Wednesday 30 June 2010

World Cup And Slicer's Holy Grail Found

A mixed day yesterday with the Portugal bet going down, but the expected close game earlier between Japan and Paraguay proving lucrative. If you backed the penalty shoot outs in these games as tipped here you are probably hunting for the "Donate" button on this page. Do those actually work? Anyway, as I pointed out, every R16 after 1986 has always had exactly one penalty shoot-out and history tends to repeat.

Hard to believe that there's no World Cup football for a couple of days, after 19 days of at least two matches a day. Just seven competitive matches left and Brazil are 3.6 favourites at the Quarter-Final stage.

This is historically the tightest round of the competition, with 46% of matches finishing as draws, and 29% finishing 0-0. 38% of matches are settled on penalties, and 58% are Under 2.5 goals. African countries have lost all (both) appearances, and Paraguay make their debut.

Only three countries left from the eight quarter-finalists of 2006, with Germany and Argentina meeting again, and Brazil, who lost to France. South America has a record 4 teams in the last eight, twice as good as ever before, and with one team in each match, an all South American semi-final line up is possible. Possible, not probable. While the three former champions are all favourites to advance, Paraguay are not.

More on these match-ups later in the week. Try to contain your excitement.

As you wait for the next round, you could always join in the hunt for Slicer's Holy Grail, because apparently, despite all the evidence to the contrary, and all the hours invested by Betfair forumites in vain to find it, it actually, really does exist!

The race to find it has been won by one of my readers no less. Yes, you guessed it, our friend Anonymous. He writes:

No doubt you're clever enough to figure it out yourself but there is a mathematical edge in those games and it's not that hard to exploit.
As someone on the forum commented, you can be pretty sure that anyone who claims an edge, and is happy to talk about it, is one of three things:

1. Very, very stupid - so unlikely to be in this postion
2. A charlatan - looking to profit from the gullibility of others
3. A smart individual who is attempting to manipulate the market to their advantage

I would add:

4. A sufferer of an attention seeking disorder

Still, credit where it's due, and congratulations are in order for Anonymous and the millions that will soon be his. A fantastic achievement that has proven to be beyond the talent of many other individuals and so well hidden that no Betfair employee has been able to crack it, even with access to Slicer's account history. Very well done.

I was about to post this when I noticed a new comment on the subject of Slicer, and it may be of interest to some of you (not Anonymous of course, because he's clearly cracked it). Thanks Strugar:
Well, at least the idea there is something like free money is enough amusing for everyone to try and catch that golden fish; so did I - when first heard of that myth, I spent about a week trying to prove myself to be smarter than probably thousands of betfairians who tried it before... to no avail, of course.

I don't know if you allow links to forums in your blog, but, for further reading, here is link to thread at UKBT, and then threads that annoying bloke with nick "kmabet" subsequently opened at PL and TDP, claiming that he solved "Holy Grail"; all threads caused a lot of interest and discussion, proving that people tend to accept the unbelievable if it promises profit, until realized that kmabet was only a cheater... and, as known long time ago, there is no such a thing like free meal...

Tuesday 29 June 2010

Slicer And The Holy Grail

I wrote several months ago about a wind-up merchant on the Betfair forum who goes by the name of Slicer and claims to have found the “Holy Grail” – a method guaranteed to result in a profit on all qualifying football matches.

The method consists of placing two bets before the game, and a third which is placed at Half-Time if the score is 0-0. Bet 1 is lay of this HT score, and Bet 2 is a back of the 0-0 Full-Time score, but the mischievous Slicer would have everyone believe that there is a Bet 3 that guarantees profits every time. There isn’t.

Unfortunately, any method worthy of being called a ‘Holy Grail’ can’t rely on a price being available on the exchanges after the event has gone in-play. That uncertainty alone is enough to raise questions, but nevertheless, it appears that he has fooled a lot of people who should probably know better, into thinking that such a Holy Grail exists.

It doesn’t. The football markets are the most studied and efficient of the non-horse racing markets on Betfair, and any guaranteed method would have long ago been identified, and any advantage long gone.

His claims must also have come to the attention of a Betfair employee or two, for whom it wouldn’t take more than a few minutes to research and identify any Bet 3.

His admirers have also apparently failed to consider the likelihood that any one individual brilliant enough to have achieved the impossible would be the type to advertise such a ‘fact’ on the Betfair forum.

It’s somewhat more likely that there actually is no Holy Grail, and that the Slicer character suffers from a low EQ.

R16 - Day Four

The final two games of R16 today, and the Elo ratings have Paraguay (18) a little ahead of Japan (26), and Spain (2) with a bigger margin over Portugal (9), yet the odds on the two games are similar.

Asian countries have faced South American opposition just once - three days ago when South Korea went down to Uruguay. Paraguay have reached this stage three times, failing to score and losing to European opposition on each occasion - England 0-3, France 0-1 aet, and Germany 0-1. With no real stats to go on, this one is a gamble but for an interest I have Paraguay To Qualify at 1.58.

The later game is the more anticipated. Spain missed out on this stage in 1998, and in the other four competitions have always faced European opposition and have a record of W2, D2, L1. Portugal have just prior appearance in the R16, reaching the semi-finals last time beating the Netherlands 1-0 at this stage. Portugal To Qualify at 3.0 appeals to me here.

On a personal note, four years ago today I was in Germany with my son, watching the Brazil - Ghana game in Dortmund, on the big screen in the city centre. Little did we know that the game had been - allegedly - fixed for Brazil to win by at least two goals. We just thought Brazil were good!

The German weekly magazine Der Spiegel reports in Monday's edition that the 2006 World Cup knock-out stage match between Brazil and Ghana was influenced by an Asian betting syndicate.

The magazine reports large sums of money had been bet on Brazil winning by at least two goals and a former Ghana international acted as an intermediary.

Ghana lost the last 16 round match 3-0 in Dortmund on June 27, 2006 which put Brazil into the quarter-finals where they lost to France.

