Friday, 27 July 2012

Quick catch up....

As I expected would happen, as soon as I switched my attention to helping out a number of subscribers with advice and Excel help for the upcoming season, the blog goes a little bit quieter than earlier this Summer.

I think I’ve now caught up with all the emails over the past week. It’s been a very busy week and I’ve been working on TFA stuff every night this week for a few hours.  If I’m being honest, I’ve really enjoyed it and after spending so long this Summer looking backwards and analysing systems and building ratings, it’s great to be able to get back to looking forward and discussing portfolios of systems to follow, staking plans, ways to play the bets and so on. Much more refreshing and I’ve said to a few others, it’s really whet my appetite for the upcoming season now. I can’t wait for it to get started.

I expect I’ll have another batch of subscribers to help in the upcoming week, so I don’t foresee too many deep insightful posts on the blog but I’ll to do the odd post to keep the blog ticking over until the bets start.

A few people have asked if I’m keeping this blog for next season and the answer to that is yes. I did think of migrating to the new website but I like the fact that this blog has been here since the inception of the systems and I’d like to see it through to the end of the project. This is the 3rd and final season in terms of the project from when I started out and I’ll reassess the purpose and use of the blog after the upcoming season.

The blog will track the results of all the systems and although I may not manage daily results posts like the previous two seasons, I’d hope for weekly updates as a minimum.  In between the results updates, we’ll have the usual thoughts and opinions on how things are going and with so many systems on the go, I’ll hopefully have plenty to talk about next season.

In terms of helping out subscribers with their portfolios for next season, it’s gone well so far.  Everyone who has been in contact so far has come to me with different ideas about the systems to play or different staking plans and it’s nice for me personally to see so many different methods being used. I guess I always hoped that one day, people would just be taking my systems and doing their own thing with them and I suspect this will happen this season, even more so than last season.

Of course, there are many systems being used by most people and therefore, I’m kidding myself if I think that the results of everyone are going to be totally independent. There is going to be massive correlation between everyone’s results but this is the way it should be. If I was giving out bets on so many systems that weren’t correlated in some way, you could have the situation where someone following could make a large profit and someone else could make a large loss and IMO, this isn’t the way the service should work. If the combined systems don’t perform well next season, (UK or Euro), I can guarantee that most of us following will struggle and therefore, these systems are the ones that should be tracked to monitor the performance of the systems.

One thing that has arisen in a few emails this week has been around target Return on Capital figures. Thankfully, I’ve not had any discussions around ROI targets and most people are concentrating on ROC I think which is the right thing to do. As I’ve said before, I’m happy with a 5% ROI each season as long as I double my betting bank whereas others may see a 15% ROI and 50% growth in their betting bank as acceptable.  It’s horses for courses at this game and for me personally, I’m not fussed about ROI and what it looks like. If I can achieve a level of ROC that covers my time and makes me some profit, then I’m a happy chappy.

One common theme has been the desire to aim for 100% bank growth and I suspect that's the high level aim of everyone following next season.  I've achieved this for the past two seasons, most subscribers achieved this last season and therefore, although it's a very ambitious target to aim for, it isn't impossible that some may achieve this if things go well again next season. 

Although I’m not going to share any portfolios that people have derived themselves or with my help, here are a few graphs showing the historical P&L of the portfolios.  This is from 4 portfolios I’ve seen this week, either through from people asking me to run a portfolio for them based on their ideas and staking plans or from me pulling together a portfolio for them, based on their requirements.

Example 1

Example 2

Example 3

Example 4

I think the historical P&L graphs and the P&L summaries give a good indication of the targets that some people are aiming for this season.Of course, past results can never guarantee future success as everyone knows but at this game, historical results are all we have to go on and so far, most of my systems have stood the test of time as they’ve gone from backtesting to a live environment.

I’ve proofed over 8,000 bets now over 2 seasons but next season, I’ll be proofing another 12,000 system bets across 10 different leagues, so I think this is the most important season by far.  I don’t want to say the first two seasons are irrelevant as that’s slightly unfair on myself and on the systems but basically, this 3rd season is going to be much, much more important than any of the other two seasons thus far.

Really looking forward to it now and looking at the sample portfolios above, it’s hard to not get excited that the first bets are only 5 weeks away now.

Bring it on……

Monday, 23 July 2012

Final analysis topics.....

