Here
are some thoughts on "randomness" that you
may find enlightening:
It
seems to me that the best approach is that of form
study using a problem solving model. This takes the
form of thinking about how an event might turn out
by using all available information, assessing it and
then assigning your own probabilities to the possible
outcomes of that event.
What really interested me about it was how your mind
can deceive you because it always looks for patterns
and logic even though the events are completely random.
I think the betting exchange and the 100% book has
caught out a lot of punters. It seems to work something
like this. You are lucky and get a lot of positive
results. Your mind adds two and two and you think
you have an edge because you are in front, laying
100/1 shots would be a good example of this. It goes
on for long enough and you develop the Messiah syndrome.
The inevitable happens and your results then fall
onto the negative side, as things start evening themselves
out a bit.
When you've blown your bank and a bit more, you (say)
something like .. "Betfair has ruined my life".
In fact all that has happened is that you have been
fooled by randomness and you never had an edge in
the first place. Obviously, things are more random
at lower chances of probability, so you are more likely
to be lucky/unlucky, than if you are at higher chances
of probability. Its interesting that the on-line hi/lo
games results are based on 300,000,000 games to generate
their results. These games are audited and are judged
to be ˜fair".
Horse racing is more of a closed universe in that
it has specific rules and the event type is repeated
daily, worldwide. So you have a chance of prediction
if you can pin down, prove and predict causation.
A system might have a provable cause ( as to why it
might work and when it won't work. Causation to me
has to be, which horse on the day has the speed, ability
and fitness to reach the winning line before the others.
It might still not be completely predictable as form
in the past is the past; fitness is not even fully
known by the trainer; the going might be totally different
from the advertised and the racing pace that dictates
the result is yet another estimate. At least you are
pointing your estimates in the same, consistent direction.
If you stick to one method then you can have a chance
of seeing how well it behaves, when it behaves well
and what random effects might apply. If you chop and
change every time a result does not go the way predicted
then no chance of learning anything. The method /
system is as random as the result. Being random means
that it is as unpredictable at low odds as for high
odds. So a hot favourite that breaks a blood vessel
for the first time can fail and can fail for many
other reasons that are ignored as unlikely in a single
event even if they do occur quite regularly over a
season.
It made me wonder if we overestimate/underestimate
probability and think, are the outcome of events less
predictable than we as estimators of probability assume.
Are we possibly putting a larger bias on certain factors
than we should, are these events more competitive
than we really want to believe? Ie:is that top class
horse giving weight to all his rivals up against today
or will his class still see him take the race, but
the probability, dominance he has is less than we,
the market assumes and therefore one or two of the
opposition has an higher probability of wining
Yes and no. If a horse has a 25% chance of winning,
it also has a 75% chance of losing. If we run that
over 100 races we would expect the horse to win 25
times and lose 75 times. But what if we don't get
exactly 25 winners? what if we get 23/77 split, could
we expect the next 100 to give us 27/73, or might
our split never reach parity in relation to its chance?
When all is said and done about pricing races, all
we are doing is glorified guesswork, based on what
has happened in the past. I am coming around to think
that we would be better thinking that odds should
have a +/- built in to their chances to cater for
luck.
For your example of the 25% true chance of winning
expecting to win 25 races in a 100:
The Bernoulli equation which is the basic formulae
for such random events gives the following probabilities
of wins in a 100 races:
15
wins 0.57%
20 wins 4.93%
25 wins 9.18%
30 wins 4.57%
35 wins 0.70%, and so on
You have to add up all the possibilities from 1 win
in a 100 to a 100 wins in a 100 to get 100%. The chance
of the "expected" 25 wins is only 9.18%,
when most people would believe it to be nearer 100%
- they would put money on it but again are fooled
by randomness. This may be where "luck"
in systems or pricing can be more rationally explained.
You can never really say a horse is 3/1 but you can
say
it is somewhere between 5/2 and 7/2 with some probability.
You cannot believe a horse is rated at exactly 100
but at best is rated somewhere between 95 and 105,
say. Your system which on average picks out 25 winners
in a 100 system race trial may only score 20 for the
next series of 100 races. Bad luck ?-. 30 wins - Good
Luck? No - absolutely nothing has changed - it is
just how probability works.
Good luck is when you are favoured quite randomly
by chance; bad luck when you are not. You can make
probability work for you by skewing the odds in your
favour but you have no control over luck or random
chance. The longer you play with odds in your favour,
the more likely you are to reduce the effects of luck.
Using Bernouilli's equation shows the expected probability
distribution is less skewed in proportion to the number
of trials. In other words, as you increase the number
of trials, you will find more values nearer to the
middle of the range.
I don't believe you can ever prove conclusively that
you have an edge in relation to betting on horses
or most other sports. If you were to bet on about
800 races and show a profit, I would accept that you
had an edge but someone else might accept a lesser
or greater number. Pedants might say that it can never
be proved because your next series of 800 bets might
wipe out those profits. Some will say that bookmakers(obviously)
enjoy an edge. While this is self-evident, it is possible
for them to lose over a period. Nothing is certain
where subjective probability and luck are concerned,
although we can make much more confident predictions
about things like cards and dice, where the parameters
are objective and well defined.
Even with cards, dice and roulette wheels(in particular),
computer simulations have shown that only in the
very long run do these probability distributions
hold true. People who have bet against the above
proposition have often gone broke.
The
next step in this discussion involves posing philosophical
questions such as:
given
the randomness of chance or luck(or its capricious
nature), how can we deal with it in our lives?
Successful
punters will have had to tackle this thorny question
to make any progress in their quest for the elusive
edge. I don't have any pat answer to this, but thinkers
from Socrates to Berlin have mused over similar
questions and generally concluded that knowledge
is the key while ignorance might be blissful for
most people who don't even want to think about it.
Know yourself, know the game, know statistics. With
all that knowledge you might just have the ghost
of a chance of getting that edge. Or, don't bother
about the edge.
Don't even think about it. Just enjoy the day with
all its surprises, then go to bed and forget about
it.
We looked at how even with a 100 bets at 3/1 the number
of winners was far more random than common sense expected.
If you look at 100 bets for each of the prices a system
might be used for eg 1/1, 5/4, 13/8 etc etc, say 50
prices then that means at least 5000 races to test.
To be more certain of any profitability it might mean
50,000 races, if you can find them. That means going
back years, when the racing factors, market and SP
calculation was quite different. So you never actually
arrive - system wise.
In
my opinion, you cannot quantify luck in horse racing
because races(and football games) are chaotic events
where so many expected and unexpected things can
happen. You are better off taking a long term view
in the hope that luck will even itself out. If you
do have that edge, you should be ahead of the game
eventually.