The information in Der Spiegel comes from Canadian investigative journalist Declan Hill, whose book about betting on sport around the world is published in German next week.

Hill also claims two Bundesliga matches of the 2004-05 season were also the subject of a betting scam oragnised by Malaysian William Bee Wah Lim who was sentenced to two years and five months by a Frankfurt court.

German football endured the most serious crisis in its history in 2004 when referee Robert Hoyzer admitted having received 70 000 euros to influence the results of 23 matches, mainly second and third division games, between April 10 and December 3, 2004.

Monday 28 June 2010

History Repeats

Four more winners today with first half goals in both matches, 6 for 6 so far in this round, and wins in 90 minutes for the favourite Netherlands and Brazil.

East London Anonymous questions whether 1.59 was value for Brazil and Argentina without providing any argument or evidence why he feels that way. (Why is it that Anonymouses a) feel they need to be Anonymous, b) tend to be negative and c) tend to be unable to back up their comments with any facts? He writes:

Brazil v Chile is similar to the Argentina v Mexico game in that 1.59 is certainly NOT value. But, yes, you are more than likely going to be able to come back and claim otherwise when they win.
Well, they both won, which of course doesn’t ‘prove’ the prices were value any more than two losses would have proved that they weren’t value, but the wins combined with the fact that both teams won in some comfort, and the historical data do all combine to suggest that 1.59 was more likely to have been value than not.

If the matches were to be replayed tomorrow, would both teams be 1.59 again? I would suggest not.

As I have written before, with World Cup betting you unavoidably have a small sample to work with.

In the Round of 16, strong favourites have a very good record, winning 73% of matches suggesting 1.37 is an approximate price to expect and in games such as the two we have had over the past couple of days, with strong favourites playing well, 1.59 seemed very generous. No clear favourites in tomorrow’s matches though, so we have another four years to wait for further data!

R16 - Day Three

Betfair's business really is booming these days, with customers in "209 countries at the last count".

Strange really; there aren't even 209 countries in the world. There aren't even 209 football teams affiliated to FIFA, so someone at Betfair towers is doing some creative accounting, perhaps to impress investors for an upcoming flotation.

The Round of 16 continues today with two intra-confederation matchups.

Netherlands (3) v Slovakia (45): The Netherlands are a far superior team and 1.5 Match Odds is a very generous price. The Dutch were eliminated at this stage by Portugal last time around, while Slovakia is in uncharted waters.

Brazil (1) v Chile (8): A match up that statistically is similar to the Argentina - Mexico game, and priced almost the same. As for that game, this is another where the favourite is value, this time at 1.59 on the Match Odds market.

The 'true' odds on the HT 0-0 market for this stage are 3.25. The above games can be layed at 2.84 and 2.9 respectively. Less value than earlier matches, but still value. Also worthy of note is that the last five tournaments have all had the one penalty shoot-out, and Paraguay, Japan, Spain and Portugal are all at 12 to go through on penalties.

Sunday 27 June 2010

R16 - Day Two

In front of the country's finest President of my lifetime, although admittedly the competition isn't that much, the USA came up short in their bid to reach the quarter-final. There was a goal in the first half though, so my lay of 0-0 HT came in. That was it for investing yesterday. No baseball, no tennis, just socialising and enjoying being out for once.

A frequent commenter on here, Curly, has decided to start his own blog. It won't be as good as this one (obviously) but the link has been added. Anonymous will be disappointed that it is not a P&L blog, but for those of us with lives, we're not all that interested in meaningless numbers.

And so to the big games today, and yet more socialising for me.

England v Germany: In something of a contrast to Saturday’s matches, Sunday’s games have a lot more history going back to pre-1986. Germany has won all six appearances, with four games 0-0 at half-time. Unders:Overs is split 3:3. England are unbeaten at this stage too, having won 3 of 5, all without conceding, the exceptions being the 0-0 draw with Belgium, and the 2-2 draw with Argentina. Unders:Overs is 2:3. Everything points to a tight game. The draw at is available at 3.25, and under 2.5 is 1.57. The HT 0-0 is 2.44 but I will not be laying this one. Of all the R16 matches, this one and the Iberian derby are the ones that to me could be 0-0 at HT.

Argentina v Mexico: These two met at this stage in 2006 and drew 1-1 before Argentina won in extra-time. Mexico’s record is WDLLD, Unders:Overs 4:1. Argentina’s record is WWLDD and 3:2. I expect Argentina to win this one in 90 minutes at 1.59. The HT 0-0 is 2.92.

Saturday 26 June 2010

U-S-A! U-S-A!

The Round of 16 is underway with a fascinating game between Uruguay and South Korea. The HT 0-0 score in these matches seems to be too low at around 2.46. For the the USA -Ghana game it is a similar 2.48. The 'true' odds of a HT 0-0 at this stage are closer to 3.0, but it is a small sample we're working with.

Uruguay won 2-1, and I am off to watch the USA - Ghana game with American friends and compatriots of the future Mrs Cassini. It's funny how they all pretend not to like "soccer" until they achieve a modest amount of success - then it's U-S-A, U-S-A all day long!

Friday 25 June 2010

R16 - Day One

The knockout stages of the World Cup are here, 16 teams left, and it’s win or go home. I have made some rather tongue-in-cheek references to using World Cup statistics going back to 1950, but as interesting as they are, I’m sure most of us realize that the game back then was quite different to how it is today, and the statistics are pretty much useless. The days of quarter-finals ending 7-5 or totaling 26 goals are gone.

FIFA re-introduced a knock-out phase in 1986 after the second round of groups format tried for three Cups proved to be unsatisfactory, and since then the competition has always had sixteen teams in a single elimination format.

As always with a small sample, the data should be handled with care. 2002 was something of an oddity, being held in Asia, and it was possibly to be expected that Asian countries would do better, but for South Korea to reach the semi-final beating Italy and Spain on the way probably exceeded most people’s expectations.