I’m conscious of the fact that there are still two outstanding analysis topics to be covered this Summer that guys have asked me to look at. However, I’m also conscious of the fact that people have started writing to me today looking for my help with building portfolios for next season and therefore, I think it’s time to draw a line under the analysis of topics and start getting into a bit more detail with the subscribers. So, I’ll cover both topics off in this blog post and instead of doing spreadsheet work, I’ll tell you my thoughts in words with no pictures!

Before I start, the eagle-eyed amongst you may have noticed the comment at the top right stating the service is closing on the 31st of August.  It was always my hope that I would get enough members to be able to close before the season starts and although I may not meet my target number for this season, I’m happy enough to close the service before the first bets. I don’t like people joining midway through the season and although people got lucky last season who joined later (the first month was the only losing month!), I’ll be closing the doors at the end of August.

I know a few people have written to me this Summer and have said they’d join nearer the start of the season. I’m going to be quite strict and if people want to squeeze in before the season starts, they know the deadline now. Of course, if I get a small rush of members, I’ll close the service if my target number of members is met, so the end of August may be too late to join. ;) 

OK, the first topic I want to cover is a question posed by Mark. It was around how much leverage you can get if you combine the systems in a portfolio?

As you will have seen by now, when I’m doing analysis on the blog, I always combine the systems together, look at the profitability and drawdowns and then work out betting banks for the whole portfolio. This is basically including any leverage you’d get as if you sum up the drawdowns of each individual system, you’ll get a higher figure in most cases.

What I would say is that you need to be careful with the combined systems. I know already from the emails today that some people are gravitating towards the higher combined systems as they are the best UK systems and I’ve no issue with that. However, you also need to remember that 7-22 is a filter on 7-21 and 8-21 is a filter on 7-21 and 8-22 is a filter on 7-22. Hence, a team appearing on 8-22 appears on all 3 systems before it too.

Hence, if you combine these 4 systems, you don’t get too much leverage at all.  This is OK though as the betting bank you’ll need will take into account the fact you don’t get much leverage anyway, so you don’t end up worse off at all, you just end up playing a bigger betting bank than you would necessarily think.  Usually, if you play 4 systems with some bets overlapping, you can get a lot of leverage but in this case, these 4 systems are so correlated, when 8-22 hits a losing bet, all 4 systems hit a losing bet.

As I say, there is nothing wrong with this and if you play the game properly, your betting bank will take this into account, so you’re no worse off. What you might find though is that if you only played system 7-21, you can end up with a similar level of ROC as I’m not sure what the other 3 systems add.

Of course, if you want to gain maximum leverage, you’ll be running with a portfolio of systems that are uncorrelated (e.g. 7-21, 6-32, STOY and E2-E7) and you’ll find that the betting bank needed will be much lower than the individual betting banks of all 4 combined. Of course, this portfolio would carry much more risk than the portfolio of (7-21 to 8-22) but then again, if you only need half the bank size to follow it, then you only need half the return to make the same level of ROC overall.

Anyway, my overall suggestion for leverage is don’t even think about it. Pick the systems you want to follow for the right reasons (the systems you think will win you money!) and then sum them together, work out what betting bank you need overall for your portfolio, what sort of target ROI you’re aiming for and check you’re happy with the target ROC at the end. Much better you do this than find systems which give you great leverage, you follow them, they do rubbish and you wonder why you’re following systems simply because they provide good leverage!

The other question is one from Grant around the monthly returns. Grant’s question was simply around why were the monthly returns so much smoother in the second season than the first season for the combined systems?

I had a quick look at this and it’s a simple answer really but if I was try to show it mathematically, I’d end up in a massive hole I think! 

It’s simply variance I think.  This season, there were 61% more bets on system 6-21 than last season but a reduction of 33% of bets on systems 6-22 to 8-22.  System 8-22 for example had only 42% of the bets it had last season.

When you think of the way the staking plan works for the combined systems (8-22 is a 6pt bet and 6-21 is a 1pt bet), all that has happened is that you have a much greater number of bets but at lower average stakes than the first season. Hence, the correlation between the returns of the systems reduces and in the first season, when 7-22 and 8-22 had a good month, by definition, the whole portfolio had a good month. Likewise, when these systems struggled, the whole portfolio of 6 systems struggled.

Last season was different. There were a few months last season where 6-21 had a bad month but the more selective systems saved the day and in the months where the selective systems struggled, system 6-21 had a great month and saved the day. Hence, for portfolio betting, it’s much better for a smoother journey if you aren’t putting all your eggs in one basket every month. 

