LayThePsychicWay - Lay Tips &amp; Results

2006-Oct-12

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

2006-Oct-11

...And it's George Washington, followed by George Washington, followed by George Washington

Folks

I've just read an article about a Mule race in Fresno, California. The mule that came 4th. in the race, one Idaho Gem, was the first equine clone to be born. Two others are known to exist.

What next?

Psycho

2006-Oct-9

Is a strike rate of 100% a good thing?

Is a strike rate of 100% a good thing?

Seems like this question has an obvious answer. But, 'obvious' isn't necessarily right. AND, it certainly isn't right in this case.

Earlier in the year, I came up with a new laying system. It only selects one or two horses per week, on average. Since I came across this system, it has selected 53 horses and all of them have lost. Should I jump for joy? Nope!

Here's why:

100% systems don't exist - not on this planet anyways. If they do, this system isn't one of 'em.

One of these days, the system is going to start selecting more than the odd winner (losing bet). 'Til then, I haven't got a clue what the true strike rate of the system is. All I know isthat it isn't 100%. Until I find that out, I don't know if the system is any good or not. 'Tis a strange world that we live in.

So, is a system with a 100% strike rate a good thing? Well, maybe not!

Psycho

2006-Oct-9

This green and pleasant land? But ....

I was driving down to London one morning, about 2 years ago. I was listening to a program on the radio. It was a phone-in program and there was a panel of environment experts on the the program.

One listener rang in and said, 'Given how much damage has been done to the environment, will the earth survive?' One of the experts answered, 'With respect, you are asking the wrong question. The earth will undoubtably survive. The question that you should have asked was, will man?'.

We live in a green and pleasant land, as they say. It is green and pleasant because the climate has reached an equilibrium point that allows for this. Such is its nature, the equilibrium point may not allow us to accurately predict the exact rainfall or temperature on a given day. However, it does allow us to predict, reasonably accurately, what the average temperature and rainfall will be on a given day. As a result, we are able to plan our daily lives. For example, if our annual rainfall was very high, we would not build houses in a river's flood plain. I'm sure that you can think of many more examples.

Given the current level of pollution, the earth's climate is changing. As a result, a new equilibrium point will be reached where average temperatures and rainfall may be very different to those which we now experience. The issue is, how different? A little? A lot? The point is - no one knows.

If we continue to pollute the planet at the current rate, who knows where we may end up, and this green and pleasant may not be so green or so pleasant in the future.

So, before you decide not to recycle that can, or drive needlesslessly into town, rather than walk, please think about the consequences. Better to do something now than to have to explain why you didn't to the next generation.

Psycho

2006-Sep-28

The truth about strike rates

I have an admission to make. A couple of days ago I received a comment from someone who read my blog. He congratulated me on achieving the 90%+ strike rate of my system and stated that there weren't any systems around with a comparable strike rate. I graciously accepted his congratulations and moved on.

In fact, to quote the strike rate of a system is a meaningless and possibly misleading exercise. Here's why:

Let's assume that the strike rate of System X is 60% and the strike rate of System Y is 80%. On the face of it, System Y has the higher strike rate and is probably the more profitable. Well, let's look at the following examples and see:

System X:

Bet 1: won +1pt

Bet 2: won +1pt

Bet 3: won +1pt

Bet 4: lost (SP evens) -1pt

Bet 5: lost (SP evens) -1pt

P/L = +1pts

System Y:

Bet 1: won +1pt

Bet 2: won +1pt

Bet 3: won +1pt

Bet 4: won +1pt

Bet 5: lost (SP 10/1) -10pts

P/L = -6pts

From the above, it can be seen that although the strike rate of System Y is 20% above that of System X, the P/L of System X is higher than that of System Y. Why is this? Because the average SP of System Y's losing bets (10/1) is considerably above that of System X's losing bets (evens).

This illustrates my point: that to quote a strike rate alone is misleading and meaningless.

Ok, let's move on.

Let's see how we can make practical use of the strike rate:

Let's say that we have a system with a strike rate of 86%.

If we divide the strike rate by 100 minus the strike rate, we arrive at the figure of 6.14. But what is significant about this figure?

It represents the average odds of losing bets at which a break-even position will be reached, below which a profit will be made and above which a loss will be incurred. Therefore, if the average odds of the losing bets of our system are above 6.14/1 we will lose money. If the average odds are exactly 6.14/1, we will break even and if the average odds are below 6.14/1, we will make a profit.

Note that this ignores any commission levied on our winning bets.

If we wish to convert this figure to decimal odds (as used on betting exchanges), we simply add 1.0. Therefore, 6.14/1 becomes 7.14.

