The Accidental Winner

You know it's your lucky day when you expect a team to win by two, cover the Any Unquoted, and your selection loses 2-4!

Not the way I like to win my bets, but I'll take it. At least it proved my point in my earlier post that backing teams such as Chelsea to win at home at short prices isn't a long-term winning strategy.

Alex asked:

"With regards to hitting 43% of 2 goal margins, does this include the times when AU comes into play without it being the exact margin?"

- No, the 43% figure is those games that resulted in an exact margin of 2 goals. Including the AUs, the percentage becomes 55%, but that includes today's shameful 'win'.

The Anonymous suggestion that "What you should do is post up all your past forecasts, the odds available, the results and your net winnings. That would show that your selections are showing value" is a non-starter. I have over 1200 matches in my spreadsheet, and while that may not be enormously large from a statistical anaysis perspective, it's enormously large from a time consuming point of view!

I don't even have time to publish all of the ratings for a busy Saturday - far too busy putting the bets on and making money!

Missing The Point

A good night last night, with Schalke 04 spotting Borussia Dortmund a penalty early in the second half, but recovering to win by the predicted one goal margin(2-1).

In the League One game at Southend United, Charlton scored an injury time winner to take away a win on the predicted draw. If there is a time to lay-off in play, then it is in situations such as these.

And now to the main theme of this post - is it just me, or are some people missing the point of the Elo ratings out there?

Anonymous, (and without fail, these negative comments are always ‘anonymous’), comments:

“What is the point in these 'ratings'? In over 80% of matches the winning margin is two goals or fewer. So you will be right most of the time even if you say those things at random.”

Well, my friend, the point of these ratings is to find value and make some money. I rather thought that most people would have grasped that concept by now.

Agreed that in most matches “the winning margin is two goals or fewer”, but your statement is very misleading.

Of course I would be right most of the time if my predictions stated “Aston Villa will beat Burnley by 2 goals or less, or it could be a draw, or Burnley might win, but not my more than 2 goals” but I don’t.

Not only do my predictions sometimes call for 3 or 4 goal wins, but I am also not just naming a winning margin. I name the winning team, which means that in “80% of games”, there are five possible targets to hit, not just three.

As for the suggestion that random guesses would result in ‘being right most of the time’, that’s quite possibly one of the most stupid comments I’ve had on this blog, and that’s saying something. I challenge you or anyone else to forecast the final margin and “be right most of the time”. It’s impossible. Do the maths.

Before you start, there’s the 20% of matches that will be wrong because they fall outside of the 2 goals or less margin. Then of the remaining 80%, you have five outcomes (+2, +1, 0, -1, -2) and thus a purely random guess would hit just 16% of the time. You could eliminate predicting Away wins and be right more often, but you are losing the 25% of matches that end in Away wins and your ‘random’ wins are highly unlikely to return the average of 3.75 that you would need to be profitable.

Besides, the aim isn’t to be right ‘most’ of the time. The aim is to find value, i.e. to be right more often than the implied probability of the odds suggests.

Anonymous is also making the novice’s mistake of assuming that a high number of winners is more important than the quality (i.e. price) of the winners. It isn’t. Quality over quantity.

To illustrate the point, if you back Real Madrid, Barcelona, AS Roma, Chelsea and Mallorca to win at home, you’ll get a lot of winners (55 from 60 matches this season), but at short prices (except for Mallorca, but that’s my secret) which are unlikely to continue to be value long-term.

Alternatively, you back a team to win by 2 in the Correct Score markets. If the ratings are good, then you will have value. You won’t win every time, but your wins when they do come will more than make up for the losses.

At the moment these selections win by the expected 2 goals 43% of the time. With the 2-0 paying approximately 7.6, 3-1 approximately 14.5 and Any Unquoted 6.6, it should be obvious that I am finding great value on these, at least for now.

Backing the draw in the EPL is excellent too right now. A 47% strike rate compared to an average price for these at 3.45 (29%) shows that I am getting huge value.

There are also the Asian Handicap markets which might be a good place to use the margin of victory information. I’m still new to these, and don’t find the liquidity on the exchanges here too great, but presumable somewhere there are low over-round markets available.

One of the problems with this style of betting is that you won’t, and shouldn’t expect to, win every time.

In the Premier League, 31.28% of the time I get the winner spot on. I think that’s quite good, even though on a full weekend I can only expect to get three matches exactly right, and statistically I am likely to miss all 10 matches from time to time, but it’s the big picture we need to focus on, not one day, one week or one month.

What’s the point? Anonymous may be missing it, but hopefully the sharper minds out there at least find the idea interesting even if just watching from the sidelines.

I’m adding a poll to get an idea of opinions out there. Speak now, or forever hold your peace. Oh, and good luck with the football today.

Girls In Kitchen

Schalke 04 to beat rivals Borussia Dortmund by 1 tonight in the Bundesliga, with the Southend United v Charlton Athletic game expected to be a draw.

Unfortunately for me, Southend’s price is close to the draw price, and most unprofessionally, I have accidentally backed Southend! I know the outcome here – I lay the bet back and Southend go on to win with a late goal.

In the Premier League this weekend, I have three teams expected to win by 2 goals; Birmingham City v Wigan Athletic, Chelsea v Manchester City and Liverpool v Blackburn Rovers. The Elo two goal favourites in the Premier League win by two 43% of the time.

Burnley should win by 1 at home to Portsmouth, with draws at Bolton Wanderers, Sunderland and Tottenham Hotspur. Draws are currently hitting at no less than 47%.

The sole away win is predicted to be Arsenal at Stoke City.

The Old Firm game sees Rangers favoured by 2.

Have I considered using my ratings for trading? Well yes, but I’ve decided against it. While it’s nice to get a goal up and lock in some green, I do feel that I should let the bet run unless I have good reason to think that the lay price is value. The luck tends to even itself out here, and I’m not kidding myself in thinking that I can find value in-play in a football match which is being actively traded by thousands of people. At least pre-game, I’m in with a fair chance.

