streak probabilities

In the MLB picks thread I have been making daily selections using the M/L. On 06/14 i made a rather significant change to the formula that I use. Since that date I have noticed an unusual trend and was wondering whether it is as unusual as I think it is. What would be the probabilities? Here is what has occured to date, by day:
6/14/2012 Win
6/15/2012 No picks
6/16/2012 Loss
6/17/2012 Win
6/18/2012 Win
6/19/2012 Win
6/20/2012 Win
6/21/2012 Loss
6/22/2012 No picks
6/23/2012 Win
6/24/2012 Loss
6/25/2012 Loss
6/26/2012 Loss
6/27/2012 Loss
6/28/2012 Win
6/29/2012 Win
6/30/2012 Win
7/1/2012 Win
7/2/2012 Loss
7/3/2012 Loss
7/4/2012 Loss
7/5/2012 Loss
7/6/2012 Win

Within this short time frame of 23 days, there have been 4 instances of consecutive 4 day streaks. And they have alternated. The first 4 day streak was a winning streak. The 2nd. 4 day run was a losing streak. The 3rd. 4 day run was a winning streak and the most current was a 4 day losing streak.

So, 2 questions, how do I calculate the odds of this occuring? Secondly, what are the chances that today is another winning day?

Don't worry about it, the streak ends today!

I'll tell you what Buzz, I think it is probable that today is a winning day. So, here's a simple wager for you. If you're right and I have a losing day today, then I will end each of my posts, for the next week, with "Buzz Paff is almost always right". However, if my picks end up with a winning day then you will agree to end each of your posts, for the next week, with "steeldco sure works at his stuff and is probably going to succeed".

What do you say?

Sounds fair to me steeldco. My dad never raised any sissies. LOL

From the 150+ books that I have read on this subject, the past has nothing to do with the future regarding a coin flip analogy. I would not make this comment if we were counting cards and the deck was plus or minus. In that event, the past would have a mathematical effect on the future

Regarding betting on sports, the odds of you winning on a particular day would be dependant of the true odds of that, or those, teams winning.

Your record posted is well within variance, flucuation, and standard deviation.

Can anyone expound?

bigpete, thanks for the response. The pattern posted is well within variance, fluctuation, and standard deviation? I would never thought that. I look at what has occurred and I see 4 runs of 4 day streaks, having alternated from won to loss to win to loss, over a 22 day period. That would seem highly improbable (not impossible) to have occurred.

You also commented that "winning on a particular day would be dependant of the true odds of that, or those, teams winning". I didn't publish simply games won or lost. I published days on which there was a net win using imaginary units. For example, there may have been days where the picks were .500 but I ended up with a net win because of having taken underdogs. I am working on a process to pick games, taking into consideration the odds on that day. I hope that what I just stated makes some sense...............I'm sure it did. I may need to start cocktail hour early.............

bigpete, thanks for the response. The pattern posted is well within variance, fluctuation, and standard deviation? I would never thought that. I look at what has occurred and I see 4 runs of 4 day streaks, having alternated from won to loss to win to loss, over a 22 day period. That would seem highly improbable (not impossible) to have occurred.

You also commented that "winning on a particular day would be dependant of the true odds of that, or those, teams winning". I didn't publish simply games won or lost. I published days on which there was a net win using imaginary units. For example, there may have been days where the picks were .500 but I ended up with a net win because of having taken underdogs. I am working on a process to pick games, taking into consideration the odds on that day. I hope that what I just stated makes some sense...............I'm sure it did. I may need to start cocktail hour early.............

Steeldco,

You had to mention Happy Hour!! :-). I am Irish and off to buy a nice bottle of red wine. When you are in the mood to read, look at my next post. It is an article that I wrote. Feel free ask any questions as long as it does not involve complicated math.

Cheers,

Big Pete

Sports Betting as a Business

Probably the least understood aspect of successful sports betting is related to money management. Money management is just as important as handicapping when it comes to having a profitable season. Sheer odds will dictate that everybody will pick winning teams on occasion, but not everybody knows how to manage their money in a manner that will maximize profits or minimize losses.

There are two things that are mandatory to make money betting sports:

1. Money Management
2. Handicappers that are plus expected value

For anyone new to this industry, it requires a win rate of 52.38% to break even at -110 to win 100.