As I say, it’s a very simple explanation and knowing Grant, I’m sure he wanted chapter and verse from me to prove this but then again, knowing Grant, he can do it himself, so I doubt he cares what I think anyway!  ;)

I think that covers off all the analysis topics I wanted to cover this Summer. My next job is to work with the subscribers who need my help to come up with portfolios that they are happy with for next season.

What I aim to do over the next 5-6 weeks when I’m working with the subscribers is to do regular blog posts on some of the portfolios and some of the ideas being generated. Of course, if any subscriber thinks they’ve come up with a unique way to play the bets and doesn’t want it shared with others, I won’t do but I’m hoping I find enough nuggets of information that I can share with blog readers to keep the blog ticking over until the season starts.

Friday, 20 July 2012

Example systems using AH betting

One of the things that a few people have asked me for this Summer is more details around AH betting and how it can be used on systems.  Clearly, I’ve spent a while looking at it on system 7-22 and I’ve shown lots of various staking options for that system.  Although I’ve said I won’t be looking at my own portfolio until I’ve helped everyone else out with their portfolio this Summer, I’ve obviously got some of my own ideas from last season and I’ve played about with various things over the Summer already when I've had time.

In this post, what I’ll do is show an example for a UK system I followed last season and a Euro system that I’ll probably use next season. It’s only a small tweak on something I did last season anyway, so I’m comfortable with it already but it may give some of you reading some more ideas about your own portfolio for next season.  I should add that I'll probably end up following fewer systems than last season even though there are twice as many systems live this season. I'll just play higher stakes on fewer bets to achieve the same target £ return I'm aiming for. More of my time will be tied up with the ratings this season, so I'll need to adjust my betting portfolio to account for this reduced time.

Before I describe the UK system, here’s the results summary:

As you can see, it looks OK and I used a very aggressive 18pts bank last season, so it generated me a ROC of 110% on this single system.  My max drawdown last season was only 9pts, so my betting bank wasn’t far off.  As you’ll see, the max drawdown on the system is 13.6pts but that was actually a combination of two seasons, but in a single season, it’s only 12pts if I remember correctly. I used 1.5 times this as my bank last season on this system, so 18pts.

That’s something that I’ve discussed before on the blog before.  When it comes to my personal betting strategy, I’m much more aggressive with betting banks than I’d suggest to anyone else.  Quite simply, do as I say and not as I do or at the very least, if you do as I do, know the risks involved in doing so!

So, what is this fantastic system then with this amazing ROC?  Well, it’s simply system 7-21 with a twist.

I simply staked according to the AH line where I was most comfortable with based on the odds. How did I come up with this? Well, I guessed and took a punt!

I played all Home bets at 2.75 or less outright and all other bets at 2.75+ with AH0.  For Aways, I played AH0 on all teams less than 3.50, AH0.25 on all teams less than 4.00 and AH0.50 on any team greater than 4.00. On this system, I didn’t play any additional stake on Homes at all last season (should have done!)

There wasn’t any great thought that went into this staking plan though. That’s the point I want to keep making on the blog at the moment. Although we can use historical data to underpin our assumptions and inform our decision making, this is NOT a science.  You don’t need to have a staking plan down to 6 decimal points to make money from following these systems. Nope, good old fashioned gut feeling can get you a helluva long way, combined with a little knowledge around how the systems work.

So, based on what I’ve learnt from the first two seasons with the UK systems, what am I going to do with the Euro systems? Well, I’ll be applying the very same sort of idea with the Euro systems.

Here are the results for the first Euro system I played with:

That’s not a bad looking P&L graph or drawdown graph is it? 

This is simply system E2-E7 with the same staking plan applied to it as I used on system 7-21 last season.  Is it an optimal staking plan?  Not got a clue but I look at the P&L, I look at the drawdown graph and I think to myself, I’ll use a 20pt bank and we’ll see what happens.

Based on the historical data, if the systems can get within 50% of the historical results, I’ll make a ROC of 50%+ on this system. My own target for any system is that I should be looking to make a ROC of 50%+ and therefore, I’m happy to go with this system next season as one of the systems in my portfolio.

Now, people will be looking at this and thinking how does this compare to 1pt outright on Homes/Aways, is it an optimal staking plan he’s using, is it the best Euro system he’s using, has he looked at every system, how long did he look at this and so on.