Home Straight

In my previous post, I did rather mock the idea that value could be found in so many of the possible results of a football match, but I admit that I was rather looking at this from a punting rather than a trading perspective.

Although I still have my doubts about the viability of this approach, I can’t say that I have studied the price movements once a game is in-play in this market too closely, but the idea of trading certain scores certainly has some merit. My problem is that in-play football betting unfortunately just doesn’t work for me. As much as I enjoy football, far too many people are able to identify value better than I am.

It would be a boring world if we all had the same approach to skinning the cat, and if The Dark Horse can continue finding success with this strategy, then that is excellent.

As I wrote a few weeks ago, the sheer number of possible outcomes is a little overwhelming to my simple mind, thus my approach to this market has pretty much been limited to a pre-game punt on the two or three goal margins, so far profitably.

Back to the topic of in-play football betting, and I’ve really drifted away from it this season. My fingers were burned once too often, and with so many people taking an interest in the sport, I finally had to admit that if I was to find an edge in football, it wasn’t going to be found in-play.

That’s the reason why I invested my time on developing the spreadsheet and the pre-game predictions. It’s a much less stressful way of investing on football, and so far, more profitable.

Still some work to do, but I enjoy it. This season really seems to have flown by. (I’m told that as you get older, time speeds up). Just as we’re getting warmed up, and suddenly the end is in sight. Hopefully for some clubs, not literally, but my own Crystal Palace certainly have a bleak future, with a relegation fight on their hands while trying to find a buyer, and Portsmouth look certain to be playing at least one level lower next season, if they are playing at all. When Aldershot folded back in 1992, not too much attention was paid, but Crystal Palace, and to a lesser extent Portsmouth, are two rather more esteemed clubs than Aldershot ever were.

Spreading Too Thin

Hopefully you all followed my Elo predictions over the past couple of days. A one goal win for Valencia over Getafe yesterday as predicted was followed by a bullseye in the Manchester United v West Ham United game paying off on the Correct Score market market at 8.6, although I covered the Any Unquoted also since this was expected to be a 3 goal winner and I wanted 4 goals on my side.

For the four teams expected to win by 2 today, I backed the 2-0, 3-1 and Any Unquoted prices, and the net result after bullseyes at Leeds United and Swindon Town? A massive 4.25%. The problem is that 2-0 at Leeds was just 7.0, and the Any Unqoted at Swindon was just 5.8. Why they couldn't be happy with a 3-1 win I don't know! Still, 4.25% is a decent return by most standards.

Given that value on any one bet is hard to find, never mind two or three, it goes against the grain somewhat to cover up to three outcomes in the Correct Score market. Knowing that at least two bets will lose just doesn't feel right.

Mind you, some punters have no qualms about covering no less than 7 of the 17 outcomes in five different bets! (See above). How there can be overall value in that approach beats me.

For sure, you'll hit a lot of winners, but they have to carry so many losers that long term, it's a losing strategy.

So tomorrow, and Crystal Palace face the prospect of going down by 3 at Aston Villa. Tottenham Hotspur will beat Bolton Wanderers by 2, and West Bromwich Albion will beat Reading by just 1. Cup games though, so beware.

In the Champions League, I have Chelsea by 1 at Internazionale, and draws at Fiorentina and Udinese in Serie A.

Time Value

“Today Capital One Direct Banking released the findings of a new survey that delved into the relationship that Americans have with money. While the survey explored topics ranging from how savvy Americans are at saving to how honest they might be during these hard economic times, one thing's clear – everyone could use a little more money in the bank. In fact, 25 percent of respondents who are employed full or part time would work every day of the year if it meant doubling their monthly income. What's more, 35 percent of respondents would agree to work on holidays and nearly one out of five (19 percent) would agree to give up all of their vacation days to receive twice their monthly salary.”

I have long viewed my trading / sports investing activity as a second job. My spreadsheet shows that since my ‘eureka’ moment in early 2006, it’s a rare day that I haven’t been signed on to one or more of the exchange websites. Using a conservative average of 3 hours per day, over the past four years, that comes to over 4,000 hours. That is a lot of time. Not all that time is spent exclusively investing of course. Much of it is spent in research, which can be done while watching and waiting for in-play value opportunities, but it is still a significant amount of time.

The income obviously makes it worth my while doing, or I wouldn’t do it. I’m aware that studies have found that people who are “time affluent” are happier than those who are “financially affluent”, but for me there’s a ‘make hay while the sun shines’ feeling about the exchanges. There’s the feeling that I need to make some short-term sacrifices in order to achieve longer-term goals, but what sacrifices do I really make?

I don’t watch so much (non-sport) TV. No real loss there. I don’t go out so often, but that has financial and health benefits in itself. I'm also lucky to be with someone who prefers relaxing at home over wild nights out on the town.

As for making hay, it’s not that I feel the exchanges will go away – that genie is out of the bottle, and they are here to stay, - but the edge that we all need to make it worthwhile may not always be there. At some point in the future, I fully expect the markets to mature to the point where finding an edge is that much harder, and once profits decline to a certain level, then the time becomes more valuable than the money.

At that point, I shall move on from the exchanges, and do something else with my time, although the suggestion that “time affluent” people spend their time enjoying “personal spiritual growth” or “volunteering” fills me with horror.

“Volunteer work?” I wouldn’t do it if you paid me! (Tommy Cooper).

“Spiritual growth”, well, that must be a girl thing. (Cassini).

It’s more likely that I’ll travel or write the best-seller that, like everyone, I have somewhere inside me. “Look, you’re English, tone it down a bit” (Eddie Izzard) – I’ll travel – although maybe finishing off visiting all 92 football league grounds isn’t what the future Mrs. Cassini has in mind.

Bullseye

A very good day today, not perfect, but a high percentage of winners across all leagues.

