +9.97 points. When the Big 3 play the Small 17, backing the Draw would have lost you 74.78 points. 

Looking at other derbies, the Galician Derby has an ROI of 16.1%, although there won't be one next season following Deportivo La Coruña's relegation.

The Sevilla Derby has an ROI of 9.6%, while the Basque Derby with five Draws in the 12 contests has a rather impressive ROI of 50%. When the other Basque clubs (Alavés and Eibar) are included, the ROI drops to 10.6%.

If anyone has any other leagues that they are interested in, let me know. If Joseph Buchdahl's Football Data website has the numbers, I can plug them into my spreadsheets easy enough. 

League Two Draw

Readers will know where the value lies for a blind strategy in League Two, and it isn't in backing the Draw. 

Not quite as bad as blindly backing the Home win, which has a -5% ROI, but pretty awful.

Two matches lost from the early weeks of the 2012-13 season with no prices, but still a decent sample of 3,310 matches. As with League One, there are not many games where the Draw price is 5.0 or higher, but unlike League One, the usual loss on these matches is present. 
When the win difference is up to 25%, backing the Draw is pretty much a wash.

The best Draw backing strategy in this league is to back it when the 'true' implied probability is greater than 0.29. 'True' in this case means that the over-round is removed and the Win, Draw, Loss probabilities equal 1. Because the over-round in this league varies a little more than in the top leagues, from 101.9% to 107.3%, the 'true' Draw price of ~3.44 doesn't correlate exactly to a Pinnacle Draw price. I should point out that the 107% over-rounds were all back in 2013, and the worst (from our point of view) over-round recently is 104.6% in 2018.

So if you do your sums, and back the Draw when it's 'truly' a .29 or greater chance, there were 49.18 points to be made from 501 bets, an ROI of 9.8%. There's also appears to be an edge backing the Draw when the Away team has a 'true' probability between 0.5 and .67, 23.26 points from a small 98 bets, a 23.7% ROI. 

Next up: Spain

Friday, 29 June 2018

An Average Start


The average number of goals per group in a 32 team World Cup before this year was 122. This year's total was 122.

England's Group G set a record for most goals in a group, its 24 goals beating the previous high of 22.

The brackets are now set, and only one possibility of a repeat World Cup Final, which is that of Brazil v Sweden. 

Updated from an article I had published four years ago, here is a look at the Round of 16.

Once the knockout stages are reached, it is probably not surprising that, with avoiding defeat the priority, the average goals declines to 2.1 per game in the Round of 16.

As with the opening round of matches, the most frequent score is 1-0, (20%), followed by 1-1 (17.5%) and 0-0 (15%).

65% of matches are Under 2.5 goals, an implied price of 1.54.

In the last five Rounds of 16, just six matches have been lop-sided, with half of those won by Brazil: 1998 Brazil 4 Chile 1, Denmark 4 Nigeria 1; 2002 England 3 Denmark 0; 2006 Brazil 3 Ghana 0; 2010 Brazil 3 Chile 0, Germany 4 England 1

The Round of 16 for the most part sees closely fought matches. Fourteen matches in total, and at least two in each tournament, have gone to extra-time, and six of those to penalties. In 2014, five of the eight games needed extra-time. The implied draw price is 2.85, and at the time of writing, this outcome in the Uruguay v Portugal game is around 2.97.
 

Hard to get much more of a three-sided coin toss than these prices!
Three matches are a UEFA v CONMEBOL fixture, with honours even at 3-3 in previous Round of 16 match-ups, while a CONMEBOL team has never lost at this stage against a CONCACAF team. The second most lop-sided tie this year is Brazil v Mexico, who have been eliminated at this stage in all five 32-team World Cups.

The most lop-sided tie is Belgium v Japan, not too surprising given that no AFC team has survived this round, other than hosts South Korea who needed a Golden Goal and some dubious refereeing to get past Italy in 2002.

After no all-UEFA ties in 2014, there are three this year, all in the same 'European' half of the bracket. 8 of the previous 12 match-ups have been decided by one goal or fewer, but only two have gone to extra-time.

Thursday, 28 June 2018

Generally Speaking

Of the 47 completed groups to date from the 32-team World Cups, only two saw the winners decided on the 'goals scored' tie-breaker, with England the runners-up on both occasions (to Sweden in 2002, and to the USA in 2010). Both of those 'weak winners' were eliminated in the Round of 16.

Never has the next tie-breaking criteria been needed to determine the group winner, which prior to this tournament was a drawing of lots. This year of course, as every Japan, Senegal, Belgium and England fan now knows, there's a new criteria inserted before the drawing of lots, which is that of 'fair play points'. 