Being the first event to be held in Africa, it might have been expected that African countries would have an advantage and improve upon the record of never having more than one representative in the last 16 this year. It didn’t happen, with Ghana the continent’s last hope.

This World Cup is already notable not only for the exit in the group stage of the previous finalists, but also for the decline in number of UEFA teams reaching the last 16. Steady at 10 every tournament bar 2002 when the total was 9, the number this year is down to a paltry 6, and all six face each other in the opening knockout games. The quarter finals will see an all-time record low number of three UEFA countries remaining! A record total of 5 countries in the last 16 are from outside Europe and South America. CONBEBOL to be the winning confederation are 2.04.

South American teams have done better than ever with all five reaching the last 16. Four in 1990 and 1998 were their previous bests. Unfortunate for them that three are in the same quarter of the draw.

The only ever present teams in the last 16 since 1986 are Brazil and Germany. Five countries missed just one year: Mexico missed out in 1990, England in 1994, Spain in 1998, Argentina in 2002, and Italy this year. When they qualify for the Finals, England are ever present!

While the above is all very interesting, to me anyway, just how useful are the statistics from a sample over five competitions?

We have 90 matches to work with, not a big number, but enough to show some trends over the years. For example, 43% are 0-0 at half-time, 16% are 0-0 at 90 minutes, 34% are draws at 90 minutes, and 21% are decided on penalties. 73% are decided by a margin less of than two goals.

Within those totals though, there are some trends. It might be expected that the teams will become more evenly matched as the rounds progress, and this is borne out by the stats, for example, there are less 0-0 draws at half-time in the Round of 16 than in subsequent rounds (although in the low scoring 1990 tournament, the first half of eight matches saw just one goal).

Historically the ‘true’ price for Under 2.5 in the Round of 16 (R16) is 1.6, Over 2.5 is 2.67, and the wins, draws, losses etc. below refer to the game at 90 minutes. There is also less chance of a penalty shoot out at this stage than at any other.

So to Saturday's matches where, for the first time ever, no UEFA countries are involved.

Uruguay (Ranked 7) v South Korea (25): The first knockout game ever between Asia and South America, so no history to go on. For the upcoming Paraguay - Japan match, at least there will be one game to go on! Uruguay have been in the R16 twice, and lost both without scoring, with both matches finishing under 2.5. South Korea has been here once before drawing 1-1 before winning in extra time v Italy.

USA (15) v Ghana (32): Another first, no CONCACAF team has ever played an African team in a knockout game. The USA has been at this stage twice before, won v Mexico, lost v Brazil, both matches finishing under. This is Ghana’s second consecutive appearance at this stage, after losing 0-3 to Brazil last time around. (Their last group game was a 2-1 win over the USA).

Flip-Flop (* 2,422)

According to Betting Zone:

favouritism changed an incredible 2,422 times on Betfair during the course of the longest match in tennis history between John Isner and Nicolas Mahut, which finally came to an end on Thursday.

After 11 hours and five minutes on Court 18 and with a raft of records having been broken, 23rd seed Isner found two crucial winners to break the resistance of the Frenchman in the 138th game of an astonishing set.

The pair first walked on court on Tuesday, and Isner - who hit 112 aces in the match - secured a 6-4 3-6 6-7 (7/9) 7-6 (7/3) 70-68 triumph to bring the curtain down on one of the most remarkable episodes in the history of the All England Club.

Betfair spokesman Tony Calvin said: "Betting guru John McCririck loves to say 'flip-flopping favourites' when the market moves in horse racing, but even that motormouth would have been rendered speechless at this incredible match.

"The odds changed in the blink of an eye."

Meanwhile William Hill offer 10/1 that Wimbledon will introduce a fifth set tie-break before the 2011 tournament as a result of that mammoth encounter.
Some of us can remember reading their Dad's newspaper at the breakfast table, and the report of the record set in 1969, when the 5 hours 12 minutes match between Pancho Gonzales and Charles Pasarell (22-24, 1-6, 16-14, 6-3, 11-9) seemed amazing.

Wednesday 23 June 2010

Coming Soon: England - Argentina?

Well, a couple of Doubting Thomases from the comment section put firmly in their place after that emphatic victory by England.

Since 1950, England have always won the third group game of a World Cup when they have had to, and haven't lost a third group game since that year, so 1.49 clearly was a value price in such a "must win" game. As stated before, there is no rule that says odds-on can't be value, and I'm rather regretting not putting my entire bonus on it.

While it is true that England did not play well in the opening games, that does not mean that England are suddenly not a good team. One of the advantages of age is that you have the experience of earlier World Cups, and know that it's a fine line between despair and ecstasy.

This World Cup has started exactly like 1990 with two draws (1-1 followed by 0-0), before a 1-0 win in the third game (against mighty Egypt) and we ended up almost winning the Cup that year. Losing on penalties doesn't really count.

When betting on the World Cup, you are always going to have a small sample of data to work with. If England played Slovenia in the same circumstances 100 times, I still think they would win more than 67 times. It's not just about who you play, but about when you play them, and the importance of gaining a result. If the games against Slovenia and Algeria were played the other way round, and we needed to beat Algeria to go through, it would have been a different game. That's why the first and second round group games are for fun bets only.

It's shaping up to be yet another England - Argentina Quarter-Final.

England To Cruise

When England qualify for World Cup finals, they are actually rather unlucky. When you examine how their record since that glorious summer of 1966, it reads like this:

1970 – A tactical mistake by Sir Alf Ramsey cost us the game against West Germany. 2-0 up and cruising, we ended up losing 2-3 after extra time.

1982 – Unbeaten, but eliminated.

1986 – Beaten by the Hand of God, and arguably the Feet of God a few minutes later, by the eventual winners.

1990 - Lost on penalties, which doesn’t really count, to the eventual winners.

1998 - Lost on penalties, which doesn’t really count.

2002 - Lost to eventual Cup winners Brazil after taking a 1-0 lead and after Seaman let in a fluke goal from about 154 yards.

2006 - Lost on penalties, which doesn’t really count.

