Tuesday, 14 June 2011

Reply to Peter

There is an excellent comment in the comments section on the last post. Over the past 6 months or so, I have had some good questions asked on here but this one probably ranks above most others. One thing I struggle to know at times is whether or not readers fully understand the way the systems work and the results I'm posting. Questions like that from Peter help me in the sense it gives me something to discuss but importantly, it also challenges my thinking which is a great thing for me personally.

I know from the comments posted on here over the past few months that there are a lot of intelligent people reading this blog and they probably get a lot from it. I can't help but feel this blog would be a better read if I got more comments like this which then allows me to expand on the work I've done and the thinking behind the systems etc. I think what I post on here is just the tip of the iceberg but unless people ask questions and get me thinking, I think I'll struggle to improve things going forward.

I hoped that by posting on the SBC forum, I'd get asked lots of questions and people would challenge my thinking on there but so far, it hasn't happened. I can't even get a comment on the thread in all honesty which is confusing for me personally and a little bit frustrating as I'm now struggling for what to write next. I could park the blog and the SBC thread until September but I hoped I'd spend all Summer explaining the systems and models and how they work and looking at ways to maximise profits next season but I really need people to ask me stuff to give me something to respond to.

Anyway, Peter's comment is a really good one and it does challenge me and asks some very pertinent questions. I'll deal with one question at a time.

Looking at last season,the systems 6,7,8,21,22 all performed poorly compared to previous seasons.Do you think this was a one-off or would you say last season's results were indicative of what may happen next season?I dont understand why anyone would follow these systems next season after last season.

I think that's probably a very fair comment Peter. I've spent a lot of the last few weeks looking at these systems from last season and the results and wondering whether or not these systems are actually worth following in their own right. After all, I have shown that it is much better to be backing teams that appear on two rating algorithms rather than just appearing on one algorithm.

However, that's not to say that the individual systems aren't worth following. The 5 individual systems made a combined return of 5.5% from 1,760 bets last season in a live environment. I've applied a couple of additional filters on away bets after last season and tweaked the base ratings by a tiny bit which should increase the 5.5% return hopefully.

Looking at it subjectively though, I can see why a 5.5% return over so many bets might actually appeal to some people. If you are playing lower stakes and want a very high turnover of bets, these systems allow you to have enough turnover to employ this strategy.

If you are driven by higher ROI and a reduced number of bets, then I do think that these systems may not be fit for purpose. However, last season was a very poor season for these individual systems and there is no guarantee that next season will be as bad. These systems all looked very good until Christmas but suffered badly after Christmas with the high number of draws they were hitting.

Overall then, I can see why most people wouldn't choose to follow these individual systems next season but I can also see why they could appeal to the right sort of person.

Like many I assume,I will be concentrating on systems 6-21,6-22 and the like this season.Have you looked at how these 6 systems perform in a portfolio?If not, can you take a look.Can you also take a look at how systems 7-21,7-22,8-21 and 8-22 perform in a portfolio too please?I like these systems but I would prefer over 500 bets a season for a football system.

I agree with you Peter that most people will concentrate on these double systems. After all, the results from the first live season were very good and therefore, I personally would be more confident about these systems next season if I was forced to choose.

I haven't looked at how these 6 systems had performed in a portfolio. Here are the results:

The results look good I guess and it is appealing to have an ROI of 16.3% from last season and a sample of over 1,000 bets.

If I look at the top 4 systems, then the results are:

This looks even better with an ROI of 21.1% from last season and a sample of 541 bets.

You suggested you wanted a portfolio of systems that produce 500 bets a season and this might well be the portfolio of systems for you Peter. Obviously, there is more analysis you'd need me to do before betting your life on that portfolio next season........

You mentioned the idea of only backing homes on one of these systems as a possible way to achieve a high strike rate, 10%+ return. As you may already know,Football Investor runs a strike zone system featuring these types of bets (including bets from top European Leagues).Last season,it provided a very nice return for my portfolio.Can you look at devising a portfolio of home bets from the systems please that will generate around 200-300 bets at an ROI of 10%?Backing 50 homes in a season isn't a system I'd follow.

I mentioned this before on the blog but it really is up to the individual to go away and look at some of the stuff I've posted on the blog and if they come up with anything, I can confirm whether or not their calculations are correct. However, since you seem like a nice guy and have clearly done some work already Peter, here's a quick look at the homes on the 6 double systems. e.g. 6-21.6-22 etc.

The returns are as follows:

A remarkable 21% ROI last season with a strike rate of 64.4%. This is over 239 bets. At the end of the day, you can do this yourself if you look at the returns by system and look at home/away bets and so on.