Calling my spot-on predictions 'bullseyes' and non-spot-on winners 'outers' (from the world of darts), the ratings had bullseyes with the games at Malaga, Fiorentina, Siena, Marseille, Werder Bremen, Fulham and Manchester City.

'Outers' were the wins for Aston Villa, Blackburn Rovers, Tottenham Hotspur, Hearts, Athletic Bilbao, Cagliari, Palermo, Roma and Real Madrid.

Misses everywhere else, but only one game with a winner predicted would have resulted in a loss from laying the opponent - that game being at Atalanta who lost to Chievo.

The Premier League was again the 'League of the Day' with two bulleyes, and three outers from 5 matches.

In response to a comment about the sample size, currently the total number of matches rated is a little over 2,000.

Tomorrow sees Rotherham expected to beat Shrewsbury Town by 1, and Valencia should win by the same margin at home to Getafe.

Tuesday's expectations are Barcelona by 1 in Stuttgart, and Manchester United by 3 over West Ham United in the Premier League. 3-0 is 8.8 and Any Unquoted is 4.0.

Home Advantage

Close to home, not a bad day yesterday until I left Dover behind me and expanded the Elo ratings into Europe.

After being spot on in 6 of 10 French games last week with no money involved, so far this weekend they are 0 from 6.

In Spain, Barcelona did win on the Any Unquoted, and Deportivo won, but Mallorca fell at home to Sevilla which was costly.

In Italy, just two games, with Internazionale expected to win by 2 losing two players in the fist half and holding out for a draw. These things happen I suppose. Genoa did at least win comfortably at 1.96 and were also one of Football Elite's Recommended Bets along with Mallorca.

This service has had a strong couple of weekends, with five consecutive Recommended Bet winners before Mallorca's loss yesterday.

Standout bets for today appear to be Blackburn Rovers at 2.04, Fulham at 2.14, Malaga at 2.24, Atalanta at 2.22 and Palermo at 2.02. All should win by one goal.

Away from home, Tottenham Hotspur should win by 1 at Wigan Athletic, but the record of away teams favoured by 1 is very poor and the value is in laying Spurs at 2.12.

Draws at Manchester City (v Liverpool) and Bristol City (v West Bromwich Albion).

Expected to win by 2 are Aston Villa, Real Madrid, Roma and Marseille.

It's interesting how the leagues vary. I'm not talking about differences between the Premier League and the Scottish Third Division, those would be understandable, but why are there such big differences between say the percentage of draws hit in the Premier League (44%) and Ligue 1 (22%)?

One goal home win predictions hit at 61% in the Premier League but only 43% in Germany.

One goal away wins in the Premier League? 21%. Italy? 58.3%!

Since the stats are only a few months old, it's probably too soon to draw any firm conclusions, but some of the differences are quite staggering.

Staying True

I just noticed that the last post was the 500th I have posted on here. Had I known, I might have made the effort to be a little more business like, but as you may have noticed, I'm a little bit different. There's always room for a little humour in life.

Not feeling too much like laughing right now though. As I posted earlier, my Elo ratings in the early game today predicted a one goal win for Manchester United. Then I get the Short List bets from Football Elite who tip Everton at 5.0. I decided to sit the game out knowing that if I backed both, the draw would come in, but by doing so missed out on a great priced winner.

A little happier about the results at Arsenal (v Sunderland) and Wolverhampton Wanderers where Arsenal and Chelsea both won by the expected two goal margin to continue some nice winners in the Correct Score markets for these 2 goal teams. West Ham United also won, but by 3 and not 1 over Hull City.

Reluctantly, in Germany, I am opposing my selections given that the form there seems to be unreliable. Today saw a lay of Borussia Dortmund lose as they ran out 4-1 winners (expectancy was 2), but every other prediction was happily wrong with winning lays as follows:

The draw at Cologne 3.45 (L 1-5, and typical of the wild results this league throws up)
Hamburg 1.57 (expected to win by 2, drew 0-0)
Mainz 2.1 (expected to win by 1, drew 0-0)
Bayern Munich 1.4 (expected to win by 1, drew 1-1).

More later - lots of football to keep an eye an, but a quick mention of how quickly fortunes can change in the game of trading. Three nights ago I had my biggest loss in three months when a value lay of the Utah Jazz didn't pan out and I lost well over four figures. As often still seems to happen, the following night saw some poor decisions and another, but smaller loss, as the Boston Celtics won by 1 point over the Los Angeles Lakers, and just as confidence was waning and I was facing the prospect of NOT paying any Premium Charge next week, along comes a huge sum of money last night wanting to back the Denver Nuggets at 1.6 while they are tied in the fourth quarter at a visibly strong and confident looking Washington Wizards. (Body language can be most illuminating at times). Those are the bets I will take all day, and in a moment, well - a few tension filled minutes, the losses of two nights, and a little more, were erased with my biggest profit since October.

Mind you, with my big win from the Microsoft Lottery coming any day, I should probably be a little more relaxed about the occasional big loss.

Now for some draws in France, except in Boulogne!

Ski Jumping Winner - A Hard One

The Winter Olympics isn’t an event I care too much for, although some events are more exciting than others, but while I was looking at the contenders for the Large Hill Individual Ski Jumping Gold Medal today, I couldn’t resist going for A. Wank.

The unfortunately named competitor (commentator’s nightmare Andreas Wank from Germany) probably won’t win, with the Swiss Simon Ammann providing stiff opposition as the odds-on favourite, but how often is it that you get the chance to tell friends and family with a straight face that you were watching ski jumping, and went for A. Wank, ultimately coming up short due to a lack of length and poor style?

Rather like this childish post really.

European Debut

A small profit on the day, with Bury winning by the one goal, and perhaps slightly unlucky we didn't make more. Torquay snatched a late draw at Rotherham scoring in the 85' taking away a winner.