So apart from losing on penalties, which doesn't really count, a poor tactical decision, divine intervention and a fluke goal, England have never really been eliminated in the last 44 years...

A friend did point out that there weren’t any other ways to lose, but there are. We have yet to be outplayed and beaten in 90 minutes by anyone since 1962, when we lost to holders and eventual winners Brazil, and even I am unable to come up with an excuse, except that the referee that day was a jealous Frenchman.

Life just isn’t fair sometimes, but I have a good feeling about tomorrow’s game. As I mentioned a few posts ago, this competition reminds me of our start in 1986. No Gary Lineker in the team this time around, but Wayne Rooney is more than capable of scoring in bunches, and Joe Cole must be chomping at the bit.

I received an unexpected, but well deserved, bonus at work today, and I’m tempted to lump the whole lot on England at 1.49, but of course I won’t. I do think that 1.49 is a value price, but it’s hard to be objective.

A small punt, and a few beers in the pub sounds like the ideal way to play this one. That's how I'll be playing it anyway. Enjoy.

Tuesday 22 June 2010

When To Green

It is often written that you can’t go wrong by taking a profit, a topic raised again recently by Against All The Odds. While that may seem to be a quite reasonable statement, it actually is very misleading.

In trading, one of the hardest things to overcome is the urge to take a profit at any price. Traders have a natural tendency to cut their winning trades short, and let their losing trades run, when the optimal strategy is to do the precise opposite.

No one takes a position expecting the market to move against them, but this possibility is inherent to the nature of investing. The goal is not to avoid losses, but that losses are kept to a minimum.

In reality however, investors don’t like to admit that they made a mistake, and let the bad trades go even worse.

On the other side of the coin, if the market moves favourably after taking a position, the novice trader gets all excited at a profit, and trades out.

There are good and bad wins, just as there are good and bad losses, and it’s just as important to keep a clear head when things are going well as it is when things are not going so well.

The position should only be exited if it is value to do so. If you back at 2.0, and the price drops to 1.5, only trade out if the perceived probability is less than 0.67. If the probability is greater than this, it usually makes no sense to close the position.

There are a couple of exceptions to this though.

It might make sense to reduce your position if you are using Kelly staking, as your position might now be a higher percentage of bank size than should be the case.

Also, I can accept that in an extreme example such as the one I included here, a windfall amount makes it perfectly understandable to trade out at a less than value price.

Hot Chile

A couple of nice calls in my previous post with Switzerland a recommended lay at 2.3, now trading at 7.4, with Chile winning at 2.38. Now we get to the really interesting part of the World Cup, win or go home. OK, so some can afford to draw or even lose, but you get the idea.

There are also occasional arbitrage opportunities if you put in the work. Multiple exchange accounts not always required either. For example, Group B had Nigeria to qualify available to lay at 4.6 yesterday, yet the true odds based on the Match Odds should have been more like 5.2. (Argentina to win their third game are 1.63, Nigeria to win theirs, 3.2). All on Betfair.

With a draw a satisfactory result for both teams, it's not too surprising that Mexico v Uruguay is odds-on to be a draw, and 1.39 to be Under 2.5. 0-0 is 3.6.

South Africa at 2.24 DNB look worth a bet to me also. Even though France are well ahead in the Elo ratings, they are in sulk mode, and South Africa will surely be looking to go out with a win.

Monday 21 June 2010

Opportunity Knocks For England

I haven't seen this mentioned anywhere else, but it seems to me that there is a very good chance that the World Cup Round of 16 will not be balanced too evenly.

Heavyweights Netherlands, Italy, Brazil and Spain (three of the top four in the betting) could all be in the second quarter of the draw. The Netherlands are 1.05 to win their group, with Brazil at 1.22 to win theirs. Paraguay are 1.25 to win Group F with Italy second favourites to qualify. Group H is wide open with Switzerland favourites to win the group at 2.3, and Spain not out of it. Brazil v Spain, with Spain 2.0 to reach the last eight? I also think the Swiss are a lay at this price. I have Chile to beat them, and while they can still win the group with a win over Honduras, the price will drift.

Even if only three of those groups pan out as the odds suggest, that will still be a heavyweight section by any measure.

The third quarter could see Argentina in there with Germany, (two of the top five), plus Mexico and the USA (or England if they can't beat Slovenia too handily but I'm thinking 3:0), and the fourth will have possibly Japan, Switzerland, Paraguay and Portugal.

The top quarter may yet feature England, and if they can make it they will possibly face Serbia, followed by South Korea or Uruguay. That's as easy as it gets, but didn't we think that about Group C?

Undoubtedly there will be more surprises yet, but it's informative to look ahead and see the possibilities or probabilities.

Sunday 20 June 2010

Big Misnomers

I mentioned college sports in a post the other day, and the importance of knowing the rules. Not so important, but maybe of passing interest to some readers is the ridiculous names that some of the conferences have.

For those unfamiliar with the concept, American college sports are traditionally organized into groups of teams known as "conferences”. A few of these are quite logically named after the geographic region of the members. For example the SEC (Southeastern Conference), the Big East, or the ACC (Atlantic Coast Conference).

Showing something of an inability to think ahead, others are named according to the membership size, so there are currently the Big Ten, the Big 12, and the Pacific-10 Conferences.

You might be forgiven for thinking that the Big Ten has ten teams, but it doesn’t. It has had eleven since 1990, with a twelfth team to be added in 2011. The logo (pictured above) is actually rather clever. Note the hidden “11” in the logo, with one ‘1’ either side of the ‘T’. The logo designer will no doubt be getting a call shortly.

The Big Ten actually started life as the Intercollegiate Conference of Faculty Representatives, but was more commonly known as the Western Conference ('western' being a relative term apparently). The first reference to the conference as the Big Nine was in 1899 and it became known (unofficically) as the Big Ten in 1917. Then in 1946 it was the Big Nine again, before once again becoming the Big Ten in 1949, and it has remained the Big Ten ever since. Even when it became eleven in 1990. It has plans to expand to as many as 16 teams. Logo man will be able to retire early.

