Below is the review of system 7. Two highlights to look out for is the impact of variance on a system with a proven edge and why using maximum drawdown for a betting bank may be misleading. A third thing to consider is the use of AH betting and how it can be used to maximise ROC.
As we go through these reviews, I’m sure the same themes will crop up but I’ll try my best to not go over old ground too much with each review.
An odd comment would be appreciated as always to keep me interested readers. I’m not writing these reviews for my benefit. ;)
Due to the filtering approach which is inherent within the way the TFA systems are built, the first thing that should be analysed is whether filtering the bets from system 6 to system 7 worked as I would have hoped this season.
It worked last season to a small extent where system 7’s ROI of 4.9% was higher than the 4.3% achieved on system 6. I was disappointed with that last season if I’m honest with system 7 as an ROI of 4.9% was well below expectations although (and I’m starting to sound like a broken record!), an ROI was achieved of 8.1% if dutching the selection and the draw which shows how bad this system suffered with draws last season.
Anyway, this season, there is no disappointment here. The 5.9% achieved by system 6 has grown to an almighty 11.4% on system 7. An increase in ROI of 93% is very good and easily outperforms anything that happened during backtesting for this system. Looking at it from another angle, system 7 has tightened up the filtering this season as last season, system 7 had 51% of the bets that appeared on system 6 whereas this season, system 7 only had 28% of the bets that appeared on system 6.
Of course, part of this change is the impact of bringing in more higher average odds bets on system 6 and these ultimately end up getting filtered out by system 7 in the main, so it was always going to be the case that system 7 had a lower % of bets appearing from system 6 this season.
Similar to system 6 (as you would expect), the draw coverage hasn’t worked very well on system 7 this season. The ROI drops to only 5.9% if using AH0 on all bets and if dutching the draw (AH 0.5), it is down at an ROI of 3% this season.
I think this is an important point that shouldn’t be missed. Last season, the system achieved a 4.9% ROI outright and 8.1% if using AH0.5 but this season, it is an 11.4% ROI outright and 3% if using AH0.5. It shows clearly that the system hasn’t suffered from the same number of draws as last season but even if you want the draw on your side with some of the bets (be it AH0, AH0.25 or AH0.5), you can still make a decent profit overall with a fairly low betting bank in these cases.
On a month by month view, the system struggles due to volatility due to the small number of bets and this season, it achieved a profit in 5 of the 9 months, with losses in the other 4. The system was one of the systems that really struggled in September with a 10pt loss that month.
League One was a disaster on this system this season with a loss of 13pts from 53 bets. It was the first year League One had made a loss though, so no real concern with this.
The biggest difference between system 6 and 7 was the split by Homes and Aways. Homes struggled on system 6 but they did very well on system 7. An ROI of 16.8% and this is a big improvement on the small loss last season on the Homes. Aways were slightly lower than last season with an ROI of 7.7% against 9.0% last season.
Not surprisingly, Aways in League One were the issue on system 7 with a loss of 44% this season. Ouch! League Two and Championship Aways also struggled this season on this system, so shows it was a tough season in these leagues as I’ve mentioned recently on the blog.
Similar to system 6, Premiership Aways were the big improvement this season and after losing in 3 of the last 5 seasons on this system, they produced a profit of 20pts from 17 bets! Bsq Prem aways did very well too.
I find the live graph quite interesting for this system and after 360 live bets on this system, it was basically break-even. I think this shows the impact of variance and is a great example of a system with an edge not having enough bets to show the edge. It ended last season badly, started this season badly and had lost all profits accumulated up to this stage.
As you’d expect though, it bounced back and it made about 35pts profit in the next 130 bets!
If you look back at the historical backtested results though on the P&L graph since inception, you’ll see a spell between 500 bets and 800 bets where the system broke even too. Hence, it wasn’t anything to worry about when it happened again on this system and I think it’s a great advert for the impact that variance can have on a profitable system.
Unfortunately, the impact of the variance can be seen in the drawdown graph and the system has suffered a 29pt drawdown spread over two seasons. Although I use max drawdown * a factor for an approximation of a betting bank, it needs to be looked at in context. Aside from the issues the system had at the backend of last season and the poor start this season, the system has been very stable over a long period of time. Hence, I’m not sure setting a betting bank based on a one-off drawdown is the way to go if I’m honest but others may disagree.
Last season, I suggested a betting bank of 55pts for this system. Although the largest drawdown then was 21pts and it has subsequently grown to be 29pts before rebounding, I’m not sure I’d go increasing the betting bank beyond 55pts at all.
Apart from the one blip, the next largest drawdown is less than 15pts, so I’d like to think we’ve already seen about as bad a run as you can have on this system and 55pts should be OK.
The return on capital this season was therefore 41%.
Going forward, I would think a target ROI of around 8% across 200 bets is the way to go. That would give an annual ROC of 29% which isn’t bad.
Of course, if you go with a slightly more aggressive bank than 55pts (which IMO, is over the top!), then the ROC would be increased in future.
With two system reviews done, I think it’s interesting that system 7 is undoubtedly a stronger system that system 6 in terms of ROI but is well behind it in terms of ROC. Hence, does that mean system 6 is actually a much better system to follow? I’ll leave you to ponder that but there is a trade-off at this game between risk, return and how much work you want to put into this game. ROI for show, Turnover and ROC for dough springs to mind!
Incidentally, the way around system 7 is to use AH0 I suspect on some or all of the bets. The largest drawdown is only 10pts (if using it on all bets), so a bank of 25pts would probably be more than enough. Would have only made 11.7pts this season but was still a ROC of 46%. More than one way to skin a cat at this game!