The following is based on a gambling bankroll of $35,000. If your bankroll is $3,500 just drop one zero.

Betting $5,000 a day, everyday. $1,000 a game, 5 games if, and only if, you have + expected value games. Bet less money per game if more games are bet per day, same results. Risking roughly 15% of bankroll each day.

Here are the numbers over 60 days (60 days x 5 games):

300 bets @ 55%

165 wins
135 losses

$300,000 wagered:

$165,000 won
$135,000 lost
$30,000 net before juice
$13,500 10% juice
$16,500 net after 60 days @ 55%

Based on the above numbers, it would take approximately 4 months to be ahead $33,000. Basically, doubling every 4 months, not taking out any profit.

If you get less than 5 games a day from your handicapper or his winning percentage is lower than 55%, it will take you longer than 4 months to double your bankroll. If you are not getting 55% + from your handicapper, you should start shopping for one that will produce these numbers, or better, over long term.
For a more aggressive investor, here are some other numbers to look at if 10 (plus expected value) wagers present themselves in one day:

The following is also based on a gambling bankroll of $35,000.

Betting $10,000 a day, everyday, $1,000 a game, 10 games if, and only if, you have plus expected value games. Bet less money per game if more games are bet per day, same results. Risking roughly 30% of bankroll each day.

Here are the numbers over 30 days (30 days x 10 games):

300 bets @ 55%

165 wins
135 losses

$300,000 wagered:

$165,000 won
$135,000 lost
$30,000 net before juice
$13,500 10% juice
$16,500 net after 30 days @ 55%


Based on the above numbers, it would take approximately 2 months to be ahead $33,000. Basically, doubling every 2 months, not taking out any profit.

If you decide on betting 10 games a day and have a limited bankroll, I would suggest that you make half bets for 60 days to build your bankroll just to be safe. That would be 1.5% of your bankroll per bet.

If your goal is to get rich, you will need to treat sports betting as a business. You will need to keep a separate bankroll and increase your bet size as your bankroll grows.

Let’s use the above mentioned numbers and look at this project long term. Plan on doubling your bankroll 3 times. At that point, your bet size will be $8,000 per wager and you would have grown your bankroll from $35,000 to $280,000. You can wager $40,000 per day and still be well under the proper percentage bet size for Kelly Criterion. If your handicappers are doing their job and your single bet size is $8,000, you will have a very strong income.

The average bet size recommended by most professionals is 2-3% maximum per bet and a maximum bet of 10-15% per betting period. That can mean that if early games are completed before the late games, there can be up to 20-30% of bankroll bet per day.
Here are some other numbers to consider if someone were to make 4-10 wagers each day for 365 days. Using the coin flip analogy of a 50% win rate (instead of 55%), the odds of winning, or losing, 4 out of 4 games is roughly 6%. Betting 4 games every day would result in roughly 22 days of winning, or losing, all 4 bets in one year. Not an uncommon event, mathematically.

Anyone that places wagers should understand this for several reason. One reason would be to manage bet size. The other reason would be to not get real upset on losing days nor elated on winning days. Over the long run, you would win 4 out of 4 games 11 times a year and lose 4 out of 4 games 11 times.

FYI, here are the rough odds on winning or losing all 3-10 games basing winning percentage at a conservative 50% win rate instead of 55%. It helps to put money mgt. in perspective and to realize that you can only have a certain percentage of your bankroll wagered at one time period. You can expect to win, or lose, all of your wagers accordingly:

1. 3 games: 12.5%

2. 4 games: 6.25%

3. 5 games: roughly 3 %

4. 6 games: roughly 1.5%

5. 7 games: roughly .75%

6. 8 games: roughly .4%

7. 9 games: roughly .2%

8. 10 games: roughly .1%

Do not concern yourself with daily figures as much as with monthly figures. You will have a lot of winning days and a lot of losing days. Even world famous sports bettor Billy Walters has losing days and months. The S + P stock index chart did not go up at a 45 degree angle without plenty of dips. You want your bankroll to grow but a little choppy is to be expected.