The Big 12 will be losing two teams before 2012, and while the Pacific-10 does currently have ten teams, that number will increase to 12 in the next few years. The Pacific-10 hasn’t always been named such – it was founded as the Athletic Association of Western Universities (AAWU) (and these actually WERE western universities) in 1959, and went by the names Big Five, Big Six, and Pacific-8, becoming the Pacific-10 in 1978. Why not just name it the Pacific Conference?

So the Big Ten should become the Big Twelve and the Big 12, formerly the Big Eight, should become the Big 10, but that would make things confusing.

Why does everything have to be "Big" anyway? Size isn't everything, but if it's that important, why not use alternatives such as the "Enormous 11", "Massive 12", "Gigantic-14", "Terrific 10" or "Dirty Dozen". On expansion it could become the "Baker's Dozen", then the "Filthy Fourteen".

OK, so complaining about 'Big' could arguably sound a bit rich coming from someone born on an island that prefixes its name with “Great", but that's the name God gave us when he created the Earth 4,000 years ago, and who are we to criticise Him?

It’s not just the USA that seems to lack foresight with their names though.

In Rugby Union there’s the Super 10, no wait, Super 12, I mean Super 14, soon to be Super 15, competition, not to mention the Six Nations, formerly the Five Nations, and before that, the Home Nations Championship. What happens when Italy want to join in and play? What's that? They do already? Oh.

Football had its G14, which then added four more teams before disbanding, and there are probably more examples in sport that escape me for now, (suggestions welcome).

At least the World Cup should be safe from name change for the foreseeable future.

But it’s not only sports that have this problem.

In politics, there’s the G8, formerly the G6 and G7 (Group of Eight, Six and Seven respectively), and in academia there’s the G-13 in Canada formerly the G-10.

And then there's something that affects us all - the calendar. That's messed up too.

In Latin, Septem means 'seventh' month, which was perfect until 153 BC when some idiot decided to move the first day of the year March 1st to January 1st.

How brilliant an idea was that?

In an instant, September, October 'eighth', November 'ninth' and December 'tenth' all became misnomers.

Next time someone asks "What have the Romans ever done for us?" you will know what to say. They screwed up the calendar, that's what.

It's annoying, but I have an idea. My suggestion is that we move July and August to the end of the year. That way, not only can the months of September through December regain their rightful places in the calendar, but we also give ourselves a shot at having some warm, sunny days to break up the long winter. And for those of us who like to take the days off between Xmas and New Year for a little downtime, how great would that now be?

We could rename the two months while we're about it. Julius and Augustus are long gone, they've had a good run, and taking their names away would be something of a punishment for the hurt caused to September through December for all these years. It's time to honour some more recent heroes, perhaps the months of "Jordan" and "Beckham" might be appropriate?

Yes, I understand it would be confusing having the World Cup quarter-finals, semi-finals, third-place playoff and final played after a five month delay, and yes, I can see it might cause problems at Wimbledon with strawberries being out season, and yes, the Tour de France wouldn't be the same with performance enhancing drugs being out of season, and yes, "grouse season" wouldn't be the same with grouse being out of season, and yes, the British Open and British Grand Prix would have to make some changes, but I think the idea has merit, and the grouses I've spoken to like the plan. A lot.

The US is a little unsure about celebrating the "4th of Jordan" though. The suggestion from there is that the "4th of Jesus" would be more popular, but there's the whole separation of church and calendar thing over there anyway.

Double Crossing

One of the consequences of Betfair’s cross-matching algorithm is rather odd.
In a binomial market, a request to back at 2.0 results in an opposing lay at 2.0, but when the numbers are rounded, strange things happen.

For example, a back of Alpha at 1.85 results in an opposing lay of Beta at 2.16. Enter a lay at that same price of 2.16 on Beta, and the opposing back for Alpha appears at 1.87.

Not only that, but you can have a market where there is money to back Alpha at 2.16 and at 2.18. The 2.16 was offered first and is there as a result of an opposing request to back Beta at 1.85, while the 2.18 was entered as a lay of Alpha, with an opposing lay displayed at 1.85.

Hang in there; I do have a point.

Now, if someone decides to lay the 1.85, they are matched with the money at 2.16 first, NOT as you might expect, with the money at 2.18.

Apparently Betfair do NOT always give you the best price available, despite what they claim.

Saturday 19 June 2010

Living On The Edge

On May 1st I included this comment in my post:

And in another amazing coincidence, back after two months away is Betting For a Living (BFAL) who is aiming to do exactly what JP was trying to do, make a living from betting. Interesting day. Rather ambitiously in my opinion, BFAL is aiming to make £2,500 a month mostly on horses, but without having any edge, or at least not one that he is revealing. Most readers know my views on horse racing, and this is that it it most probably the toughest sport to make a living from unless you are on the inside. I look forward to being proved wrong though, but starting the year with a loss of £545 in two months doesn't bode well.
I'm still not convinced that BFAL (Mudflaps) does in fact have an edge, and it appears that he himself is beginning to question the fact, if he wasn't before:
"I can't say too much without giving away my strategy (which I would rather not do in order to protect the edge I may or may not have)..."
In his post yesterday, he concluded with this:
Having said all that I have decided to have a serious look at trading things differently in the future and that may well mean changing my strategy completely. More news of that over the next few days.
Now Mudflaps did have an excellent May, averaging £114.08 a day, but since then I think he'll agree that results haven't been as good. His daily average is now £55.76 but as I posted on his blog, so long as you have an edge and maintain your confidence, then the profits will return.

So why the decision now to change strategy completely after seven weeks? (I asked this question via a comment, but for some reason it failed to show.) Having an edge doesn't mean that you will be immune to losing runs. On the contrary they are to be expected, but the right response to a losing run is not to give that edge up; it is to stick to the plan confident that in the long run the edge will guarantee an overall profit.