In Germany, Moechengladbach were given a penalty for a handball outside the area, that enabled them to snatch a 2-2 draw. Was this good or bad? I posted that the expectation was a 1 goal home win, but with these selections winning at just 44%, the value when the price is 1.94 is clearly in laying but until I have more data, it's tough to bring myself to back against a system that performs well elsewhere.

Talkbet has stats which go back longer than mine, and he backs up my observation that form is less reliable in the Bundesliga than in other leagues. Perhaps I don't need to understand why this is, but just accept it, and use the predictions in a different way. Back the underdog!

A busy day tomorrow, the first since catching up with the European League ratings, and the top teams expected to win by 2 are Borussia Dortmund (1.47), Hamburg (1.57), Deportivo La Coruna (1.56), Barcelona (1.21) and Internazionale (1.56). These selections win at 66% overall, so anything around 1.5 is value, although obviously there are those teams such as Barcelona which are hardly typical.

Some other observations are Genoa (1.96), Boulogne (2.56) and Mallorca (2.6) all favoured to win by 1, and plenty of draws in France with this result expected in the matches at Grenoble, Lens, Nice, Saint Etienne and Paris St Germain.

Boulogne and Mallorca both look excellent value.

Waiting For The Cheque

There seems to be a short delay in the processing of my prize. Not sure why - I have provided my bank account details along with my National Insurance number, passwords, PINs, date of birth, mother's maiden name, favourite TV show, first make and model of car I owned and other information requested, so I'm sure it's just an administrative glitch. Pity really - I was really hoping to have the cash by the weekend, but it's looking like I shall have to wait until Monday now.

I obviously quit my job this morning, my goal of calling in rich finally realised, and have spend the day so far idling away on the Internet. Amazing the stuff that's out there. Some jealous fool has gone so far as to create a web page (see above) trying to fool life's winners, people like me, into thinking that their wins are hoaxes. I find that attitude quite sad and pathetic.

Not that I needed to, but I did actually finish off the Bundesliga ratings yesterday. The results weren't that great overall - of the big leagues, Germany was the worst for some reason hitting at an overall rate of 23.23%. It seems to be a league where anything can happen, and often does.

However, predicted draws in this league are actually hitting at a better than expected 35.38%, second only to the Premier League and its stellar 45.24%.

Tonights predicted results are all one goal wins - Hoffenheim, Bury and Rotherham with Bury being the best value at 2.09.

For tomorrow in the Premier League, Portsmouth v Stoke is predicted a draw, with two goal wins for Arsenal (v sunderland) and Chelsea (@ Wolves). One goal wins for Manchester United (@ Everton) and West Ham (v Hull City).

Biggest Winner? Me. Goodbye Losers

When I started this blog, my stated goal was to win £500k on the exchanges and retire.

Thanks to a completely unexpected and truly wonderful e-mail that I received today, (see below) my funds will very shortly be boosted by another £700k so who cares about the exchanges any more? Not me mateys!

With my goal thus reached, I bid you all farewell with my best wishes for the future.

Thanks, and good luck.

Cassini

From: Microsoft Promotion
Sent: Thu, 18 Feb 2010 14:20
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Staying The Course

I was reminded of the above while I was catching up with the major European leagues over the past few days. (I decided to forfeit my blogging time and focus on something that might actually make me some money).

As I entered the results week by week, it was impossible not to look at them without imaging the possible returns had I been 'live' at the time. When an above average week comes along, there's that pang of regret that I didn't start this earlier, but then the dry week comes along and there's that sigh of relief that I hadn't!

Although the study in the quote above applies to horse racing systems, what I am doing isn't that far removed, and I suppose the point I am trying to make is that systems need time. It is only with the benefit of a longer time-frame that you really know what you have, or don't have. As Churchill said "The longer you can look back, the farther you can look forward”

My worst week for exact predictions in any league is, perhaps not surprisingly, zero although the good news is that this nadir has only been hit once (September, in Spain). On the zenith side, the best, or should I say le magnifiquest week, was in France when 6 of 10 matches were spot on.

Overall though, the winners across Italy, Spain and France (I haven't finished Germany yet) are remarkly consistent at 26.58%, 26.15% and 27.31% respectively so 3 winners in any one league is good. The Premier League by contrast hits at 29.44%.

The ratings had their first test yesterday with Manchester United predicted to win by 1 goal in Milan. As most readers will know, they did just that by the most profitable 1 goal margin, but Real Madrid should also have won, but didn't.

Germany should be completed in the next couple of days, and then we can have a 'live' weekend.

Cup Runneth Over

I don't actually put any money on Cup games, and I don't recommend anyone else does, but I do use Cup results to move points between teams and often divisions. With the other games today already starting, this is just for fits and giggles, but Chelsea's 3 goal defeat of Cardiff City was spot on. Southampton should have held on for a draw, as should Reading who are a goal up as I write this. Fulham should also win by 3, with other winners expected in Birmingham City, Manchester City, Tottenham Hotspur and Aston Villa.

Serie A are also up to date, sadly not quite in time for AC Milan's 3-2 win over Udinese which would have been predicted at a 1 goal win for AC. Compared to the Premier League, the draw predictions are much poorer with just 25% hitting, but the away predictions are much better at 58%, with 29% by the predicted margin compared with the EPL with 33% and 14% respectively.

Today's Forecasts: AS Roma by 1 v Palermo and a draw for Sampdoria v Fiorentina.

La Liga has begun, and the race is on to finish these and the Bundesliga and Ligue 1 results before Tuesday when the Champions League resumes and the ratings can be tested at that level.

Taking A Cut

In stock market trading, one school of thought is that the best defence against a declining position is to have a hard and fast sell rule. I was reading on the Yahoo Finance page today:

Even if you feel sure that your sliding stock will eventually rebound, admit two things. First, the market's direction cannot be predicted; second, you could be wrong about the stock.

Those two facts are why the safest route is to sell any stock that falls 7% or 8% from your purchase price. Follow this rule without exception and in any market condition.