I disagreed with a comment on your last post regarding leverage and the fact you don't get much leverage with these systems in a portfolio.Surely you would look at the performance of the portfolio and then calculate the betting bank as a result of the longest losing run the portfolio has encountered.You wouldn't do as you suggest and sum up the betting banks for each system.

This is an interesting one and I think you may have caught me out here. When I wrote this in my last post, I wasn't really thinking about this but I'll admit you are correct (I won't admit this too often that I'm wrong!)

If I look quickly at the P&Ls for the portfolios of systems 6-21,6-22 etc. the P&L and Drawdown graphs look like this.

If I look at the drawdown graph, the max drawdown was seen last season and was a substantial loss of 90pts for H/A betting and 45pts for DNB.

Based on these drawdowns, I would have suggested a bank of 225pts for H/A betting and 112pts for DNB.

If I sum up the banks I suggested for each system, it comes to 255pts for H/A betting and 140pts for DNB. Hence, if you are playing this particular portfolio of systems, you could use a lower bank than summing up each of the individual banks. I stand corrected.

I think my point was more around the amount of leverage you get from running a portfolio like this is nowhere near the leverage you'd get from 6 independent systems. The issue is the correlation of the bets that appear on each system.

Anyway, I hope this answers all of your questions Peter. Just get in touch if there is anything else you want to know.


  1. Hi Graeme,

    Thanks fot the great site and the detailed analysis of all the systems. As I'm a bit of a stats geek, it has kept me amused for hours.

    One thing that I have been looking at is the way that you are sizing your banks for next season. I understand that you are sizing the banks based on the historical drawdown of each system. What I have been thinking is due to the major differences between the home and away bets, up to 25% in strike rate and around 1 point in returns you are probably understaking the home bets and overstaking the away bets.

    Is there any chance that you could have a look at this, and you may be able to maximize the returns if the betting banks are differentiated between the home and away bets?

    Thanks and Good Luck

  2. Hi Grant.

    Thanks for the comment mate. I enjoy reading that this has kept someone amused. It keeps me amused writing it although at times, I do feel like I'm writing to myself!

    I should be honest and say that I don't adhere to some of the stuff I write on here and this is especially true when it comes to betting banks I suggest. :)

    I sort of have two levels of the blog. One is written for the ordinary guy in the street who takes an interest in this but doesn't have the time/inclination to fully understand it and the other would be for guys like yourself who are into this sort of thing. Hence, when I suggest 2.5 times the worst losing run as a betting bank, it's very general but I personally don't use anything like this. As you say, you really would want to split this down into home and away bets as they look nothing alike results wise and behave nothing alike. Hence, you don't really need as big a betting bank like I suggest for each system if you split them down. 2.5 times the worst losing run is also about as cautious as you can get with football betting I suspect and way over the top. The average losing run tends to be much smaller, so your bank would just be gathering dust most of the time apart from the one in 3 year event when you might need it!

    I'm actually really short of time over the next 48 hours or so (away for a work meeting for a couple of days) but I'll be about at the weekend and will answer you properly then or even early next week possibly.

    Is there a particular system or set of systems you'd like me to look at?

    I'm actually working out what my staking strategy will be for next season (well, I've started but it's a big project!) as I'm a bit of an action junkie when it comes to the footie. I like high turnover and a high number of bets each weekend which spreads my risk. I staked well into 6 figures last season on the footie but as I've admitted on here a few times, I was nowhere close to winning what I should have won. I didn't get within 25% of any return on any system last season which is pis* poor really. Too many staking changes (up and down!) didn't help and then I bottled it after April and missed a bit of the comeback in May.

    If you let me know what systems you want me to look at, I'll take a look at it for you then mate.


  3. Hi Graeme,

    Thanks for the reply. There's no hurry as the season doesn't start for a while yet.

    From the testing I've been doing, I seem to think that you could probably use a 1 point stake for the away bets and 2 points for the home bets and not affect the draw down too much. I actually think it may smooth out the returns!

    It all depends on whether both the home and away bets are losing at the same time due to seasonal circumstances, or if it is just a random distribution. From the results that you have posted I do not have visibility of the monthly returns separated into the home and away bets so I can't determine it myself.

    Anyway, I'm not really after anything in particular, I just thought it may give you something else to look at, and possibly maximize your returns.


  4. Hi Grant.

    Thanks again for your comment. I'll get around to looking at this over the next few days. I was fairly busy this weekend and my spare time last night was spent answering questions on the SBC forum.

    I'll do a blog post on anything I find.