While I have written before about the importance of being able to adapt rapidly because markets change and edges vanish overnight, the decision to change strategy completely so soon suggests that when Mudflaps speaks of the edge he "may or may not have", it is becoming apparent that it's more likely he doesn't and he is realising this.

Otherwise, why give up a profitable edge?

Misplaced Confidence

I wrote a few days that the Sports Betting Professor's tips had ceased, but I spoke too soon. They have been arriving, although I've been ignoring them.

However, while watching my money on Under 2.5 in the Cameroon - Denmark game evaporate, I've been going through the e-mails and bringing the resords up to date. He wrote in this afternoon's e-mail that

We've been going through a rough stretch this past week but stick with it because I'm confident things are going to turn up for us.
Having caught up on the season to date, he now has the less than impressive record of 97 Wins - 113 Losses and a net loss of 13.98 points. Where this confidence is coming from I have no idea. The guy clearly has no edge, and if there's money to be made, it's from laying his selections, not backing them.

Nature Nurture

Mark Iverson wrote an interesting post, essentially about the capacity for self-improvement.

I watched the hugely interesting documentary, 'The Rise & Fall Of Tiger Woods' last night and boy was it an eye opener. I already knew that Tiger's late father Earl had crafted his career but was astonished at the lengths he'd gone too to ensure his son had the best chance of success. We've all heard of pushy parents but that guy took things to a different level! Maybe he went too far, but there's no doubting that what he did helped to create the World's greatest golfer.

The programme got me thinking. Do we all have the capacity to improve? If I'd practised for the same number of hours as Tiger, would the rate of my improvement have been as consistent and as rapid as his? The instinctive answer is no and the stock response is that we need natural talent but how do we know?
Now, Who once said, "the harder I work the luckier I get?"
I think it was Gary Player, but the quote gets attributed to Arnold Palmer et al.

For some sports, and I would include golf in this, you really don’t need any exceptional physical talent. What physical ‘gift’ does one need to be able to play darts or snooker?, but however much some of us might want to become the next Usain Bolt, most of us are doomed to failure because we do not choose our parents carefully enough and inherit an insufficient number of fast-twitch fibres. The number of people who can succeed at long distance running is much larger though. Pretty much anyone can run a marathon if they put their minds to it.

When it comes to artistic skills, I know that had my parents spent their lives pushing me to become an artist or a musician, their money would have been wasted. I just don’t have any natural aptitude for art or music, and no amount of time or money would change that. (Speaking of music, and nature, I read yesterday that officials in Belarus have asked for tapes of previous concerts before they will let Elton John perform in their country. They want "to make sure he doesn't try to convert audiences to homosexuality". Seriously. Do people in Europe still believe this shit?)

Moving on - when it comes to trading, Mark asks “
Am I succeeding at trading because it suits my personal attributes, because I work harder than others or a due to a mixture of both?

One thing I can say is that you can't beat attention to detail, and after investing more time this year analysing my performance and studying the game if cricket it seems to be paying off.”
To be a successful trader on the exchanges, my view is that you need the following skills, and to some degree all of them can learned or improved upon if you are prepared to put in the time and make the sacrifices which are neceessary:

A fundamental understanding of mathematics and statistics

A liking of sports and knowledge of the rules

Discipline and patience

The ability to make instant decisions under pressure

An understanding of the psychology of trading

Other aspects of your life in order – the support of family

In more detail, you need to understand the mathematics behind it for a start, and as easy as that sounds to those of us who have done this for a while, not everyone is able to get the hang of it, or at least not to the point where they achieve a comfortable level of familiarity with the interface and understand what the numbers mean in terms of probability.

You need to understand the sports, and to understand a sport, you probably need to enjoy it first, although that’s not necessarily true. Basketball is an example of a sport that I had very little interest in pre-exchanges. Watching the markets and how much money was available was what drew me to that game, but for most sports that I trade, I had a fairly good knowledge of them for several years. The importance of knowing the rules may seem obvious, but reading the Betfair forum, it's quite amazing how little some people know about a sport or a market before betting on it. "What are the overtime rules" is a good one. Or, "Does the totals market include points scored in overtime"?)

Some sports we grow up playing, and we know them pretty well, but others (for most of us the US and Australian sports perhaps) we have to learn from an older age. They all have their quirks. How, and when, time-outs are used is just one example. Rules vary within sports too. I had no idea before I got into baseball that the rules were different in the American League from the National League, and in American Football, the rules in College games are different from the professional game, and the Canadian version is different yet again! College and professional basketball have differences too.

Discipline and patience are a must. If you’re the type of guy who needs action every day, then you are going to bet when you don’t have value. You’re going to chase when things go wrong. You also need the discipline to keep accurate records and spot what might not be working any longer, or what might be working better than before. Trying to convince yourself that you have an edge as many gamblers do, when they don’t, isn’t going to help anyone. You also need patience when starting out. It's not like picking money up from the street.

Coping with pressure can be difficult, especially when you’re liability is large and the market is moving away from you, but it’s an example of something that can be learned and for me it’s still something I need to improve on. I try to focus on the big picture and keep losses in perspective. However much I might lose on a bad night, it’s really insignificant in the whole scheme of things. I’m playing with house money, and it’s a small percentage of net worth. I learned that losing a couple of thousand on the betting exchange wasn’t any different at the end of the day to losing a couple of thousand on the stock market. Yes, it was the result of a decision or decisions that didn’t work out, which is annoying, but if you have that all important edge, it’ll come back with interest. Do we stress when our house drops in value?

There are many books on the psychology of trading. I read some when I got into futures and options trading, and I read them again when I got into the betting exchanges. You need to know your markets and learn which of the two elements of fear and greed are driving the market, and when that might change. I also highly recommend the book “Blink – The Power of Thinking Without Thinking” by Malcolm Gladwell.

Trading is a lonely activity. I am lucky that I have stumbled upon this form of trading at a time in my life when my kids are grown, and I have a steady job, a calm home life with a very supportive fiancée who makes me tea, and knows when to stay quiet, and who has never, ever, asked about wins or losses or complains about a rather quiet social life. Maybe I should marry her? Oh, I am. Seven weeks from today!