If you sell to cut your losses short and the stock does rebound, you can jump back into it when a new buying area forms. The important part is that your capital lives to fight another day.

Rather than wring your hands and hope for your stock to recover, raise cash and search for leading stocks as they break out of proper bases.

Keep in mind that the larger your loss, the more the stock has to work to erase its loss.

A drop of 25% requires a gain of 33% to break even. If you hang in for a 50% loss, your stock must turn and rise 100%. But if you pull the rip cord at 7%, you only need to make 7.5% on your next investment to rebuild your initial capital.

While this strategy might be more useful in the slower moving longer-term sports markets, it is still of value in the typical short-term individual match markets.

Probably the hardest lesson for a trader to learn is the importance of cutting losses short, but it is essential that this lesson is learned. Preserve that capital, and you live to fight another day. Let the loss run, and your investment becomes a gamble. Your capital is at risk of serious damage.

I used to hate it when I would have to go red all over, especially if the market reversed and my original position became profitable, but now I accept it as part of the game. It’s the right thing to do, I tell myself.

Although most of us are better able to predict the market direction in a sports market than the stock market, not one of us will be right all the time. The trick is to be right more often than the odds suggest, in other words, to find value.

Gold All Over

A couple more questions made their way across the wires to me today.

Anonymous said:

“Just wondered why you don’t put up the Scottish predictions in advance?”

A: I do sometimes. As I wrote on Tuesday “Right now I tend to just give the Premier League forecasts, since those are the games that have the highest profiles, and the most liquidity. When there's nothing at the top level, I sometimes dip down into the lower leagues, even as far down as Annan Athletic on occasion, and pick out a few that I think might be of interest.”

I’m not sure that too many people are interested beyond the Premier League to be honest, and when there are a whole slew of matches, it’s quite a lot of work to list them all. Agreed that on days like yesterday, there weren’t too many to list, but on Tuesday there were some 37 league games in England and Scotland, and on a Saturday there’s many more.

Dubaitrader had “a couple of questions, if you don't mind me asking”, not at all – go ahead...

Firstly, how do find Football Elite? Their website seems ok and fair ROI over the years.

A: I found them by entering http://www.football-elite.co.uk/ into my browser…

Seriously, Football Elite have boosted my balance in the three months that I have been with them, but not by a huge amount. Their Recommended Bets are actually slightly down, rather unluckily in my opinion as an unusually high number of games have finished drawn. Certainly a strategy of laying the team they are opposing would have reaped rich rewards, as would backing the Under 2.5 goals. Of 37 selections, 14 won, 4 lost, and 19 drew. Just 9 were Over 2.5.

The profit for me has come from their Short List selections, those that came close to ‘Recommended’ status, but fell short. These have fared well and are in profit for me. The record here is 48 selections, 20 winners, 10 losses and 18 draws. Here the Under – Over split is less remarkable at 28:20.

Matt’s selections are almost always at evens or better, and although three months is too short a period to really pass a valid judgment, I have no reason to doubt his figures over the past 3 or 4 years and I do believe that by being as selective as he is, he has found that all important edge.

Secondly, without giving your major secret away, what is your main basis for your ratings? Any info would be appreciated.

and tied in with this is a question from Costas

The ratings are from the ELO rating formula(right?),what i want to ask is if you keep the records and update them by yourself or there is an internet database or service that they provide the ratings. I think you should change the blog's name to gold all over...hahaha. Costas

A: My major secret is that I really don’t have a major secret. Basic Elo ratings are quite simple to maintain, and my original idea was to generate odds based on these, but for football the draw is problematic. I tried using the Draw No Bet markets but these markets are illiquid and are only found in a few matches so I gave that idea up.

As for generating my own odds, as some people do, and comparing them with the bookmakers or exchanges, I found that pricing the draw complicated things too much, so I gave up on that plan.

I then made some adjustments to the formula for recalculating Elo ratings after games. This is a manual, and time consuming, process using the computing power of Microsoft's Excel, and the calculations account for more than just whether the team won or lost.

A pleasant, and quite unplanned, side effect of this strategy is that I am now able to enter in the ratings of the two teams before a game, and have my spreadsheet tell me what result will keep the ratings closest to the status quo, i.e. my predicted / expected result.

While the strength of a team will fluctuate over time, it won’t (typically) change that much from game to game. The expectation is that teams will perform to their strength more often than not, but football is a low-scoring game involving those unpredictable animals called human beings, which ensures plenty of surprises. The trick is to not worry about these results (Dundee United v Hamilton last night for example) since they happen, but to look at the big picture. If a draw is predicted and someone wins 1-0, so be it. These things tend to even out in the long run. Losing bets become winners with a 96th minute goal or whatever, and if you have value on your side, the money will come.

I am still experimenting with the best way to take advantage of these results. The Correct Score market looks promising right now for home teams expected to win by 2 or more, and the Asian Handicap might also provide an opportunity. For the two goal plus teams, I’ve been backing relatively large on the Match Odds market, with smaller amounts on the Correct Score. Ideally both come in, but it’s not bad if the team ‘only’ wins.

Looking ahead to this weekend, and no games at the top level in England, but in Scotland, Celtic should win by 1 at Aberdeen and Hearts will beat Falkirk at home. The other three games at Hamilton, Kilmarnock and St Mirren will be draws.

On Sunday, Rangers are one of my 2 goal teams at home to Hibernian.

Tonight sees one goal home wins in League Two predicted for Burton Albion (2.16) v Crewe and Northampton Town (1.96) v Aldershot Town. The strike rate on these selections in this League is exactly 50%.

All one goal home wins in the Championship, except for draws at Doncaster Rovers and Swansea City. The top selections are Coventry City at 2.16 and Preston North End at 2.26. League One has a couple of 2 goal winners projected in Brentford (1.74) v Wycombe and Millwall (1.61) v Exeter City.

Good progress on Serie A - I'm up to December now, and with a quiet weekend ahead I should be caught up and it's off to La Liga.

