How to calculate if a system is profitable or not
To calculate whether a system is profitable or not, you will need two pieces of information:
The strike rate of the system.
The average SP of losing bets.
Firstly, let's take the strike rate. Divide the strike rate by 100 - minus the strike rate. Therefore, in the case of a strike rate of 75% for example, we divide 75 by 100 - 75. This gives us a result of 3. But what is the significance of this figure? It is the average odds of losing bets, below which a profit will be made, above which a loss will be made and at which break even will be achieved. So, if the average SP of your losing bets is exactly 3.0 (2/1), you will break even. If the average SP of your losing bets is less than 3.0 (2/1), you will win money. If the average SP of your losing bets is more than 3.0 (2/1), you will lose money. It's that simple.
What this means is that a system with a strike rate of 80% may actually be more profitable that one that has a strike rate of 95%. It all depends on what the SPs are of their losing bets.
So, when someone says that they have a system with a high strike rate, don't forget to ask what the average SP of their losing bets are.
In addition, don't forget that betting exchanges deduct commission on winning bets and that betting exchange's odds are sometimes higher than SP odds. You will therefore need to take these factors into account.
Psycho