Friday 18 June 2010

Shades Of '86

This World Cup for England reminds me of 1986, when England started off scoreless in their first two games. They lost the opener to Portugal 0-1, then drew with North African Morocco 0-0 before a couple of 3-0 wins over East European Poland and then Paraguay put us through to the infamous 'Hand of God' game. A win by any score next Wednesday will see them through, and we're 1.55 or so to do just that. Got to stay positive.

Now to ROI again, and I'm inclined to agree with Curly that, for a trader, ROI isn't a particularly useful figure to know. I will probably track it for my Elo bets next season, but for my trading activities it seems a lot of extra work for no real purpose.

Anonymous comments on yesterday's post:

I don't quite understand your reasoning on the first point. 2.06 at 5% is effectively 2.01 so you have confirmed you are prepared to bet at no more than 0.5% value which doesn't sit comfortably with me. 2.01 is the equivalent of 49.8%. I don't see how you can expect to differentiate between a true 50% shot and a 49.8% shot although, personally, I do price markets to 0.5%s so may make something 49.5%.
My post should have made it clear that these borderline bets are for an interest only, and are infrequent. They're the sort of bet I do on a Tuesday night when there's just a couple of games in League Two. When there's a full weekend schedule, I focus on the matches that offer the higher perceived edges.

He continues:
Although not a trader, I'm not sure of the wisdom of being prepared to bet 10x the amount on what you are looking to trade compared to when you have a straight bet and are not looking not to trade. You'll often have to take a big hit, sometimes even the full £1k. And if you operate to small margins (like the 2.06 on 50%) your starting positions are, relatively, too large.
Anonymous admits to not being a trader, and his lack of understanding what trading is about is perhaps best illustrated by his use of the word 'often'.

Yes, often traders take a big hit and lose their investment. It's to be expected. No one who trades is going to get every trade correct (except, perhaps, the great Adam Heathcote). What matters is the bottom line - that your profitable trades add up to more than your losing trades.

If you make ten trades, and on nine of them you lose 100 points, but on the tenth one you gain 2,000 points, that's excellent. Yes, you lost 'often' but you had value, which as I may have mentioned before, is what this is all about.

As for the wisdom of being prepared to bet 10 times my punt amount on a trade, it all comes down to confidence and perceived edge. I have watched enough markets now to have a high degree of confidence that a price is wrong, and by a lot more than 0.5%. I do not operate on such small margins in-play. Most markets move too fast and without meaning to sound too big-headed, but if you watch enough markets you instinctively know when a price is wrong.

I do not have that level of confidence in my pre-game punting, not yet anyway.

Thursday 17 June 2010


Anonymous(2) writes

So basically you're saying you aim for a minimum edge of about 0.5%?? (i.e. taking, after commission, 2.01 on 1 2.00 shot)
No – I am saying that I look for ‘at least’ 2.06 if the market is a 5% commission market. That’s my starting point.

Understand that punts are a very small percentage of my action. Whereas I often risk, at least for a time, four figures while trading in-play, I seldom put more than ₤100 on a punt, and certainly not that much if the value is borderline.

As best I can, I use Kelly on my punts, so that the bigger my perceived edge, the higher the stake and so if I am on at say 2.06 on a 2.0 shot, it’s for little money and if the edge (re-calculated after each trial) turns out not to be an edge, the price I will take next time adjusts.

He adds:
That's crazy. There's no way you could price up markets accurately enough to make your perceived 0.5% edge a reality. You would be having non-value bets an awful lot of the time.

Yes, that would be crazy, but in actuality, and I’m using what I do with the Elo football ratings as an example here, when I price something up at 2.0, and check the prices available, I find one of the following.

a) The price is several ticks higher than 2.06, in which case (after due diligence) I back it.

b) The price is less than 2.06 in which case I drop it.

c) The price is 2.06 or slightly more. For these I typically put in a back at 2.1 and hope it gets matched. On a weekend with a busy schedule, if it stays unmatched, that’s fine. There are plenty of better value bets around. However, if it’s a quiet Saturday, or a midweek game on a quiet night with little action, I may accept the 2.06 close to kick-off just to have an interest for a small amount. Even if the value is tight, I still perceive that I have value.
I'm not a trader but ROI can be worked out easily enough. On the rare occasions where I do move in and out of a market in running, I use my stake as my maximum exposure at any given time. You should be able to do the same.
That’s an interesting idea to use the maximum exposure to calculate the ROI, although I’m not sure that figure is readily available after the event, and one big trade skews the numbers significantly. I suspect that I move in and out of markets a little more frequently than yourself!

I was looking at the numbers from a typical NBA game last night, for which Betfair do actually total up the backs and lays for you, so it would be easy enough to calculate ROI based on the total backed.

There would be significant differences in the results obtained using the two methods though.

Twenty trades each of ₤1,000 and twenty lays of ₤990 would result in a gross profit of ₤200, and an ROI of 1% based on the total backed.

However, using the maximum exposure method, if one trade is for ₤10,000 and the others for ₤10, with a resulting profit of the same ₤200, the ROI comes out at 2%.

Make the maximum exposure ₤1,000 as in the first example, and a profit of ₤200 raises the ROI to 20%.

It would be interesting to know if other traders calculate their ROI and how.


Finally it appears the goals are coming. A veritable feast so far today, eight in two matches and the average needed to beat the all-time low drops to 2.36.

Quiz time: What game was the first ever 0-0 draw in World Cup finals matches?

Argentina looked good, but if they lose badly to Greece and South Korea thrash Nigeria, they're out! OK, so I won't be backing that outcome myself, but it could happen. 1.01s are turned over every day.

France and Mexico have similar Elo ratings, with Mexico slightly ahead and at 2.0 on the AH (-0/-0.5) they will be by fun bet for the next game.