The following is the percentage advantage of different winning percentages:

52.5% .25%

53.0% 1.30%

53.5% 2.35%

54.0% 3.40%

54.5% 4.45%

55.0% 5.50%

55.5% 6.55%

56.0% 7.60%

There is one other point that should be mentioned here. In gambling, mathematics and statistics, numbers can vary greatly over the short term. The terms used for this are variance, fluctuation or standard deviation. The results of this, short term, can and will, result in a higher percentage of losses or wins.

Worst Case Scenario

Every long term successful gambler and investor prepares for the worst case scenario because negative standard deviation is going to rear its ugly head at some point. Investors may remember Long Term Capital Management (LTCM). John Meriwether started this Hedge Fund in 1993. This fund was hugely successful for years until negative fluctuation came into play. LTCM lost more than a billion dollars and almost 90% of the funds capital.

Jeffrey Ma, M.I.T. graduate and author of “The House Advantage” always had his blackjack team make optimal bet size based on worst case scenario. Mr. Ma, and team, managed to make more than a million dollars without the stress or risk of going broke by making wagers larger than their bankroll allows.

There was a time in 1989 when I was playing blackjack and doing very well. On one trip to Atlantic City, I had won quite a few sessions and was up $8,000. Then, the wrong side of variance appeared. I lost at least 10 of the next sessions. I turned a winning trip into a losing one. I now avoid that by using a “stop win.” I would have stopped playing on that trip with a plus $5,000 if I knew what I know now. I also wrote Blackjack Super-System.

More currently in basketball, I was handicapping NBA and did well for the 2011-2012 season. I started using the same filters for WNBA and started to win. Then, the tide turned once again. I went 1-2 one day and lost the next 9 games. As soon as I went negative for one game, meaning 3-4, I quit betting and just monitored the other losing games.


Here is one filter that you can use if you pay for or monitor a handicappers picks. If that person goes negative for one game, quit making bets on that handicapper until they have been monitored for at least 100 picks and come out at least 55%. The only exception to that rule would be if the handicapper had a long winning track record and was using sound statistics in making his choices giving you a mathematical advantage. Doctor Bob, who is arguably one of the worlds most famous handicappers, told his clients to keep betting his picks even when he was going through and awful string of loses. Doctor Bob was correct as he is one of the few handicappers that have a proven track record. To quote Doctor Bob “even a 56-60% handicapper can run 8-30.”

The examples of losing streaks (standard deviation, negative fluctuation, variance) can go on and on for pages. If you want to be a long term successful sports bettor, size your bets so that you can weather the storm and come out intact. This will allow you to be a winner in the long term along with the benefit of less stress.

There are at least nine different sports that you can wager on:

1. NBA
2. NCAAB
3. NFL
4. NCAAF
5. MLB
6. Soccer
7. NHL
8. Golf
9. Tennis

You should expect to get 5-25 single net unit bets, after juice, from your handicappers. One may have a small loss or a break even year. You can expect that. Even the best run cool or cold. Consider keeping that handicapper if he has a great long term track record. The handicappers that do not perform long term need to go. Feel free to fire handicappers that do not perform long term. I have fired plenty. This a handicapping and money management contest, not who has the biggest brain. You now have the money management information so it boils down to a handicapping contest. Also, there will be a cost of the handicapper(s) to be figured into your business expenses.

Betting tips:

1. A very important aspect of betting on sports is shopping for the best number. There will be more discrepancy in the numbers on different sports at different sports books. The NFL, for example, will have very similar numbers at most of the betting shops you visit. On college sports and daily events like the NBA, you will be able to find different lines at different sports books. These books change their numbers according to the betting patterns of their customers, so it is not entirely uncommon a half point to three point differences in the lines. When you are betting your hard earned money, getting the best line is a top priority.

2. The sharp bettors tend to bet underdogs, and they tend to bet them early. Squares usually bet later in the day (or week, for football) and they tend to pick the favorites. If you like an underdog, it is best to get your bet in as late as possible, where there is heavy action from squares on favorites. If you are going to go with a favorite, it is best to place your bet early in the week when the Pros are laying heavy money on the points. Not all games work according to this formula, but it is usually a good rule of thumb.

3. There will be a lot of games that you will be betting a small underdog and getting points. You might have the option of taking the points or betting the money line. For example in the NFL, a 3 three point underdog will be priced at about +140 on the money line versus -110 to win 100 if you take three points. That is a huge price difference. Historically, the point spread matters in only 16% of the games.