While Group H ultimately didn't need this new tie-breaker to determine the winner, Group G may well do. History was made in that the new tie-breaker saw Japan progress as runners-up at Senegal's expense of course. 

As Vasu Shan pointed out in response to my previous post:

Indeed, and this group is not a 'generally-speaking' scenario.

A semi-final appearance with Colombia followed by either Sweden or Switzerland in the way sounds a lot more attractive than one blocked by (probably) Brazil. 

Same for Belgium of course so it's no surprise that the favourite Correct Score is 0:0 at 7.9, and the draw is a rare sub 3.0 price. With the farcical possibility of both teams looking to pick up disciplinary points and conceding penalties (intentionally missed) perhaps, theses markets should be a consideration. Trent Alexander-Arnold coming on with the sole purpose of picking up a Red Card?

Winners Take It All

Of the the last 16 World Cup group winners from the 2010 and 2014 tournaments, only one (the USA in 2010) has failed to win their Round of 16 match. 

Since the tournament expanded to 32 teams in 1998, the record of group winners and runners up is:


I think what Pinnacle meant to say was that of the last 40 group winners, 31 reached the Quarter-Finals. 

The above table breaks down the elimination round for group winners and runners-up, so for example of the 14 group winners advancing with 9 points, seven made it to the semi-finals, while just one was eliminated in the Round of 16 (Spain in 2006). 

Of the nine group runners-up that survived the Round of 16, six were eliminated in the Quarter-Finals, while two finished third and one (France 2006) lost in the final. Three semi-finalists out of a possible twenty is surprisingly poor although it's a small sample size. 

It's also no help to be an unbeaten runner-up, with 12 of the 15 eliminated in the Round of 16. 

Five of the 31 Round of 16 losses by runners-up were on penalties, with only one group winner (Switzerland in 2006) eliminated by the same method.

Do England really want to finish runners-up today?

Tuesday, 26 June 2018

World Cup Group Winners

A very confusing tweet from Pinnacle this morning:

I checked my records, and in fact all 40 group winners since 1998 progressed, or will progress, to the Round of 16.

Not only that, but all 40 group runners-up also progressed, or will progress, to the Round of 16.

It's how the competition works. 

Not mentioned, but also a fact, is that the last World Cup winners who failed to win their group, and in fact didn't win a group match, was Italy back in 1982.

Somewhat related is the question of whether knowing which teams are already through to the Round of 16, and which side of the bracket those teams are, will influence England and Belgium's approach to the game. Going last and knowing where the sides sit is an advantage. What should be a good game may well become a farce with squad members playing to get cards! 

Perhaps the Winner A v Runner-up B format should be changed so that best group record plays worst group record. So in 2014, Netherlands would have played Greece, while in the bottom half of the bracket, Colombia would have played Nigeria. And Argentina and Germany would not have met in the final. It would encourage teams to take all three games seriously.

Monday, 25 June 2018

League One Draw

League One is probably the league I look at least. The top leagues are all interesting because they are top leagues. The Championship gets my attention because it's one step from the top and has some fairly big teams in it. My interest in league Two is mostly to see which established league club is about to lose its league place, while the National League is interesting or the opposite reason. Which small town team is headed into the league and will they have a unique surname. Wood or Moors perhaps for next season. And lost in all this is League One with its disrupting churn rate of 29%, and a mix of former Premier League clubs (seven next season), small town teams and not too many derbies - one London derby next season, and of course the world famous Dockyard Derby.

League One is another league where backing every draw is the worst 'blind' strategy on all outcomes. 
Uniquely, at least so far, this is the only league where backing the Draw when it has a 'true' win probability of 0.2 or less is positive, although 63 selections from six seasons isn't a big sample. Backing the Draw when it has a higher win probability is also positive, so the area to avoid is in the middle. Avoiding Draws when the win probability is between .26 and .295, and you save 201.6 points.

The difference is also interesting, although the results are the exact opposite of what one might expect. Matches where one team has a win probability of 60%  or more greater than the other is profitable is up 74.14 points from 807 bets, ROI +9.2%

The six London derbies, two Dockland Derbies and the four Fylde Coast Derbies were all profitable by a total of 8.40 points for what it's worth, which is nothing, but this league might be worth looking at further. It seems to be one where the previously mentioned churn results in the market not being accurate. Backing the Draw when one of the teams is odds-on is usually a loser, but here would make you 58.79 points, ROI 5.6%.

One final observation is that backing the Draw in the longest serving league member's matches is up 48.47 points over the six years. 