Well, the answer to all of this is that I spent about 10 mins deciding on my strategy for this system after looking at the high level results of all systems, pulled together the results with this staking plan, had one look at it and thought yeah, that system will be in my portfolio next season.

I’m not trying to play down the fact that we should be basing our portfolio decisions on what has happened in the past but as long as you have some sort of understanding of the systems, I believe you should be able to come up with a way to follow a portfolio of systems that suits your individual requirements.  Yeah, you can ask me to pull together a summary like I’ve done above but don’t rely on me to tell you what to do. You decide what to do and just get me to check that you’re not doing anything daft!

Anyway, I hope this gives people some further food for thought.  I feel like I’m giving you all this info and saying we could do X, Y and Z but then saying no, let’s just take a punt and follow whatever we want but at the end of the day, this is called gambling for a reason.  No matter how much work we do, we can’t guarantee anything.  Don’t get bogged down into thinking someone who’s an Excel whizz has a massive advantage over everyone else following these systems. I don’t believe this is true myself.

Wednesday, 18 July 2012

20 ways to play system 7-22

I said in the last post that the post was an important one but being honest, this is another very important post.  It’s not too important in the sense that I’m only looking at one system here but the point of this post (aside from answering the question posed regarding system 7-22) is going to be wider reaching. It’s going to show that you really need to open your eyes to what is possible with these systems if you really want to maximise your return on capital and by this, I mean the days of just picking a system, staking 1pt on every Home and Away bet and expecting this to maximise your profit is gone. 

Being honest, these days were never there in the first place. Last season, I used AH betting on the Aways and staked higher on Homes and if you read some of the subscriber feedback across at the website, you’ll see that some staked more on Home bets and some played variable stakes on the Aways or covered the draws on some Aways, so I guess we’ve all slowly been working towards something that was more sophisticated than staking 1pt on every Home and Away bet.

The issue with the level staking plan of 1pt to win outright on every Home and Away bet is two fold in my eyes. 

Firstly, Homes and Aways don’t carry the same element of risk.  It’s impossible to believe they could carry the same level of risk when the average odds are so different. Quite a few people I know following the systems don’t even look at my systems as individual systems. They look at system 6 as 6H and 6A. Hence, they have double the number of systems to deal with! Not only that, it means they can then decide to follow the Home bets on system 21 and the Away bets on system 7 and they end up with a brand new system that is a mix of 7-22 but isn’t really 7-22! 

The other issue with doing this is the fact you are ignoring all the work I’ve done to get the AH returns.  I know AH bets aren’t everyone’s cup of tea (I still get the odd comment asking what the hell they are!) but for those that understand AH betting and how it can be used (I’d never struck an AH bet before until last season if I’m honest, so I came to it new), then it can be quite powerful.  I think AH is a great way to manage your exposure and as we’ve seen already through various postings on the blog, it can be used to increase your ROC by reducing the maximum drawdowns your system or portfolio suffers.

Right, the question that I’m supposed to be answering in this post was asked by Ingus and Rowan and it’s been mentioned by a few others in emails over the Summer.

Ways to play 7/22 using AH betting – Is 2pts win on Homes, 1pt on AH0 Aways an optimal strategy?

As regular blog readers will know, I’ve already shown ways to play this system and I shared 9 ways that we can use system 7-22. I didn’t draw any meaningful conclusions though as I wanted to wait until the end of the season. As luck would have it, there were no more 7-22 bets after my last post, so the figures for the 9 ways haven’t changed by much! However, I’ve now looked at 20 ways to use system 7-22 and more importantly, I’ve split the conclusions down into two different bases. We have the conclusion based on all historical results but more importantly, we can also see the results based on live results only.

I personally always feel much more comfortable drawing conclusions from live results.  Admittedly, there are a lot less bets but as we know, system 7-22’s live results mirror the backtested results to a large degree, so I wouldn’t expect the conclusions to change much as we move from backtested to live results and vice versa. 

To get us started, here are the results for 20 ways to play system 7-22, ranked in order by ROC but for all 737 bets to date.