4. Unless you are already rich, I would suggest that you keep your day job until your bankroll gets so big that it makes more sense to find the best line than go to work. Everyone has monthly expenses and you do not need the strain of living off winnings from a small bankroll. The people that do not compound will not get rich. Do not dip into your gambling bankroll until it is huge.

5. Beware of handicappers stating a win rate over 60%. It is improbable that a handicapper can do any better than 60% over 1000+ wagers. There might be a rare few. Most professional gamblers expect 55%-58% and are ecstatic if a handicapper does any better than that. There is a lot of false advertising with handicappers (touts and tout services).

If you are interested in getting rich betting sports, manage your money perfectly and have plus expected value handicappers. Then, double your bankroll repeatedly. Billy Walters did it and you can do it too. Warren Buffett did it in stocks at a much slower rate. Just do it with laser focus and do not let anything get in your way.

i would like to read this but come on man!
i wish there was a 250 word limit to posts.
no need to post this opus in multiple threads.

Quote: bigpete88

For anyone new to this industry, it requires a win rate of 52.38% to break even at -110 to win 100.

300 bets @ 55%

OK.
The problem is all cappers are around the 52.08% mark.

Remember the best liars in the universe are poker players, politicians, craps players and sports cappers - not in any particular order. They can all fight it out for top liar.

55% win rate?
Good Luck as the OP was and has grand illusions of over 70% WR.
Dream on.

Those that do that year after year, pick at good 53% to 55% win rates, have a very small circle of friends that know about it.
Unless you do the capping yourself.
That way they do not move the line when EF Hutton speaks.

What is as important as the win rate is the variance, the bet size to the bankroll (yeah all the MM stuff) and the proper bankroll to the bet size.
Did I forget to mention the proper bankroll?

I keep my winning 54.2% bets to myself.
Yeah, sometimes my BIL wears me down and I tell him my pick, most times not.

cappers and wall street traders make money by the volume of trades or bets.
So what if the client loses money.
It will happen.
Everyone dumps in the toilet. Nothing new.
That is investing... gambling.

Office closes down, a new one opens up.
65% trade wins here.
Get your money in

Quote7craps: problem is all cappers are around the 52.08% mark.

7craps,

Like the rare winning Hedge Fund Manager and great stock pickers, there are few handicappers that are better than break even. You mention the average at 52.08%. If that number is close, and it may be, it figures in thousands of cappers at 50% and a handful at 55% +. I would further state that most handicappers are not worth the time of a free pick as it diverts your time and resources for a break or even or loss.

True sports betting winners, or handicappers, as rare as they are, make their own line and only bet when the line is off. Some use a situational situational and that I do not follow.

You mention that you are at a 54.2% win rate. Keep up the good work!! If you are betting with reduced juice, you can do as well as the numbers in my post as break even with -105 to win 100 is 51.22%.

Good Luck!!

Big Pete

Buzz, the streak did end yesterday.

Buzz Paff is almost always right!

Thanks to everyone for their responses. However, I'm still searching for an answer to one of the questions that I posed. Let me rephrase it.
What are the odds, if we were to flip a coin 23 times, that there would be 4 instances of heads or tails coming up in consecutive flips, and in an alternate fashion, i.e, heads then tails then heads then tails.

Buzz Paff is almost always right!

"that there would be 4 instances of heads or tails coming up in consecutive flips" should have been stated as "that there would be 4 instances of heads or tails coming up in 4 consecutive flips".

Something seems to me missing from this last post. LOL

"I now avoid that using a stop win"
This is nonsense if the game is good you keep playing,unless the game goes bad or conditions change or there are heat concerns,using a stop win or loss can be shown to overall decrease your win rate. If you are not a winning player then by all means use a stop win or loss,the less time you play the better.
What is next a link to your super system.

"that there would be 4 instances of heads or tails coming up in consecutive flips" should have been stated as "that there would be 4 instances of heads or tails coming up in 4 consecutive flips".

SHOULD HAVE STATED..................
"that there would be 4 instances of heads or tails coming up in consecutive flips" should have been stated as "that there would be 4 instances of heads or tails coming up in 4 consecutive flips".

Also, Buzz Paff is almost always right!

I am now declaring Cocktail Hour!