Dyadic Interactions

My old friend Scott emails me some fascinating links, lately often related to the US Presidential Election and Nate Silver, and most recently pointing me to a study of Basketball Teams as Strategic Networks. I love reading this stuff, and Moneyball was an excellent book as I have written before (and the movie was surprisingly good too), but while any background information on a sport is interesting, I'm still not convinced that in dynamic interaction sports such as football and basketball, there is much to be learned from a gambling perspective. A dyadic interaction sport such as baseball is completely different in nature, with each play commencing from a set state, of which there are a finite number. In baseball for example, the historical probability of a team winning from each state is known, so that, for example, in a tied game going in to the bottom of the ninth inning, the home team has gone on to win 63.9% of the time. Combine this data with the pitcher and  the batters he will face, and you have meaningful and useful data for trading.

It's not the same in most other sports. Football is just too fluid, played on a large playing surface, and it's only with a penalty where the dyadic interaction 'kicks' in. Basketball has its free-throws for which a player's percentages are available, but the game is so fast that profiting in-play by recognising a certain pattern of build up is, at least for me, not a realistic proposition. The benefits of these studies to managers and coaches are clear, but to the trader, not clear at all. There's a reason why chess matches don't draw crowds of 100,000. It's the unpredictable nature of football, and to a lesser extent, basketball, that keeps us all watching.

Betslayer stopped by to say: 

Still the best betting blog in town, just a quick one I am rapidly approaching the cliff edge of the 2nd Premium Charge....how have you coped with the 50%? Are you finding ways to adapt? I must admit I was horrified to get 20% but its actually made no difference to my profits.

First of all, congratulations on reaching this milestone, but in my case it's been more of a millstone. My optimism that I would be able to deal with the 50% rate has faded, and my Betfair activity is now much reduced. Unless I'm pretty sure I won't be paying the Premium Charge, there is no point me using Betfair for punts, and as most readers are aware, the most lucrative markets are in-play ones, and only available on Betfair. BETDAQ are either not turning markets in-play or have feeble liquidity. The result is that most punts are now made elsewhere, and my in-play trading has become very selective. There's an opportunity cost to trading, and while it was worth it to me to give up discretionary time to play for £100 or so a day, it is becoming apparent that investing the same time for approximately half of that amount just isn't worth it. I have other projects and activities that I would rather devote my time to, and this was always about the challenge, not the money. Fortunately, giving up the day job was never an option. While the Super PC threshold may seem a big number, when you divide it by an average salary, it's not that many years before you are going to hit it. 

The seven day Premium Charge cycle is jut too short as well. This scenario is deflating to say the least - you have a good win on a Sunday, £2k perhaps on the NFL, but then you lose the same amount on the Monday game. When the PC is taken on Wednesday, your balance is now down £3k from the Sunday high. If you weren't feeling bad enough about that Monday loss already, it's a kick in the groin when you get that PC deduction. To climb back to the high now needs a £6k win. Of course, were the win and loss each 24 hours earlier, i.e. in the same PC week, you would be £1k better off than under the first scenario, and that is both ridiculous and very irritating. I have heard that Betfair may be looking at a three month cycle, and this would certainly help, but the charge, and the way in which it was introduced with no opportunity to reset for established accounts, both leave a bad taste.

There were also a couple of comments from our old friend BigAl. It's perhaps something of a surprise that he still reads this fine blog given some of his previous comments and abuse, and I'm sure he will understand if I choose to rise above his provocations moving forward.