I think now we’ve ordered the results in this way, we can draw some pretty concrete conclusions quickly.
·         It is going to be MORE profitable in the long-run to play outright on Home bets
·         It is going to be LESS profitable in the long-run to play outright on Away bets
·         On Away bets, AH0 is better than AH0.25 and both are better than AH0.50
·         It is definitely NOT an optimal strategy to play 1pt win outright bets on all Home and Away bets
·         It is better staking more on Home bets outright than on Away bets generally
·         The OPTIMAL solution is 2pts on Home bets, 1pt AH0 on Away bets based on these 20 methods

I think the fact that you should play outright on Home bets and possibly stake more on Home bets isn’t a surprise. I had come to that conclusion myself early on and although I’d not acted on it as much as some subscribers did last season, it was something I was aware of.  Covering the draw on Homes can’t really be a good idea as you’re basically betting at long odds on which is never going to make you much money!
The first thing that strikes me from looking at this table is how poorly the performance is from simply having 1pt win on all Home and Away bets outright. Out of 20 ways to play the system I’ve shown, it is only the 16th best. Hence, did all of you using this strategy know it was only the 16th best way to play the system historically?  No, me neither! The system with the 2nd best ROI is actually the 16th best based on ROC calculations.  (If there was ever a system that proves my point I made in the SBC forum about how wrong it is to base investment decisions solely on ROI, this is it!)

I’m shocked at how much better it is to use AH on Away bets rather than backing outright. Clearly, you give up a lot of ROI by doing this but if you adjust your betting bank accordingly for the reduced risk, you’re much better off.

Interestingly, having come to the conclusion that backing outright wasn’t optimal on Aways, I find it interesting that AH0 is better than AH0.25 and AH0.50. Hence, the conclusion appears to be that you need some draw coverage but if you go too far and take too much draw coverage, you end up eroding some of your edge.  Something to consider for all of us I think.

The question posed by Rowan and Ingus then was actually a great question in the sense they had both second guessed the correct answer! Of course, this is based on all bets, let’s take a look at live bets only.

Here’s the same results but based solely on live bets (201 of them to date):

Here’s some quick conclusions:

·         It is going to be MORE profitable in the long-run to play outright on Home bets
·         It is going to be LESS profitable in the long-run to play outright on Away bets
·         On Away bets, AH0.25 is better than AH0 and both are better than AH0.50
·         It is definitely NOT an optimal strategy to play 1pt win outright bets on all Home and Away bets
·         It is better staking more on Home bets outright than on Away bets generally
·         The OPTIMAL solution is 2pts on Home bets, 1pt AH0.25 on Away bets based on these 20 methods

I feel like it’s a game of spot the difference here but the ONLY difference I can see is that AH0.25 on Aways is better than AH0.  Why is this? Well, quite simply, since the system went live, there has been more draws for the Aways than I’d normally expect and this has meant that increasing the draw coverage by a little more definitely helps.  However, looking at it, there isn’t much between AH0 and AH0.25 at all.

So, I think that answers the question that was posed regarding system 7-22.  For those following systems other than system 7-22 (will be majority of people I expect), think about some of the learnings we can take from this system and what impact it could have on your portfolio betting.

I should add that I don’t expect anyone to come up with an optimal betting portfolio that generates 200%+ ROC figures year on year. That’s not going to happen. What we all have to do is come up with a betting portfolio that we believe in and one that we are comfortable following.  I personally played higher stakes on Homes and used AH on some Aways last season as it was what I was comfortable doing. It wasn’t based on hours and hours of analysis and all I did was come up with an idea for a staking plan, backtested it, liked what I saw and decided to go with that.

That’s the sort of help I’m going to be giving to anyone who wants it this Summer. What I won’t be doing is looking at 10,000 different combinations of system portfolios and staking plans and telling them which one is best! People can come to me with an idea, I’ll look at it, share some results and they can decide if they like it or if they want to tweak it. 

If people come to me with no idea about which systems to follow, I’ll point them in the direction of something that I think may suit their needs based on what I know about them but as I’ll be making crystal clear to anyone who asks me for advice, I won’t be held responsible for the performance of their portfolio.  Everyone with the service is responsible for their own portfolio performance and if they choose to take some of my advice on board and it turns out badly when others are doing well, then so be it. They shouldn’t have listened to me!

TFA caveat – All betting banks shown in these examples are based on two times the maximum drawdown.  If anyone really believes we have witnessed the maximum drawdown on some of these betting methods, I can guarantee that they are mistaken.  No way would I recommend anyone try to follow one of these methods next season based on a betting bank of 14pts or 15pts.  When you think that’s only 7 Home bets losing, it’s not a lot at all. Average Home bets could be 6/4 and there is a high chance of losing 7 bets in a row at these odds, so these betting banks stated are only for information purposes. They are consistent across each system, so the ROC order is valid, it’s the size of the ROC that may be overstated!