I hope that you can now see that not only do we need to know the strike rate of a system, we also need to know the average odds of the system's losing bets in order to determine how profitable and successful the system is. The strike rate alone is of no use whatsoever.

Psycho

2006-Sep-28

To lay short or long-priced horses - that is the question (with appologies to the great bard)

Let's ask the question - is it more profitable to lay the longer-priced nags than the shorter-priced ones?

The perception is that it is more profitable to lay the shorter-priced nags than the longer ones.

Why?

Because the perception is that longer-priced nags on exchanges such as Betfair differ from SP by margin which grows exponentially as the SP increases. Therefore, the smaller the SP, the closer is the Betfair price to SP. As such, longer-priced nags don't represent 'good value'.

The other reason why people prefer to stay away from the longer-priced nags is that when they win, you can get creamed. Well, that's down to personal choice - to get slightly creamed often - as a result of laying the short-priced nags or to get totally creamed but far less frequently - as a result of laying the longer-priced nags.

Well, those are the perceptions - and you are very welcome to 'em.

Now here's some facts, my friends:

Have a look at my postings on my blog. Have a look at the losing bets (winning horses). Notice anything? Yes, the nags that win are the shorter-priced ones!!! Now there's a surprise.

Now go onto any web site that gives out free tips. There are lots to choose from. On those sites, there are lots of laying systems. Select one at random - it doesn't matter which as long as it has at least a 3 month history and as long as it can be verified that the tips were posted before the off. (Some post after the event - such cheek).

OK.

Now decide on an odds cut-off point. Let's say 10/1? If you don't like 10/1, select another one. It really doesn't matter where the odds cut-off point is.

If the odds of the selected nag is above the cut-off point - it's a no bet. Now, using the odds cut-off point, calculate a P/L for at least the last 3 months. Now calculate another P/L for the same time period without the odds cut off point. Now compare the two P/L's.

Now select a different system on a different web site and do the same again etc.

I've done this lots of times and have found the same thing time after time. The greater P/L is the one that doesn't employ an odds cut-off point. In other words, contrary to perception, there is greater value in the longer-priced nags than in the shorter ones.

I once came across a layer called Mr Mindyerbeak who was very successful and a jolly good person to boot. He wouldn't touch the short-priced nags with a barge pole. And he didn't do badly at all.

I also came across a guy called Terry19 who had a laying system called 'the so simple system'. He was an exceptionally nice fella. For a time, it was very successful. He had an odds cut-off of 5.9. In the end, he had to suspend it because of the losses that it was incurring.

What's been happening for years is that the bookies have been under-valueing odds. A horse that they offer at say 100/1 really should be offered at about 150-200/1. In the past, they have been able to get away with it due to a lack of competition. Betfair has now provided a playing field which is a little more level.

So, reality v's perception. You choose and good luck.

Psycho

2006-Sep-28

What do points make?

Those of you who are following my selections will have noticed that after each of my selections there is a number in brackets e.g (1.3pts) or (0.7pts). I have been asked to explain what this is, how it is used and how it is calculated.

What is it?

It represents the number of points that I allocate to each of my selections when placing a bet.

What is a point?

Experienced gamblers create a betting bank from which they fund their betting activities. It represents the sum of money that they are prepared to lose, should the worse come to the worse. A commonly-used betting bank is £1,000. But do not worry if yours is larger or smaller.

Experienced gamblers are aware that nothing is certain in this world and that losing runs can occur. Therefore, they only expose a proportion of their betting bank to each selection. That way, they are able to withstand a run of bad luck and still have a betting bank left with which to continue their activities. Commonly used exposures are 1%, 5% and 10%.

To calculate the cash-equivalent of 1 point, multiply your exposure per selection by your bank. For example, if you have a £1,000 betting bank and your exposure is 10% per selection, 1 point is equal to 10% x £1,000. Therefore, 1 point equals £100.

Therefore, if the exposure on one of my selections is 1.3pts, then 1.3 x £100 (£130) would be the exposure on this selection. Likewise, if the exposure on one of my selections is 0.7pts, then 0.7 x £100 (£70) would be the exposure on this selection.

How do I calculate how many points to allocate to each selection?

I have a large amount of statistics relating to past races from which I calculate the chances of a selection winning the race. To do this, I look at the actual performance of similar horses, in similar races, at similar courses, at similar times of the year, run on similar ground, ridden by similar jockeys and trained by similar trainers etc. The better the past perfomance, the greater are the chances that the selection will win and the bet lost. To compensate, the number of points allocated to the selection is reduced. The worse the past perfomance, the greater are the chances that the selection will lose and the bet won. To compensate, the number of points allocated to the selection is increased.

I hope that things are now a little clearer.

Psycho