| Value
Analysis
What
is Value Betting?
Value
betting is the art of strictly mathematic betting.
When
you bet on value, you don't pay attention to criteria
like league tables, form, history, injuries, etc. The
"normal" way of betting is first finding an object
you believe in, and then checking if the odds are
acceptable. Value betting requires another way of
thinking. In fact, value betting is the opposite of
conventional betting. It's not about picking objects,
but picking odds!! This means that you don't
necessarily have to believe in the team you put your
money on. As long as the odds presented are better than
the strictly mathematical chance your team has of
winning the game, it's a value bet.
Finding
the value
Is
an object with value typically an object with odds more
than 3.5 or so? No, an object can be a value bet with
odds of just 1.30, or 1.20. It all depends on what you
think is the objects chance of winning the game. If you
think a team has got 50% chance of winning the game,
odds above 2.0 represents value. If you think the team
has only got a 40% chance, it's no longer a value bet
(with odds =2.0).
Objects
with good value are objects that will give you a
positive payoff over time.
So
if Portsmouth has got 10.0 for a win at Old Trafford, it
is a value bet if you think Pompey will win more than 1
out of 10 similar games.
The
formula for finding an objects value is:
��������� ODDS * Probability /100
>= 1.0�
Probability
is your subjective opinion on the object's chance of
winning the event.
The
bet is a value bet if the result of the above
calculation is a number greater than 1.0. If it's below
1.0 it's not a value bet, but it can of course still be
a good bet.
Value
Betting Tips
Big
favourites are rarely good objects for value bets, due
to the bookies' fear for large payouts if the favourites
should win. Big names like Man Utd, Juventus, Inter,
Milan, Barcelona, Bayern Munich, are rarely given good
prices by the bookies, because the bookies know that the
common punter bets on the big names (as they often
seem to win their games, and they have a huge
following).
As
a result of the above, real value is often found in the
form of underdogs. The bookies know that punters are
more likely to bet on favourites, and therefore prices
are generally higher on underdogs.
Patience
is the key to success when betting on value. Don�t
alter your strategy if you lose several times in a row.
The point is that when you win, your net winnings will
outweigh your total losses.
Value
betting could be a good strategy at the beginning and
the end of a season. Results are often more
unpredictable in the first and last quarter of the
season, and punters should perhaps make use of this
"fact" by adopting a value betting strategy during early
autumn and late spring.
Stake
determination
Once
you've found a good value bet, you need to determine how
much of your funds you should bet on this object. There
are several criteria that can be used to help you to
determine your stake, and to help you place your bets in
a certain system. Take a look at our thoughts on
Money Management.
John
L. Kelly is a famous name within the gambling business.
His theory and formula will find an optimal stake for
your bet if you can determine an accurate probability
for the outcome of an event.
The
formula looks like this:
A = P - (1-P) / (Odds � 1)
Where:
A = Advantage (this represents the % of your betting
fund to place on the event)
P = Probability (in decimals) for an outcome (your
subjective opinion)
If
you have found an object with odds 2.0, and you find the
probability for a given outcome of this event to be 55%,
Kelly's formula can optimize your stake on this event.
Looking
to the formula above, P in this example equals 0.55. The
result of the calculation gives A= 0.1. This means that
you should bet on this object with a 10% stake of your
total funds, nothing more and nothing less.
If
you are too optimistic in your probability analysis (e.g
you think the object has got a 60% chance, when the
correct probability should be 55%), you will lose
money!!
This is due to the fact that Kelly's formula creates an
optimized stake if you know your own predicting
accuracy. If you are too optimistic you will lose
money.
If
you are too pessimistic in your probability
determination, you will win money, but not as much
money as you would if you where betting with flat stakes
(you will get a reduced payoff, but still win money).
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