Two Stepping

Thanks (mostly) for the comments again.

The link to the ratings on the statto.com page was interesting. I’d actually considered using these ratings a couple of years ago, but in the end decided that I would be unlikely to be able to find an edge using raw information that is publicly available. It was interesting to compare mine with theirs though, and note some significant differences such as Burnley who are ranked 13th in my ratings, while statto have them bottom at 20th. My biggest climbers right now are Stoke City, who have performed to or better than expectation in their last six games, whereas Statto have Birmingham City as the top trend team right now. Mind you, this was before tonight's results.

Last night’s results weren’t great, in fact I ended the night down slightly. In the Premier League, five teams were expected to win by one goal, and the two home selections did just that, including the best value bet of Arsenal at 2.22 which was good, but disappointingly, none of the three away selections could oblige. The draw at West Ham didn’t pan out as expected either, but we’re not going to win them all.

In Scotland, my big winners were Celtic who ten years on from that classic headline "Super Caley Go Ballistic, Celtic Are Atrocious" game, won by the predicted margin against Hearts, the draw between the holiest teams in football - St Mirren and St Johnstone, which was expected, as well as East Stirling who were expected to win by 2 over Elgin City and did just that, but there’s no backing the Correct Score in this league so I had to be content with the Match Odds!

The games that were expected to be 2 goal wins this week have an outstanding record. The only losing selection was Dundee United, who should have beaten Hamilton by two but instead lost by that margin! The full results for those interested are here, but this is to point out an exceptional run rather than imply that I have found a trend that is likely to continue this favourably:

Manchester City v Bolton Wanderers 2-0;
Cardiff City v Peterborough United 2-0;
West Bromwich Albion v Scunthorpe United 2-0;
Swindon Town v Oldham Athletic 4-2;
Bury v Macclesfield Town 2-1;
Stevenage Borough v Mansfield Town 3-1;
Celtic v Hearts 2-0;
Dundee United v Hamilton 0-2;
East Stirling v Elgin City 2-0.

Quite remarkable really. Overall, two goal expected winners win by that margin 43% of the time so 7 out of 9 is well above expectations.

The Serie A ratings are continuing to be formed. I started at the end of 2008-09 and am adjusting them with results from this season. As of the end of October, the exact predictions are hitting at 31%, not bad, in fact better than most divisions, but it's early days yet.

Screenshots!

I'm not sure what the request in comment one from the last post for screenshots is all about since, as Bennee said in comment two, the selections were posted yesterday. And never-mind that a screenshot can be easily fudged these days, but regardless, a screenshot is included above for those who have trouble going back a post or two.

Bennee asked a couple of questions:

Do you list all the elo selections somewhere or only choose to tell us certain ones?

Right now I tend to just give the Premier League forecasts, since those are the games that have the highest profiles, and the most liquidity. When there's nothing at the top level, I sometimes dip down into the lower leagues, even as far down as Annan Athletic on occasion, and pick out a few that I think might be of interest.

If you continue this hot will you start selling your selections?

Someone else asked me that a few days ago. Sure! Send money. Lots of it. Now.

Elo Ratings Stay Hot

Colchester obliged last night with a win over Southend, and tonight’s Premier League results weren’t too shabby either.

Fulham obliged at 1.81 beating Burnley, and Manchester City at a tight 1.48 beat Bolton Wanderers as expected, but because they won by the predicted two goals, I had a nice bonus at 8.6 from 2-0 on the Correct Score market and I can take the loss on the 1-3 and Any Unquoted.

My typical betting style is lower price and frequent winners rather than higher prices but infrequent winners. Recently I’ve been getting the best of both worlds with frequent winners at higher prices!

And to round off a fantastic night, the predicted draws at Portsmouth (v Sunderland) and Wigan Athletic (v Stoke City) both came through at 3.4 each.

Roll on tomorrow.

Amygdala

The brain's fear centre, activates at the very thought of losing money.

WASHINGTON (Reuters) - People are afraid to lose money and an unusual study released on Monday explains why -- the brain's fear center controls the response to a gamble.

The study of two women with brain lesions that made them unafraid to lose on a gamble showed the amygdala, the brain's fear center, activates at the very thought of losing money.

The finding, reported in the Proceedings of the National Academy of Sciences, offers insight into economic behavior and suggests that humans evolved to be cautious about the prospects of losing food or other valued possessions.

Benedetto De Martinoa of the California Institute of Technology in Pasadena and University College of London and colleagues were studying why people will turn down gambles that are likely to lead to gain.

"Laboratory and field evidence suggests that people often avoid risks with losses even when they might earn a substantially larger gain, a behavioral preference termed 'loss aversion'," they wrote.

"For instance, people will avoid gambles in which they are equally likely to either lose $10 or win $15, even though the expected value of the gamble is positive ($2.50)."

They studied two women with a rare genetic condition called Urbach-Wiethe disease, which damages the amygdala, the almond-shaped center in the brain that controls fear and certain other acute emotions.

The researchers compared the women's responses to 12 people with undamaged brains. They noted this kind of study usually involves only a few people as it is not possible or ethical to deliberately damage a person's brain to see what happens.

The volunteers were asked to make gambles in which there was an equal probability they would win $20 or lose $5 (a risk most people will take) -- or would win or lose $20 (one most people will reject).

The two patients with damaged amygdalas fearlessly risked a $50 pot.

"We think this shows that the amygdala is critical for triggering a sense of caution toward making gambles in which you might lose," Colin Camerera of University College London, who worked in the study, said in a statement.

"A fully functioning amygdala appears to make us more cautious," added his colleague Ralph Adolphs. "We already know that the amygdala is involved in processing fear, and it also appears to make us 'afraid' to risk losing money."

The study could also help researchers understand why some people are more willing to take risks than others. Perhaps genetic differences in the DNA activated in the amygdala explain it, the researchers said.

