I cannot stress enough how important it is to understand and seek out value in all of your betting.
It is the most important factor in making your betting profitable and the only way you can make profit from betting in the long term.
There are plenty of people out there who will tell you that finding winners is the only important thing. Please introduce me to those people so I can offer them some wagers!
Let’s look at a very simple event to demonstrate the principle of value and how important it is:
We bet on a coin toss. There are two possible outcomes of a coin toss: heads or tails. Either is equally likely to occur on any one coin toss, therefore the probability for either is 50%.
A probability of 50% expressed in fractional odds is 1/1 or even money. In decimal odds that same probability would be expressed as 2.0.
If you were to take those odds about either event occurring in a coin toss, in the long run you would break even – though in the short term you could easily come unstuck due to general variance.
At odds of even money you are receiving no value.
Even worse, a bookmaker would price up both heads and tails at 10/11 (1.91) to lock in his profit margin.
Backing at 10/11 over 1000 bets would produce the following results:
500 winners: +£455 500 losers: -£500 Overall P/L: -£45
However, if we managed to find a bookmaker prepared to offer 11/10 (2.1) about either outcome in a coin toss on average we would achieve the following results:
500 winners: + £550 500 losers: – £500 Overall P/L: + £50
Much better! We got a price that exceeded the true probability – and we made a profit/
Unfortunately, no bookmaker will offer value odds on a fixed probability event like that. The true probability is too easily calculated.
Luckily, that’s not the case for all events we might want to assess.
Let’s look at a far more complex event. One where there are a huge number of variables influencing the result – a horse race, for example.
Is it quite so easy for the bookmaker to set prices as in the coin toss example?
Are the true probabilities involved as easily calculated in a horse race?
With its huge number of variables, are the odds as easily calculable in a horse race?
Of course not.
Bookmakers are constantly making mistakes in pricing up horse races.
If we can price up a race more accurately than the bookmaker, we are guaranteed to make money because we will only ever bet when we spot value.
However, pricing up a race and creating your own odds (odds that have to be more accurate than the bookmaker’s) is difficult, time consuming and requires many years of practice to master.
As a result, even if you can do it better than the bookie, your opportunities are limited by the number of races you can assess in detail each day. Even as a 30 year handicapping veteran, I find it hard to assess more than 3 to 4 races a day in great detail.
Traditional value finding methods will always limit the number of value opportunities you can identify because of their time consuming nature.
This realisation led me to seek out quicker, easier ways of identifying value.
The more opportunities I could find, the more money I could turn over and the more profit I could make.
Well, not that simple, but I DID find a way!
I no longer create full odds for every race I want to get involved in. I stopped doing it on a daily basis a long time ago now – when I realised something very important (and very profitable!).
I think my own assessment of true probability in a horse race is very good but there is a freely available tool out there that makes those assessments far more accurately than I ever could.
It’s called Betfair – and it’s much more accurate in the long term than the opinion of any one odds compiler, no matter how expert they are. Numerous studies have shown that the horse racing markets on Betfair are exceptionally accurate predictors of true probability in the final few minutes before a race goes off.
This can be attributed to a phenomenon known as “The Wisdom of Crowds” “The Wisdom of Crowds” maintains that the averaged estimations of a group of people are likely to be more accurate than the single estimation of an expert.
Betfair prices represent the averaged opinion of tens of thousands of punters, some of them experts, the majority not. As such, Betfair prices are always likely to be more accurate than the opinion of any one individual.
The key thing to remember is this: Betfair prices, in horse racing markets just before the off are, by far, the most accurate guide we have to the true chance of a horse winning a race.
Now, at first glance it would seem of little use to know that Betfair is our most accurate guide to true probability – when it only becomes truly accurate in the final few minutes before the race.
By that time, all the value prices are gone!
However simply knowing that the prices on Betfair are becoming progressively more accurate throughout the day, points us towards a very simple method of ensuring we are getting value on our bets.
If, earlier in the day, we can identify and back those horses that are shortening in price and are therefore likely to be shorter on Betfair in those final moments before the race – we have automatically found value.
As long as we can identify horses that will end up a shorter price on Betfair at the off, than the price we are taking now – we cannot fail to make money in the long term!
Now, identifying those horses, with any accuracy, is easier said than done. It can be achieved in a number of ways and you are best searching out a method that suits you
Here’s one method that I use:
Each morning I have a good idea of a fair price for all the runners I am interested in based on form study, trainer stats/jockey stats, my own ratings and a variety of other indicators.
I then monitor the Betfair and bookmaker prices throughout the day to identify whether my opinion is being confirmed / refuted by the markets. This involves detailed analysis and prediction of price movements based on a variety of indicators.
What’s key in all this is I’m rarely trying to identify the winner of a race.
I’m simply using market analysis to identify the horses that are likely to go off at a shorter price than they are currently. Having found that value, the winners take care of themselves in the long run.
The analysis of price trends will not be right all the time, that’s impossible – but it doesn’t need to be. As long as it is right most of the time, profits are guaranteed.
Kieran Ward, professional gambler and tipster. Kieran is giving away a free system and some training which will teach you more about his methods Click Here