Value is a topic that is often discussed in betting and yet seems to be the most miss-understood. This post is going to clear up any questions you may have.
The first thing to approach is the question…
Is it possible to make a profit without finding value?
And the quick answer is… no!
There is no possible way you can make a profit from your betting without finding value. But…
…that doesn’t mean that you have to be specifically looking for it.
Let me explain further.
The simplest way of explaining value is to use percentages. The odds a bookmaker, or betting exchange, offer you are a representation of what they think a horses chance of winning a race is.
To work out the percentage chance a bookmaker thinks a horse has of winning a race you simply take the number one, divide it by the decimal odds and then multiply by 100.
If the decimal odds were 3.75 then the sum would look like:
1 ÷ 3.75 = 0.27 x 100 = 27%
The bookmaker is saying they think the horse has a 27% chance of winning this race.
To keep the maths simple lets say that we use a betting system where we only bet on horses that have odds of 3.75, and we make a profit.
If we work out our betting systems strike rate and find it is 32% then we know we have value. Why?
Because the bookmaker is telling us our selections should only win 27% of the time, and are offering odds based on that, but we know we win 32% of the time and so the odds the bookmaker is offering us are higher than they should be.
Have we gone hunting for value? No.
We have inadvertently found value which is why we’re making a profit.
In the past on this blog people have argued that value doesn’t exist or is a concept that has been invented by tipsters, the main point being that you don’t need it to make a profit.
But I’m assuring you this is not the case. If you make a profit from your betting then you have found value, whether or not you realise it!
The problem in my above example is that we don’t only bet on horses that offer odds of 3.75. I know that and I was purely using this as an example to keep it simple.
The bottom line is that nobody knows what a horses chances of winning truly are. It’s not possible, all we can do is make an estimate.
But that’s fine. We just need our estimates to be better than the bookies!
Which is why we look at our data over the long-term. The easiest way to do this is to use averages. Are averages mathematically the best way to do it? Probably not, we can used far more complex and advanced techniques. Are they good enough for what we need? Absolutely.
Over the last month take the average odds of all your selections for a single strategy and then work out the average chance that the bookmakers are saying your horse wins.
Compare this to the strike rate that you have achieved over the same period of time.
If you’ve made a loss then you are going to have a lower strike rate and if you’ve made a profit you will have a higher strike rate.
We can do this over three months, six months, a year or longer. But there is no point in doing it over a single day, there isn’t enough data.
However there is a way that we can determine if we’ve found value over the course of a single day!