Some early baseball for a change with the Los Angeles Dodgers playing the Cincinnatti Reds which will occupy the next couple of hours. The Dodgers pitcher just hit an RBI which the market wasn't expecting. When they score first their record is 23 - 6. Handy to know.

Informed Decisions

This post was written in reply to Altobelli (great name) who posted this on the Betfair Forum:

I'm thinking of taking the big step into exchange trading and am looking for some advice. I'll be out of a job at the end of the month so will have a bit of time on my hands. I'm not looking at making this a career choice just yet but want to utilise the spare time i have to practice and develop my skills. So basically I need some advice on the best way of getting started. I understand the basic concept of trading but I need to practice and develop my own strategies. Can some of you experienced traders on here suggest a starting point? What is good trading software to use starting off with, are there a couple of good books I could read, would it be worth my while doing an exchange trading course? My main betting interests are football, particularly the Correct Score market, so I'd probably look at that as a starting point. Would appreciate any suggestions and advice.
My reply: I’m not sure some of the advice above, although no doubt well intentioned, is necessarily the best for a novice trader.

The generalization that “people who make ‘informed decisions’ on betting markets lose in the long run” is simply not true. It all depends on where you get your information from, and how you use the information you get.

What IS true is that you will lose in the long run if after processing the information available, you do not have an edge over others.

Optimism alone doesn’t cut it. Gamblers by nature are optimists, who feel that the laws of probability somehow do not apply to them and that 1.01 means a certainty. See how many threads are posted on here every time a 1.01 loses. Assuming the 1.01 is accurately priced, they will lose 1 in 101 times – not really that rare given the number of races, matches, events and markets there are each day. From the reaction they receive from some, you'd think aliens had landed, or that there IS a god.

So you need an edge, and it’s up to you to find one. No one is going to give you theirs. What sport you decide to use is up to you. If you like football, and think you know something that thousands have missed, then try it. The big matches certainly don’t want for liquidity.

Horse racing is similarly liquid for the most part, but if you’re like me and don’t have access to inside information, you’re probably going to struggle because plenty of people do have inside info.

Someone suggests tennis – but then cautions that you need to know a lot about it. He's right - you do. You are in a competition with thousands who know far more than you do, some of whom have done this for years and may be sitting court-side or in contact with someone who is.

You don’t need any fancy software. If you don’t have an edge, the fanciest software in the world isn’t going to help you.

The suggestion to start small is solid advice. If you have an edge, you don’t need a big starting bank - it will build up on its own quickly enough.

Discipline is essential - can’t argue with that. Things will go wrong, and the worst thing you can do is compound your losses when the red mist surrounds you. Stick to the plan, and always be prepared for the worst.

Specialising is solid advice too, although if you specialize in a short-season sport such as NFL, you might want to add a couple more sports to your bow.

The exchanges offer you the best chance to make money from gambling. As someone mentioned, the High Street is full of bookies, there because they continue to make money, not because they are a charity shop.

There are a few books out there on trading, but while some are a good read, I can’t say any of them have really helped with trading betting markets. It all boils down to being able to find value, and no text book teaches you that.

Bottom line is that trading profitably isn’t easy. You are highly unlikely to sit down next Monday and start making money. Be careful with that redundancy money. Be patient. It took me close to two years part-time to find an edge, playing with the same initial bank of £97.50 for all that time, up to four figures at one point, down to £21 seemingly the next!

I had much to learn and so do you. Good luck.

Wednesday 16 June 2010

The Swiss Roll

The good news: Queensland beat New South Wales easily enough (34-6) to start the day off on a high note, which was followed by a win for Chile, and then the even better news - the upset of the World Cup with Spain losing to Switzerland and in danger of not winning their group and facing Brazil in the Round of 16.

The second round of group matches is now underway, and perhaps some more open games with a few more goals. It’s hard to imagine there could be any less!

A different Anonymous asks what my ROI is.

I have no idea! Because I am mostly a trader with different styles in different sports, it’s not easy to calculate. Some big events I have close to 100 trades on.

The Premium Charge causes problems too. There’s no easy way to go back and apportion the charge to individual markets from the week before. Seasons overlap so it’s not even viable to calculate it by sport.

Anonymous continues on ROI:

Personally, I aim for 5%. If I make something 50% I won't play at a price under 2.10. If I make something 58% I need 1.81
For my punts on sports such as football and rugby, where I try to use BETDAQ and perhaps WBX, I am similar. If I have a selection rated as a 0.5 probability, I look for at least 2.06 if the commission is 5%, 2.05 if it’s 4%, 2.04 if it’s 3% etc.

He adds:
I tend to feel more confident when I price outcomes between, say, 40-60% which is normally the case when backing handicaps and the like. I would normally look for a slightly bigger edge with more "extreme" numbers.

I view the more extreme numbers as outliers from the majority of the data, and are thus less reliable. Manchester United do not play Exeter City too often. Erring on the side of caution with this type of matches seems entirely reasonable to me.

He asks:
I'd be interested to know how, for example, would you have priced the Germany -0.75 market v Australia?
The question on Germany -0.75 is an example of something for which there is little historical data so the answer is that I wouldn’t be able to price this market up with enough confidence to put anything more than an interest bet on it.

I did have an interest on the Germany -0.5/-1.0 market based on the Elo ratings for these two countries, and using my spreadsheet which predicted a +1 win for Germany, but the spreadsheet was developed for league matches not quadrennial tournaments and so there was a large dose of ‘feel’ associated with this.

A project for the close season is to enhance the spreadsheet to give a precise superiority figure for one team over another. As I wrote before, currently a team can have a +0.5 or a +1.49 superiority, but both are rounded to +1. It should be easy to improve this and use the Asian Handicap markets when they are liquid enough.

In a sign that the League season is approaching, the draw for the first round of the League Cup has been made with newcomers Stevenage Borough drawn at Portsmouth (how the mighty are fallen) and Yeovil Town no doubt delighted at drawing Crystal Palace, who came close to the nightmare of becoming the Diddymen.