Tuesday, 17 July 2012

What does system 6-21 bring to the party?

I think the next post is an important post. One thing that a few people have said to me over the Summer and even before the last season ended was that they were going to be dropping system 6-21 and simply following the other 5 combined systems.  I think the general consensus was that system 6-21 has a lot of bets and makes the combined systems quite tough to follow over the season due to the additional workload but at the end of the day, it doesn’t actually increase your profitability too much.  Is this true or is it the case that system 6-21 actually helps smooth the P&L in the long-run and importantly, provides an additional number of bets that allow you to increase your ROC than just following systems 6-22 to 8-22?

I’ll be honest and say when I started looking at this, I sort of hoped the second thing was true.  I hoped the additional bets provided by system 6-21 did increase your ROC even though I appreciate following system 6-21 reduces your overall ROI.  If this wasn’t true, then I feel a little bit of a fool for suggesting people follow the 6 combined systems when they could have followed 50% fewer bets and made a similar level of return from doing so.

To be fair, the first person who asked me to look at this was Les. I think I paraphrased his question but here’s what I think he asked in essence.

What does 6-21 add to the 6 combined systems? Does dropping 6-21 improve performance without increasing any variance?

I should also add that Alvin, Gary and Grant have had similar discussions with me about this or have asked me to look at this when I had time.

The issue with answering something like this is that there is never going to be a perfect answer. I know many of the subscribers last season used variable staking plans on Homes and Aways, some followed Homes outright and covered the Aways with draws etc. and therefore, I can never answer a question like this unless I take it at a very high level and assume we’re all playing 1pt on every bet and if we choose to follow an Asian Handicap route, we do so for all bets, even though we know AH isn’t an optimal solution for Home bets.  Hence, any conclusion isn’t perfect but as always, this blog is only my take on things and I’m sure if you asked 100 analysts to do this piece of work, we’d all end up with different ways of looking at the problem and difference answers.

I’ll paste the workings first and then discuss how I have approached answering this.  As I say, no answer is perfect but I think my conclusion is probably correct but I’m sure someone will pick me up on it if they think I’ve looked at it wrongly.

Here’s the summary I’ve come up with:
The first thing to point out is that the summary is very basic.  I make no apologies for this and it’s linked to my point above. If I try to make this more complicated, it would muddy the conclusion and if people want, they can do their own in depth analysis of the data and come up with their own conclusions.

So, what we have here is a table showing the profitability by season for the 6 combined systems and the 5 combined systems.  You’ll be familiar with these P&L tables by now on the blog!

Underneath each table, I have stated what the max drawdown is for each betting method (outright and the 3 Asian handicaps).  I have again suggested that a doubling of the max drawdown would be a proxy for the betting bank required. People pick me up on this all the time but in all my time betting, assuming you have a decent sample of data to work from, I usually find this is as good as any sophisticated mathematical formulae based on strike rate and expected returns. We all know we haven’t had the worst historical drawdown yet and to understand this, you would have to run a Monte-Carol simulation but as I say, if you double the historical drawdown of thousands of results, you never end up too far away from the right answer.

Now that we know the betting bank and returns for each betting method for each season, it’s simply a case of putting these into a table and calculating the ROC under each scenario. It is shown in the picture above but here are the two tables next to one another.

The first thing that jumps off the page when I looked at this was how similar the returns are for each method and each season.  I’d ask everyone to put more weight on the most recent two seasons since these are live results and beyond that, the previous two seasons as these are fully backtested results. The first two seasons are the least reliable and being honest, the ROCs are overstated due to an element of backfitting involved in both seasons.

If you look at it, it’s safe to say there isn’t much in it. The figures at the bottom in red let you know which portfolio is better. Anything below 100% means the 6 systems are better and anything above 100% means the 5 systems are better.

If we take it one season at a time.

Last season has the biggest discrepancy.  This is because system 6-21 had an obscene number of bets and I would have expected the ROC to be better if you include system 6-21 in the portfolio.  The previous season wasn’t as clear cut and you would have to say that the 5 systems were slightly better overall under every betting method.

If you look at the previous two seasons, you would again favour the 6 systems on every method. The first two seasons tend to favour the 5 systems for AH betting and the 6 systems for outright betting but I’d not pay too much attention to this.

At the overall level, you’d say that you would expect the ROC from following the 6 systems to be around 5%-10% better than the returns from following 5 systems.  As you use AH more, the gap narrows. If anyone is using a combination of outright betting on Homes and AH betting on Aways, I think you’ll find there isn’t much in it at all at the overall level.

