Erroneous Selections

A belated, but nonetheless appreciated, comment on my opening post of 2017 Average Joe, about which Dean commented:

Hello I'm a recent follower coming from the School of Buchdahl. Very much enjoying your transparency and writing. You write above "...conversely a placed bet becomes a non-qualifier as a parameter moves and it is no longer a qualifier. These things tend to balance out over time, so there's no point stressing over them."

This issue vexes my decisions on market timing. Can I ask if you've written more extensively on the subject and if affirmative, for links to those posts. You're right that they balance out over time so really it's a question of mentally dealing with "erroneous" selections. Seeing the price drift may confirm one backed the right horse but - particularly in those instances - do you ever feel compelled to trade the other way to exit completely? 

Regards Dean

As much as I have written over almost nine years, I can't recall writing much specifically about market timing. It's generally accepted that the closer to the event start time that a bet is placed, the truer (i.e. more accurate the prices, and thus probabilities, are). As a disciple of Joseph Buchdahl, Dean has probably read Joseph's explanation for this:

The more information, through the opinions of bettors expressed via their wagers, that is brought to a market, arguably the more accurate (or efficient) it becomes at correctly estimating the true probabilities of sporting outcomes. Evidently, the point in a betting market at which the most number of opinions has been expressed occurs at its closing, i.e. at the start of the event.

The probability of an outcome will almost always change from when the market opens to when the event starts, in some cases dramatically so. For example, if word leaks out an hour before tip-off that the Cleveland Cavaliers will be unexpectedly playing without LeBron James, a player with a high VORP (value over replacement player), the lines will move several points.

This is an extreme example to make the point, although similar situations have happened to me in the past, most memorably in November 2012 when the San Antonio Spurs decided to rest their 'big three' (at Miami Heat) resulting in a huge line move - and a fine from the NBA. 

That I can't even recall now whether this move was in my favour or not is probably a good sign. Getting emotional about your betting is a trait that should be eliminated as much as possible.

Basically, I try to place system bets as close to start time as possible to minimise the possibility of the line disqualifying bets from a system or including others. And when such bets are missed or become invalid, I don't look at them as "errors", merely as one of those things that happen in the real world.

Clearly, the further out from start time that you place your bet, the more at risk you are from a market move, but for every bet you might have on the Spurs that goes against you, over time you'll be on the Heat just as often which is why I say it balances out. So long as you are staking sensibly, I don't see any point in trading out of your position - in fact, if you are able to trade out of your position, one might ask why you entered the bet earlier in the first place, rather than wait. 

Some people, notably in horse racing, specialise in trading pre-game movements, and this is a separate topic. My thoughts above pertain to the punter looking to bet and forget and have their actual results as close to verifiable 'official' results as possible.