Next up : League Two

Sunday, 24 June 2018

Serie A Draw

For the second consecutive review, we lose a couple of matches due to the absence of any Pinnacle Closing Odds, which may seem strange for a top league, but is explained by Liam Brady's quote:

"When a draw suits both teams in Italy, the game will end in a draw. It's all to do with the mentality of the Italian people. They see nothing wrong in such an arrangement."
So we have just 2,278 matches in our six year sample and, no big surprise here, not a good idea to blindly back the Draw: 
Once again, ignoring matches where the Draw has a 'true' probability of 0.2 or less, saves you a lot of points, in this case 78.7 points. Ignore matches where the Home or Away team is odds on and save yourself 77.37 and 34.73 points respectively.
Backing the Draw in 'close' matches up to the 25% difference are profitable with an ROI of 2.56%. If you back the Draw only when it is greater than an implied .33 probability, the ROI is over 3%

As with the Bundesliga, one team has dominated Serie A for the past six seasons, with Juventus winning the title every year, with Napoli and AS Roma taking 2nd and 3rd places in all but two seasons. Lazio grabbed 3rd in 2015 and AC Milan in 2013. 

As with ignoring Bayern Munich in the Bundesliga, so ignoring Juventus in Serie A helps, saving 92.61 points. Exclude AS Roma and Napoli and the loss is reduced even more. 

Italy has rather a lot of top level 'derbies'. Probably the best known derby is the Derby della Madonnina where backing the Draw is +7.99 from the twelve games since 2012-13.  

The dozen Derby d'Italia matches show a profit of 2.5 points, while the Derby della Mole shows a loss of 7.29 points. As I said earlier, ignore Juventus.  

The Derby della Lanterna is also a loser, down 2.34 points from 12 matches. while the the Derby della Capitale is up 1.42 points from 12.

With the return to Serie A next season of Parma, after three successive promotions - a first in Italian football - the Derby dell'Emilia will be back, a derby that shows an ROI of 80.75%, but sadly from just 4 matches!

The Derby del Sole is -8.08 points (I did say to ignore these two teams), while the Derby dell'Appennino is -6.6 points from 10 matches. 

Up 6.6 points from 8 matches is the Derby delle Due Sicilie while the Derby delle Isole is also up, by 0.85 points from 6 matches. The Derby di Sicilia was only played in one season, but was profitable +1.16 points. 

I think that's enough on derbies.

Next up: League One

Saturday, 23 June 2018

National Draw

The title suggests this might one of England's more famous horse races, but it's actually the next installment of on the rather more interesting topic of the Draw.

England's 5th level National League is another lower league with 24 clubs, and a 25% churn rate each season.


Here's a look at the numbers from the six seasons 2012-18. Note that there should have been 3,312 matches, but Pinnacle's Closing Prices were not available for 15 matches, so we have a sample size of a mere 3,297. I think we'll survive, but the National League isn't a happy hunting ground for Draw seekers.

But there is hope. Ignore the Draw when it has a 'true' win probability of less than 0.25 and 154.64 points are saved. 

The closest matches in terms of win probability difference (25% or closer) are also profitable, and 3.36% is to my mind a decent return for a basic strategy:

Obviously in a lower league, there is no Big X factor, and there's not much of a derby factor either. Not too many London clubs at this level previously, and the 18 derby matches over the past six years would have lost 10.88 points. There will be five teams from London next season, but there have been more clubs from Lancashire during this period and these combine for 47 matches (one or more must be among the no-data games) and a profit of 0.9 points. Add in the close regional teams Barrow, Chester and Wrexham and the 171 matches generates 2.3 points. There will be just two Lancashire teams next season. Nothing to see here. 

Next up: Italy


Bundesliga Draw

With 18 clubs, the Bundesliga has fewer clubs than any other league I've looked at so far, and the league with the most dominant club. 

Bayern Munich have won the league all six seasons by a combined 100 points with the narrowest win being by 10 points and if they are excluded from any Draw bets, a strategy of backing the Draw in every game becomes a profitable venture.

The loss on all games is 33.92 points, an ROI of -1.8%. Once again, the simple rule of ignoring the draw when it's priced at 5.0 or more saves 37.43 points. 

When we look at the difference in percentage terms, there's a decent ROI when the difference is 10% or less which is 13.25% and ignoring draws in the bottom third of the differences (67%-99%) range would save 47.91 points. 

When it domes to 'derby games', I looked at the North Rhine-Westphalia state which six recent or current Bundesliga teams come from. With five teams next season, this state has the most in the Bundesliga. 

Games between those six clubs, and for those of you who flunked Geography in school they are Schalke '04, Borussia Dortmund (these two contest the Revierderby), Fortuna Düsseldorf, Bayer '04 Leverkusen, Borussia Mönchengladbach and Köln, (the last two play in the Rheinland Derby).

