One of the
things I was keen on this Summer was to try to tap into the vast experience of
some of my subscribers. A few people offered up potential ideas for posts but I
decided to take a new subscriber up on his offer of a blog post as although
this subscriber had no experience of TFA, he had plenty of experience of football
systems, poker and bank management and I thought it would make a change to hear
from a new TFA user about how he plans to use the systems.
The brains
behind the post is one of the authors behind the very interesting and useful
site pokersunited. You can
also follow at @pokersunited on Twitter.
I hope you enjoy
the read and thanks again for taking the time to write this post @pokersunited. :)
...............................................................................................................................................................
As a first time
TFA user and former poker professional, Graeme asked me to write a blog post
about my approach to TFA systems as it might be slightly different than the way
most other people use the service. As a poker player, I’m a very
risk-orientated person and have learned that the most important factor when
gambling (with a positive expectation!) is money management.
Poker/sportsbetting/investing
are all kind of similar in a way that you can make good decisions, but still
lose money. The utmost important thing is to minimize the risk of going broke
to as close to 0% as possible. As a poker player who has played probably close
to 10 million hands, I know a thing or two about variance.
So just like in
poker, my main concern when sports betting, is how to minimize the risk of
wiping out my bankroll in a bad run. That doesn't even mean the chance on going
broke right away in a bad run, but even losing 75% of a betting/poker roll is a
killing for me.
Sports betting
has always been a sort of hobby for me next to poker, but over the last year it
has turned around and my main focus is on sports betting as poker has changed a
lot since black Friday and playing at nights isn't recommended with children. :)
I found my way
into sports betting by first betting games in my own league (Dutch Eredivisie),
but last year I discovered blogabet and started following (a lot) of tippers.
But as most reading this probably have discovered, there is a lot of garbage in
tippers, almost all are looking for a quick buck and do not really understand
what sports betting is about. It made me clear that next season should be about
quality picks (tippers) and not quantity.
Somewhere last
year I discovered Steve’s blog (daily25.com) and through him I found out about TFA.
Despite reading about his bad run with TFA I knew that TFA would be one of my
(max) 5 services I would follow. Graeme seems to know what he's talking about
and I really like the idea of betting through systems and get the emotion out
of it.
The first thing
I did was analyse all the bets from TFA and thinking about a smart way to make
a selection from all those different systems.
Right from the
start I didn't like the idea of having to choose a couple of systems and blaming
myself at the end of the season picking the wrong ones (like the whole TFA
<> Daily25 discussion).
So I had to find
a different way of betting with TFA than the portfolio approach....
Risk
management
What surprised
me most when reading Steve's and Sportingvalue’s blog (2 TFA users) was that both had weekends were
they had huge bets on one (or even more) games, sometimes up to 9% of their
roll (Sportingvalue). How can that ever be justified from a risk perspective....??
So my TFA betting
portfolio won't ever be built up by choosing a couple of systems. It will be
based on unique picks with a certain value generated by all the systems. This
way I may have less picks and therefor a lower ROC, but my max drawdown will be
significantly lower than a combined portfolio with a lot of correlation (read:
double/triple staked picks).
From what I read
from Steve he is very focused on turnover/ROC, but what he has to remember is
that increasing turnover by picking a lot of double/triple staked picks is
nothing more than upping stakes and therefore, should be accompanied by a
higher bank size, which will neutralize the higher ROC he is aiming for.
To explain
myself further I did an analysis on Graeme's data and analysed 3 different
'portfolios':
1). Steve’s
portfolio from last year with all the correlating picks staked with the same
amount (I made no difference in home/away bets staking wise, I know Steve did,
but for this analysis I just use flat staking for all picks).
2). Steve’s
portfolio again but this time all correlating picks in different portfolios
will be staked just once (resulting in 1/3 of the number of picks in portfolio
1).
3). Not using a
portfolio of system but just betting all unique UK picks above a 3% TFA value.
When looking at
the past performance of Steve's portfolio, it's clear to see why Steve made the
choice for those systems. They've had an amazing year in 2012/2013, with a
combined 17.7% ROI, but also 2010/2011 had a 19.2% ROI and 2011/2012 wasn't
that shabby either with almost 10%.
The tricky thing
here is that a lot of people will see the 4000 picks/bets that were made during
that period (3 seasons) as quite a big sample, certainly big enough that it's
almost guaranteed making a healthy profit next season again. Well it would be
if those 4000 picks were actually unique ones.....the problem is, those 4000
bets are actually just 1200 unique picks and while 1200 is a nice sample, it's
certainly no guarantee that next season will be in the same range of 10-15%.
Now let’s look
at some stats about portfolio 1:
While the ROI is
the best over a 4-year period (10.5%), the maximum drawdown during this period
is a massive 157! points (in the 3 very good seasons before choosing this
portfolio it already had a 95! points drawdown, while those were obviously very
good seasons)
On average there
are 169 bets per month with an average profit of 17.76pts per month with this
portfolio. By calculating the standard deviation (46.2) we can make confidence
intervals for monthly results.
For portfolio 1
we can say that with 99% confidence the results in a month will be between -100
and +136 profit....It's clear that one needs a bank of at least 160 points
here, but 200 would be my advice at least (2 times the max loss in a month 1 in
100 times).
If we now
calculate ROC by advised bank sizes we can see that ROC has been 319.66% in 4
years. Not bad at all.
Now let’s
look at some stats about portfolio 2:
While the ROI is
slightly lower here with 9.4%, the maximum drawdown during this period is just
43.6 points (about 25% of portfolio 1). On average there are 54 bets per month
with an average profit of 5.07. By calculating the standard deviation (11.4) we
can make confidence intervals for monthly results.
For portfolio 2
we can say that with 99% confidence the results in a month will be between -24
and +34.4 profit....This leads to a minumum bank of at least 50.
If we then
calculate ROC by advised bank sizes we can see that ROC has been 364.95% in 4
years. So with much less picks (30% of portfolio 1), a lower ROI, we still have
a better ROC!
Basically we
save time/capital and stress by choosing a portfolio like this one above
portfolio 1.
Now let’s
look at some stats about portfolio 3:
This one has the
lowest ROI of the three with 7.4% , the maximum drawdown during this period is
just 32.8 points. On average there are 78 bets per month with an average profit
of 6.8. By calculating
the standard deviation (12.8) we can make confidence intervals for monthly
results.
For portfolio 3
we can say that with 99% confidence the results in a month will be between -26
and +40 profit....This leads to a minimum bank of at least 50 again.
If we then
calculate ROC by advised bank sizes we can see that ROC has been 409.71% in 4
years.
So what we see
is that the portfolio with the lowest ROI, has the best ROC. This is because it
has 40% more picks than system 2 and a lot better risk profile (resulting in a
lower bank needed) then portfolio 1.
With the
conclusions I make here I don't want to ruin Graeme's portfolio approach,
because I still think his idea is nice, I would just use his systems in
another way. My idea would be to make a couple of absolutely NON-correlated
portfolios namely: UK home, UK draw, UK away, EU home, EU draw, EU away and
maybe even something like away favourites/away outsiders or you name it.
Graeme could
then decide when to add a pick to UK aways, if it shows up in just 1 algorithm
or maybe only when it shows in 3 of them etc...?
In this way
there would be 10 portfolios at most, a lot less picks and swings and probably
more profitable and happy customers in the end :-)
