The Importance Of Positive Expectation

If you are serious about being a successful punter then you must make the effort to understand the concept of positive expectation. Make it a priority to fully understand its meaning and how important it is for you to be a long-term winning punter. From my experience positive expectation (aka a winning edge) is an idea that is largely misunderstood by the vast majority of punters.

Why is this is the case? Most likely because people equate successful punting with winning more often than they lose. They think that is the secret and backing more winners is their sole goal. However the fact is that although your winning strike-rate is important, it is only one piece of the puzzle. Yet most punters focus almost all of their time on this aspect alone, so it begs the question, why is it so? Well in my mind I think it's because the majority of people bring to betting the same attributes that have made them successful in their lives, and that is their competitive "winning" nature.We just love to compete and we love to "win", whether it's sport, business or many other aspects of life.

However to "win", also means to be "right" and we have been conditioned about the importance of being "right" throughout our lives. Instinctively we want to know the "right" answer, buy the "right" car, choose the "right" school for our kids. Unfortunately, it's this one powerful human trait that works against our objective of long term punting success. This is because the consequences of loving to "win" and being "right" propels us instinctively to be more focused on backing winners than finding value, but this can work against you in terms of profitability.

Unless we know that our betting methodology produces a positive expectation (ie. an edge), then we're doomed to failure from the very start and we can forget all about money management and psychology. So what is positive expectation? It can be defined as how much money, on average, we can expect to make for every dollar we risk. Positive expectation requires us to have done enough research and validation to prove to ourselves beyond doubt that our form analysis and betting methodology will produce profits over the long run. Now positive expectation and winning strike-rate are not one and the same so we will introduce the concept of "expected value" to explain why. EV is the amount of money you would win or lose on average on your bet and is probably best illustrated with an example:

If you and a friend were to bet on the outcome of a coin flip and agree that you would be paid $5 for every time it came heads and you would pay him $5 every time it landed tails, you would win half the time and he would win the other half of the time. You'd have a 50% strike-rate but each bet has a neutral Expected Value. But the EV becomes positive if for example your opponent decided he would pay you $10 for every heads and you would still only pay him $5 for every tails. Your winning strike-rate hasn't changed, but when you win you're getting paid double what you pay him when you lose. Your expected value on every coin toss is now $2.50.

Related to horse racing (or sports betting for that matter) a 33% strike-rate may sound OK, but average odds of less than $3.00 would make this a bet with negative expectancy. In layman's terms - a losing approach. So how can we calculate a methodology's positive expectation or 'profit on turnover'? Well it's quite simple and the formula is:

Profit on Turnover (%) = (Profit / Outlay) x 100
As an example, say that a 1000 bet sequence involved an outlay of $100,000 for a total return of $110,000:

POT = (10,000 / 100,000)
POT = 10%

Or you could say that we got $1.10 back for every $1 invested. Of course most systems, tipsters, trainers etc have a negative expectancy. So we as punters need to determine, from a representative sample size, what edge we have on the market. If there is no edge (that is no positive expectation) then it should be left alone because following those selections would only lead to ruin!

This article was inspired by (and adapted with the author's permission) from Brent Penfold.

Related Articles

• 13 Major Benefits of Speed in Sports
• Do You Know The Deadliest Fighting Styles
• Clever Ideas Create Crafty Schemes In Spaceship MMORPG's Today
• The Benefits Of Junior Golf
• Useful information About Local Recreational Camps

HTML Ready Article. Click on the "Copy" button to copy into your clipboard.

<!DOCTYPE HTML PUBLIC '-//W3C//DTD HTML 4.01 Transitional//EN' 'http://www.w3.org/TR/html4/loose.dtd'><html><head><title>Articles Back Link | The Importance Of Positive Expectation</title></head><body><h3>The Importance Of Positive Expectation</h3><br><br> By: David Duffield<br><br><p><p>If you are serious about being a successful punter then you must make the effort to understand the concept of positive expectation. Make it a priority to fully understand its meaning and how important it is for you to be a long-term winning punter. From my experience positive expectation (aka a winning edge) is an idea that is largely misunderstood by the vast majority of punters.</P><p>Why is this is the case? Most likely because people equate successful punting with winning more often than they lose. They think that is the secret and backing more winners is their sole goal. However the fact is that although your winning strike-rate is important, it is only one piece of the puzzle. Yet most punters focus almost all of their time on this aspect alone, so it begs the question, why is it so? Well in my mind I think it's because the majority of people bring to betting the same attributes that have made them successful in their lives, and that is their competitive "winning" nature.We just love to compete and we love to "win", whether it's sport, business or many other aspects of life.</P><p>However to "win", also means to be "right" and we have been conditioned about the importance of being "right" throughout our lives. Instinctively we want to know the "right" answer, buy the "right" car, choose the "right" school for our kids. Unfortunately, it's this one powerful human trait that works against our objective of long term punting success. This is because the consequences of loving to "win" and being "right" propels us instinctively to be more focused on backing winners than finding value, but this can work against you in terms of profitability. </P><p>Unless we know that our betting methodology produces a positive expectation (ie. an edge), then we're doomed to failure from the very start and we can forget all about money management and psychology. So what is positive expectation? It can be defined as how much money, on average, we can expect to make for every dollar we risk. Positive expectation requires us to have done enough research and validation to prove to ourselves beyond doubt that our form analysis and betting methodology will produce profits over the long run. Now positive expectation and winning strike-rate are not one and the same so we will introduce the concept of "expected value" to explain why. EV is the amount of money you would win or lose on average on your bet and is probably best illustrated with an example:</P><p>If you and a friend were to bet on the outcome of a coin flip and agree that you would be paid $5 for every time it came heads and you would pay him $5 every time it landed tails, you would win half the time and he would win the other half of the time. You'd have a 50% strike-rate but each bet has a neutral Expected Value. But the EV becomes positive if for example your opponent decided he would pay you $10 for every heads and you would still only pay him $5 for every tails. Your winning strike-rate hasn't changed, but when you win you're getting paid double what you pay him when you lose. Your expected value on every coin toss is now $2.50.</P><p>Related to horse racing (or sports betting for that matter) a 33% strike-rate may sound OK, but average odds of less than $3.00 would make this a bet with negative expectancy. In layman's terms - a losing approach. So how can we calculate a methodology's positive expectation or 'profit on turnover'? Well it's quite simple and the formula is:</P><p>Profit on Turnover (%) = (Profit / Outlay) x 100<br>As an example, say that a 1000 bet sequence involved an outlay of $100,000 for a total return of $110,000:</P><p>POT = (10,000 / 100,000)<br>POT = 10%</P><p>Or you could say that we got $1.10 back for every $1 invested. Of course most systems, tipsters, trainers etc have a negative expectancy. So we as punters need to determine, from a representative sample size, what edge we have on the market. If there is no edge (that is no positive expectation) then it should be left alone because following those selections would only lead to ruin! </P><p>This article was inspired by (and adapted with the author's permission) from Brent Penfold.<br></P></p> <br><br> <b>Author Resource:-></b>  <br><br><b>Article From</b> <a href='http://www.articlesbacklink.com/'>Articles Back Link</a><br></body></html>