Monday Mumbling

Thanks for the recent comments. It’s always good to know there’s someone reading my drivel.

With regard to the Super Bowl yesterday, the Saints won, easily covering the spread as expected, but they won in a way that was not expected. I thought the Saints would start stronger, and that it would be a matter of trying to hold on in a shoot-out against the Colts, but it was the Colts who went ahead early with the Saints coming back. At the start of half-time I reluctantly went red-all-over to a small degree, and then changed my mind! Influenced by the decision to go for the 4th down late in the first half, I decided during half-time that the Saints were where I wanted my money after all, so I again backed the Saints for a profitable outcome that could have been better.

Not that I am complaining though.

Tonight’s League One match between Colchester and Southend is predicted to be a one goal home win.

Plenty of games over the next couple of days, with the strongest winner in the
Premier League expected to be Manchester City at home to Bolton.

Arsenal at 2.22 are the best priced of the expected one goal winners – the others being Fulham, Manchester United, Blackburn Rovers, Chelsea and Tottenham Hotspur. Draws at Portsmouth, Wigan Athletic and West Ham United.

Super (Bowl) Sunday

Still time for it all to go pear-shaped, but the day is perfect to this point. As predicted by the Elo ratings, Birmingham City were one goal better than Wolverhampton Wanderers, and Chelsea's two goal margin of victory was also exactly as predicted. The Elo ratings to this point, at least at the Premier League level, are proving to be far more accurate and profitable than I would have thought possible. As I cautioned yesterday though, I have a feeling that as the season enters its silly season, predictions may not be quite so accurate.

Football Elite still have one match to go today, but after short-listing Rennes yesterday, a 4-2 winner at 3.25, they followed up today with Recommended Bets of Mainz '05 (2.3) v Borussia Moenchengladbach and Real Mallorca (2.34) v Villarreal who both obliged as 1-0 winners. From the short-list, there was another winner with Atalanta (2.36) beating Bari, also by 1-0. Matt certainly finds the unders with his recommended bets with 75% (27 of 36) finishing that way. Since I subscribed, the picks overall are up after 5% commission, with the short-list bets up 79.84 to a 10 point stake, but the recommended bets down 50.90.

My Rugby Union bet also came in with Les Bleus beating the Scots as expected.

So on to the Super Bowl. My numbers have a narrow, 32-31, win for the Indianapolis Colts which suggests a bet on the over 55.5 at 1.96 is value, along with the New Orleans Saints '+4.5 at 2.0, or straight up at 2.88. However, I won't be risking much pre-game on these selections. While these ratings might be good for a regular season game, the Super Bowl is anything but a normal game. I shall be trading in-play, looking for the Saints to gain the upper-hand early, with the Colts coming back as the game unfolds. At 2.88, the Saints are value, but with a view to trading out if the price drops to odds-on.

Betfair Profits

Andrew Cleary of Bloomberg wrote this piece a couple of days ago. No surprise that commission charged rose 27% last year with the introduction of the Premium Charge, which I believe I have written about before...

Feb. 4 (Bloomberg) -- Betfair Ltd., which enables gamblers in 140 countries to bet with each other over the Internet, appointed Marks & Spencer Group Plc’s Ian Dyson to its board amid reports it is considering an initial public offering.

Dyson, who has been finance director at London-based Marks & Spencer since 2005, will join Betfair as an independent non- executive director immediately, the closely held betting exchange said in a statement today.

The company hired Goldman Sachs Group Inc. and Morgan Stanley to review its options, which include a possible 1.5 billion-pound ($2.4 billion) share sale, the Sunday Times reported Jan. 24. Victoria Palmer-Moore, an external spokeswoman for the company, declined to comment on a potential IPO.

U.K. retailer New Look Group Plc this week said it plans to raise 650 million pounds in an IPO, while Dublin-based travel- reservation provider Travelport Ltd. will seek to raise $1.8 billion in a share sale to cut debt. Deutsche Back AG estimates IPOs in Europe will triple this year.

Founded 11 years ago by Andrew Black and Edward Wray, Betfair says it processes more than 6 million transactions a day from 3 million registered customers, generating revenue from sports betting, online casino and poker games.

Annual earnings before interest, tax, depreciation and amortization climbed to 72 million pounds, Betfair said on Aug. 5. Revenue, or the commission charged on customer winnings, rose 27 percent to 303 million pounds, the company said.

Five Stages To Betfair Trading

From the Betfair Forum, courtesy of marky sparky* - perhaps you recognise yourself?

* Update 8.Feb.2010 - Marky Sparky turns out to be our friend Mark Iverson. Small world!

Step 1 - Unconscious Incompetence

This is the first step you take when starting to look into trading on Betfair. You know that its a good way of making money because you've heard so many things about it and heard of so many people who make money. Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be?

Unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you haven't got the first clue about what you're trying to do. You take lots of trades and lots of risks. When you enter a trade it turns against you so you reverse and it turns again .. and again, and again.

You may have initial success, and thats even worse - it tells your brain that this really is simple and you start to risk more money.

You try to turn around your losses by doubling up every time you trade. Sometimes you'll get away with it but more often than not you will come away scathed and bruised. You are totally oblivious to your incompetence at trading.

This step can last for a week or two but learning the Betfair market is usually swift and it won’t be long before you move onto the next stage.

Step 2 - Conscious Incompetence

Step two is where you realise that there is more work involved in trading and that you might actually have to work a few things out. You consciously realise that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit.

You now set about buying systems and e-books galore, read websites and begin your search for the holy grail. During this time you will be a system nomad - you will flick from method to method day by day and week by week never sticking with one long enough to actually see if it does work. Every time you come upon a new tipster, software or trading guru you'll be ecstatic that this is the one that will make all the difference.