The 118 matches between these clubs have returned 31.16 points, ROI 26.4%

Only four clubs (Bayern Munich, Borussia Dortmund, Schalke '04 and Borussia Mönchengladbach) have finished in the top half of the Bundesliga for the past six seasons, and matches between them have an ROI of 22.4%. Of course three of those clubs feature in the regional derby games, but including Bayern Munich with this trio adds 15.08 points to the pot. 

Next up: National League

Thursday, 21 June 2018

Le Championnat Draw

At the risk of being accused of quantophrenia, here are some more Draw related numbers, this time from France's Ligue 1. Again, the period under review is the six seasons 2012-18, and the prices used are Pinnacle's Closing Odds courtesy of Joseph Buchdahl's Football-Data.co.uk site.

Backing the draw blindly in this league is a terrible idea, costing 109.12 points and a negative ROI while blindly laying the draw is actually profitable as shown above. Eliminating Draws with an implied probability less than 0.25 would save you 94.78 of those points, and it doesn't pay to blindly back the draw when the true price is below 3.6. Another 61.91 points can be saved by skipping these.

Using the 'difference' between the win probabilities, backing the draw in matches in the 25% or less category, i.e. the closest matches, results in a small profit of 2.09 points from 492 matches, ROI 0.42%.

When it comes to Big 6 matches (Bordeaux, Paris Saint-Germain, AS Monaco, Olympique Lyonnais, Olympique de Marseille and St Etienne), as with the EPL, backing the Draw in these matches is profitable, up 44.89 points from 170 games, ROI of 26.4%

As a top league with no promotion, the Big 6 concept comes into play again.

The Big 6 in France is debatable, (Nice / Bordeaux?), and certainly not as strong as the EPL's, and a Big 6 game doesn't preclude a short price on one of the teams. While the shortest (adjusted) price for an EPL Big 6 game is 1.4 - Liverpool v Tottenham Hotspur 30th March 2014 - the dominance of Paris Saint-Germain means that 22 such games saw this price matched or beaten with the shortest price 1.09. Ignore matches with red hot home teams and the profits and ROI increase.

Next up: Germany 

Wednesday, 20 June 2018

Championship Draw

I wasn't sure which league to look at next regarding the Draw, but decided on the Championship before seeing this request from John:

Obviously there is no Big 6 factor in a league with promotion positions, but it seems to me that these matches have in many ways replaced the traditional 'big' games for clubs which were (usually) local derbies. 

The Championship is also a league where 25% of the teams are replaced each season, which results in less predictability.

So how do the EPL strategies for backing the Draw hold up in the English Championship? 

Going into this exercise, my thoughts were that mainly because of the turnover of clubs, the 'differences' would generally be lower. 

In the Premier League only 30% of the matches are between teams with win probabilities within 40% of each other, i.e could be considered close contests.

Contrast this with the Championship where the number of such matches is 49%. 

While closer matches means more draws, it doesn't necessarily mean greater profits, or lesser losses.

To the numbers, and backing the Draw blindly in the Championship over the past six seasons (3312 matches) would have cost you 45.12 points, an ROI of -1.36% which is a better return, though still negative, than that in the Premier League.

For games where the difference is 25% or less, the profit is 23.14 points, ROI 2.3%, which is a lot lower than the same parameter produces in the Premier League. The raw difference is a little more interesting, especially where the home team is favoured, but not by much. Where the win probabilities are the same or the home team is favoured by up to 0.25, the profit is 99.68 points, a 6.9% ROI. (For the EPL, the ROI here is 9.0%). 

Backing the Draw when the Home team has an implied probability greater then 0.5 (2.0) would have lost you 25.50 points, while backing the Draw when the implied probability is greater than 0.27 would have lost you 106.81 points. As with the EPL, lots of easy ways to shed the losers. 

So in place of the inapplicable Big 6 / Little 14 matches, I'm sure some of you are wondering how derbies play out. 
Next up: France

Tuesday, 19 June 2018

Probability, Difference And The EPL Draw (2)

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

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

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

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

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

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

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

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

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

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

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

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

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

Sunday, 17 June 2018

Tesla

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

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

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

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

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

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

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

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

Specificity and Equity

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Monday, 11 June 2018

Hoops, Skates and Rounders

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

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

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

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

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

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

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

Wisdom of Mel

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

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


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

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

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

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

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

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

Except when the day starts with three losses...

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

Why are we needing to top up an account? 

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

No comment, but it sounds very scientific.

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

Later...

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

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

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


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

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

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

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

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

It is not scientific in any way. 

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

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

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

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

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

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

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