Race Pace

In response to a query on Kelly staking, Al asked: 

Thanks Cass, i may look to transition onto that in the future to maximise profits.Do you know how you can measure your "edge" so to speak?

Currently i am just making calendar monthly totals and not really looking at ROI.

I will move on to a rolling weekly, monthly total as i think thats a good way to record totals - but how do you get meaning out of these figures if say you trade maybe 3 days one week and 1 the next? thanks.

If I knew how to measure my edge, I would be a multi-millionaire by now! The best we can do in sports betting is come up with a reasonable estimate based on previous results, but the imprecise nature of this estimate is precisely why full Kelly isn't practical for sports.

Making calendar monthly totals is a distraction. The recent debate between Mark Iverson and myself both on here and on Twitter will show, if you read the comments, that all agree with this. Even Mark, although he continues to try to justify his folly by saying that it 'works for him'. It makes far more sense to find a winning approach and stick with it, than to change gears every three weeks or so. From the world of track cycling, a look at the best way to complete the one hour competition is revealing. In this event, the idea is to cover the furthest distance in one hour. In betting, the goal for a professional should be to win as much as possible in the time available.

In cycling, one school of thought is to get up to the speed you can maintain for the duration, and maintain it. Another is to start easier and build achieving what is known as the negative split. There is no school of thought that says you should slow down three-quarters of the way around the track on every lap, pat yourself on the back because you are still moving forward, and then speed up again.

Rather confusingly, Mark's latest Tweet on the subject states that he does not apply this change in strategy every month, only 'often', so it will be interesting to hear which months are exempt, and whether the profits in the last week of these months exceed those in the months where Mark drops out of top gear.

Back to Al, and as far as using rolling averages in the event that you don't trade every day, simply use moving averages per 'action day' (or even 'per event') rather than per 'calendar day'. You may also want to break these down by sport. For myself, the summer is always a quiet time of year, with my major sports being winter ones - football, NBA basketball, and NFL with the summer sports being very much fringe activities. Six of my top seven months fall between October and March, but I don't stress over this fact.

ROI is important, but it is not all-important. More important is ROBG as explained here or more fully here.

Right, time to watch my brother-in-law's tree take centre stage in the opening ceremony.