You will test out automated systems on Bet Angel, you'll play with Betting Assistant using Excel triggered betting, dabble on Bet IE and maybe more Excel trading with Market Feeder. You might even look at support & resistance to try and figure out a likely range where you'll be able to make a "safe" trade. You'll consider BF Explorer and Adam's BetTrader and may even analyse the market with BetMarket Scanner and a hundred other things all in the vein hope that your 'magic system' starts today. You'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and software and you'll find yourself chasing losing trades and even adding to them because you are so sure you are right.

You'll go into the Betfair General Betting Forum and see other traders saying they make a profit and you want to know why it's not you - you'll ask a million questions, some of which are so dumb that looking back you feel a bit silly. You'll then reach the point where you think all the ones who are calling profits are liars - they can't be making that amount because you've studied, noted form and you don't make that, you know as much as they do and they must be lying. Here's the reality, most real successful traders aren't in forums such as this.

You will be like a teenager - the traders that say they make money will freely give you advice but you're stubborn and think that you know best - you take no notice and overtrade your account even though everyone says you are mad to - but you know better. You'll consider following the tips that others make but even then it won't work so you try paying for trading courses from someone else - they don't work for you either.

You might even approach a 'guru' or someone on a forum like this who promises to make you into a trader (usually for a fee of course). Whether the guru is good or not you won't win because there is no replacement for screen time and you still think you know best.

This step can last ages and ages - in fact and in reality talking with other traders as well as personal experience confirms that it can easily last well over a year. If your bank doesn't blow up in the meantime. This is also the step when you are most likely to give up through sheer frustration.

Around 60% of new traders die out in the first 3 months - they give up and this is good - think about it - if trading was easy we would all be millionaires. Another 20% keep going for a year and then in desperation take risks guaranteed to blow their account which of course it does.

What may surprise you is that of the remaining 20% all of them will last around 3 years - and they will think they are safe in the water - but even at 3 years only a further 5-10% will continue and go on to actually make money consistently. By the way - they are real figures in another market which may not apply to Betfair. They are not just some I've picked out of my head - so when you get to 3 years in the game don't think its plain sailing from there. IMO the timeframes referred to can be condensed for Betfair and I'd like other views on this.

I've had many people argue with me about these timescales - funny enough none of them have been trading for more than 3 years. Sure, I guess there will be exceptions to the rule - but I haven't met any yet.

Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times but now its in your blood

One day - in a split second moment you will enter stage 3. That is the Eureka Moment.

Step 3 - The Eureka Moment

Towards the end of stage two you begin to realise that it's not the system that is making the difference. You realise that it’s actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right. You start to read books on the psychology of trading and identify with the characters portrayed in those books and finally comes the eureka moment.

The eureka moment causes a new connection to be made in your brain. You suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins. You start to work just one system that you mould to your own way of trading, you're starting to get happy and you define your risk threshold.

You start to take every trade that your 'edge' shows has a good probability of winning with. When the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as you realise that the trade is bad you close it . The next trade will have higher odds of success because you know your system works.

You have realised in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter what as you know the probabilities stack in your favour.

You learn about proper money management and leverage - risk of account etc - and this time it actually soaks in and you think back to those who advised the same thing a year ago with a smile. You weren't ready then, but you are now. The eureka moment came the moment that you truly accepted that you cannot predict the market.

Step 4 - Conscious Competence

You are making trades whenever your system tells you to. You take losses just as easily as you take wins. You now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it loses and when you're on a loser you close it swiftly with little pain to your account.

You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 ticks and weeks where you lose 100 ticks - generally you are breaking even and not losing money. You are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders. You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.

This lasts about 6 months.

Step 5 - Unconscious Competence

Now we’re cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level. You are running on autopilot. You start to pick the really big trades and getting 100 ticks in a day is becoming quite normal to you. This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account.

You're a star on the Betfair forum and people listen to what you say. You recognise yourself in their questions from about two years ago. You pass on your advice but you know most of it is futile because they're teenagers - some of them will get to where you are - some will do it fast and others will be slower - literally dozens and dozens will never get past stage two, but a few will.

Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring - you're doing your job and that's that.

However, you can now say with your head held high "I'm a Betfair Trader".

Elo - "Summer and Lightning"

A poor start to the weekend with last night's predicted draw at Newcastle United ending up as a 5-1 rout for the home side over Cardiff City. I began to think this one was in trouble after 15' when the third goal went in for the home side.

Not to worry - the greatest system in the world isn't going to get every game right, and some good results today boosted the bank. Draws at Bolton Wanderers, Ipswich Town, Exeter City, Walsall along with the Any Unquoted for Manchester United and good priced home wins for Liverpool, Burnley and Stoke City were probably the pick of the bunch.

League Two saw four games finish exactly as predicted, as did every game in the Scottish Premier league today...

Back to the top for a moment, and the only prediction that was totally wrong was Manchester City to win at Hull City. This was the only game where laying the opposed team would have been a losing proposition. However, two more games to come, and as I wrote yesterday the expectation is that Chelsea will win by 2 and Birmingham will beat Wolverhampton by 1.

I was dreading a Fulham win at Bolton. Football Elite selected Bolton to win this game, whereas I had it as a draw. Hence I was on both outcomes, with fortunately the most profitable outcome resulting. This is the second consecutive week where Football Elite have picked a home win in the Fulham game and I have had the draw. Last week the (almost) inevitable away win came up, but lightning didn't strike twice.

In their Short-List bet today, Football Elite and myself were in agreement on Burnley, who at 2.78 were excellent value to beat West Ham.

The spreadsheet is also suggesting that certain predicted results are more likely to end up as under or over 2.5 goals than would be expected. Currently where the draw is the predicted outcome, the ratio of unders to overs is currently 2:1. Early days, but something to watch.

I'm also wondering if we are in a golden time of the season with the ratings having settled down, yet teams still have plenty to play for and thus form is at its most reliable.

In Rugby Union, my back of England in the Six Nations came in at 1.62. Not quite as comfortably as I was expecting, but a win nevertheless. I'm also on France tomorrow at 1.41.