Of course, next season is more likely to be like the 2011/12 season than any other season, so this does lead me to believe that following the 6 systems would be slightly better than following the 5 systems. However, I wouldn’t bet that system 6-21 would have quite as many bets next season and therefore, I would expect the gap to narrow between both methods anyway.

One very important piece of analysis that is missing from all of this is simply the number of bets.  Yes, it may be the case that following all 6 systems gives you a 5%-10% higher ROC but is it really worth the time and effort?

Well, if we look at last season, dropping 6-21 halved the number of bets you would be having during the season. Hence, although you would have ended up with a lower ROC, you would have halved the time it takes to follow the systems.  How much is your time worth compared to 10% of an increase in ROC?

In summary then, I would say there isn’t much in it between following all 5 systems and all 6 systems based on past performance.  I would expect following all 6 systems would lead to a slightly higher ROC than following 5 systems but then again, you would save a lot of time and effort only following 5 systems, rather than 6, given 6-21 has a lot of bets that appear on that system and that system only in the combined systems.

To answer the question that was posed to me, I believe system 6-21 does add a little to the ROC in the long-run but it should be weighed up against the time you’d save by not following it.  I don’t believe dropping 6-21 would improve the performance of the portfolio (improves the ROI but not the ROC) but importantly, dropping system 6-21 doesn’t appear to bring in any additional variance, so there is no increase in risk from doing so.  Hence, whether you follow 6-21 or not as part of the combined systems portfolio is solely down to the individual following. 

Hopefully people are enjoying these brief discussion topics and it’s whetting their appetite for building their portfolio of systems to follow next season!

League Two Aways

One of the things I wanted to look at this Summer for myself was what has happened in League Two Aways over the last couple of seasons. As I was working through the system reviews earlier this Summer, picking out the poor performance of the League Two Aways was a consistent theme across most of the reviews. I’d mentioned in a good number of reviews that the systems had lost for the last couple of seasons in this league and therefore, it was probably worth seriously considering doing something with the draw coverage in this league next season if you believe the results for the last couple of seasons.

Before I look at the results, I think this last point is something worth considering for a moment. One thing I have discussed a lot on the blog over the last two seasons has been the use of draw coverage. It’s important that people understand exactly what I mean by this.

Long-term, covering the draw when betting on football matches has to lead to a lower profit than backing outright. If this wasn’t true and you believed you can make a higher profit covering the draw, then I suggest that you’ve stumbled across a very good draw system and I’d forget about backing the selection to win and just back them to draw!

I see draw coverage as a way to minimise the risk, not as a way of maximising profits. Of course, if we look at a sample of results, we will maybe see a better profit being made from covering the draw but ultimately, linked to my previous point, if you really believe you can beat the outright returns, then just back the selection to draw!

I think at times, people look at the returns for AH0, AH0.25 and AH0.50, do a quick comparison with the ROI of backing outright and then come to a very quick conclusion that covering the draw is wasting your time as it erodes your edge. This of course may be true but similarly, ROI isn’t the way to judge whether draw coverage is useful or not. What you really want to analyse is whether using a form of AH can reduce your variance (risk or max drawdown are similar terms I could have inserted here) and if this is true, then it may actually be the case that by covering the draw, you reduce the betting bank needed to follow the system, thus increasing your ROC and ultimately, it may even end up in the situation where you can achieve a better ROC from covering the draw, than from not covering the draw.

Without going into ROC calculations in too much depth, here are the results of League Two Aways for the past 6 seasons.

As you can see, a 14.4% profit from backing outright and a profit of only 9.4% for backing AH0.50.  Clearly, betting on these selections outright is a much better strategy isn’t it?

Well, the drawdown for backing outright is 5 times the drawdown of using AH0.50.  Therefore, if you want to achieve the same ROC under both methods, you need to achieve 5 times the ROI on backing outright as compared to using AH0.5.  Clearly, it isn’t 5 times as profitable and therefore, AH0.50 is a much better strategy.

Conscious of the fact that not everyone gets ROC calcs as a way to compare systems, so let’s walk through a very quick example.

The max drawdown for outright is 250pts.  The max drawdown for AH0.5 is 50pts.  Outright has generated 401.8pts profit and AH0.5 has generated 262.5pts profit.

Assuming a starting bank of £10k and assuming you need to hold two times the max drawdown as a betting bank.

