Tuesday, 17 July 2012

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.

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