Outright betting

£10k bank, split into 500pts gives a stake of £20 per point.  This generates a profit of 401.8*£20=£8,036 profit on your £10k bank.

AH0.50 betting

£10k bank, split into 100pts gives a stake of £100 per point. This generates a profit of 262.5*£100=£26,250 profit on your £10k bank.

In this very basic example, we can see that betting using AH0.50 generates 3 times the profit from backing outright, even though backing outright has a higher ROI and a higher pts profit. In my opinion, as I’ve said in the SBC forum this Summer, anyone who is basing investment decisions on ROI and pts profit is missing the fact that not all investments carry the same risk and therefore, without taking into account the betting bank needed, you can get the wrong conclusion using ROI and pts profit.

Anyway, I’ve got side tracked here but it is an important concept. Anyone following my footie systems needs to be making decisions based on ROC and not ROI! It’s like when I see people discuss racing services or golf services and the fact they’ve made 20% ROI or 100pts profit. I always ask what bank they needed and they say 250pts. I say, wow, 100pts from a 250pt betting bank. 40% ROC. I’ve maybe only got 15-20 football systems that generate better profits than that! Still, you can’t make good money from betting on low odds footie games can you? ;)

Sorry, side tracked again!

Right, back to that table above.  Not really a pretty sight is it for the last 3 seasons? 

I personally believe that it is very unlikely that my ratings work in every other league and they don’t work for League Two. I don’t buy into this at the moment and believe it must be down to variance. The fact that the AH0.50 makes a profit every season for the last 3 seasons shows that there are a high number of draws. Out of curiosity, I’ve looked at the split between each result in a table here.

The selection is down the side, with the result of the game along the top. 

Two things to highlight.

Firstly, you don’t need to be a great analyst to know that when the selections have a draw % of 43.5% in a season, you are going to lose money backing outright. This happened in the 2010/11 season. A loss of 111.7pts from  492 selections is a sorry tale but then again, an 11.6% profit for AH0.5 tells its own story.  I don’t know the chances of hitting a 43.5% strike rate on draws over a sample of 492 bets but let’s assume the average odds were 5/2. That’s a substantial profit from backing the draw and ultimately, if the system was as good at picking draws as it appeared in that season, I’d be onto something!

Last season, the draw % was lower but interestingly, the average odds of the selections was much higher.  The actual % of away winners was much in line with the previous seasons but there weren’t so many draws. Even still, the system managed to turn around the deficit and post a profit using AH0.5.

Rightly or wrongly, I’ve got it in my head with my ratings that when they are taking on odds on teams at home by backing bigger priced aways, if the game is a draw, I feel like my ratings are doing their job. They are opposing a falsely priced favourite and although the selection hasn’t won, neither has the favourite.

If the ratings are making a small profit from laying the odds on favourite at home, there is not far to go to be making a big profit from backing these selections to win.

Last season, the average odds were nearly 3/1.  Therefore, every time a game finished as a draw, it was very close to being a 4pt swing. A 3pt profit was turned into a 1pt loss. Hence, it doesn’t actually take very many games to go your way where the selection hits another goal and a draw becomes a win.

Of course, I could just be sitting here with blinkered vision and if a few of these draws had been defeats, I’d be looking at a different story but when the ratings are making money every season from laying the odds on favourites at home in this league, it doesn’t take much for the system to suddenly start making profits, and big profits at that by backing the outsider.

That’s my take on the League Two Aways. Yes, it’s frustrating that they haven’t been profitable thus far but they aren’t far off from being profitable. They say stats don’t lie but in this case, I think a loss of 183.5pts across 3 seasons is misleading when AH0.50 made a profit of 69.9pts across the same period. That’s a massive swing and I think it shows the ratings aren’t as far off as it appears in this league.

Will they get the breaks next season? Well, I can’t be sure and as I’ve said during many of the system reviews, I wouldn’t put anyone off covering the draw on the Aways in this league next season. Even if the selections start winning next season, you’ll still be likely to make a profit even though you are covering the draw but it just won’t be the same level of profit as backing outright.

However, in some circumstances, trying to minimise your downside is almost as important as maximising your profits and I feel this is probably true for League Two.  Of course, you can go one step further and just ignore all Away bets in League Two but I think this is a bit extreme considering it has been shown that covering the draw can minimise your risk and if the ratings do get a bit of luck next season and hit more big priced Away winners, you’ll be able to capitalise on this and make some profits.