DIY: How To Find A Value Bet

| January 26, 2018 | Reply

Hello again all.

I hope you are enjoying the reviews, which you should see increase in number over the coming weeks.

Matt and I are also working on a new venture which we hope will bring you even more information when reviewing and comparing tipsters – more about that shortly, watch your in-box!

Two particularly strongly performing tipsters currently under review are Elite Betting Syndicate (review due 15th Feb) and The Bookies Enemy (update out 9th Feb).

Chris

Finding and exploiting value in your betting

The subject of value in betting always engenders a huge amount of debate…

Is it the be all and end all of profitable gambling?

What constitutes a value bet?

Is finding value a science or an art?

I hope to delve into some of these issues today and leave you with enough information to make your own mind up.

But before we start let’s be clear on one basic concept:

20/1 DOES NOT necessarily mean value and 4/5 DOES NOT necessarily mean there is no value!

What do we mean by value?

Value exists when we, the punter, consider the likelihood of a particular outcome to be more likely than the bookmakers’ odds suggest.

To use a simple example, there would be little argument that the probability of a flipped coin (not weighted in any way) being heads is 50:50 or 50% or Evens (2.0). So, if a bookmaker offered 21-20 or 2.05 on heads, then our expected outcome would be higher than the odds offered, and a value bet opportunity exists.

How to calculate a value bet?

The first step here is to understand the concept of implied probability.

Implied probability is the odds of a particular outcome expressed in percentage terms. The formula is very simple:

(1 / odds) * 100

This is easiest to compute when the odds are in decimal format. Using our example above of 2.05, the implied probability becomes:

(1 / 2.05) * 100
= 0.4878 * 100
= 48.78%

As we would consider the likelihood of a heads being 50%, and the implied probability of the odds is only 48.78%, then we have a value bet.

To convert fractional odds to decimal is a relatively simple matter. To convert odds of x-y to a decimal, simply divide x by y and add one. For example, converting 13-8 to a decimal would be:

(13/8) + 1
= 1.625 + 1
= 2.625

Whenever the implied probability is lower than our own expectation then we have a value bet.

Let’s finish this section with a live example…

Middlesbrough are currently 2.20 to beat Brighton in the FA Cup on Saturday.

With home advantage and Brighton likely to rest players with their Premier League position looking precarious I rate Middlesbrough’s chances at 60%.

The implied probability in bet365’s odds of 2.20 is 45.45% i.e. (1/2.20)*100. So for me, this represents a value bet as 60% is more than 45.45%.

How do we identify value bets?

There is a two-step process involved here…

Firstly we need to assign our own probabilities to particular outcomes and then we compare those to the implied probabilities offered by the bookmakers. The second part is easy, just follow the steps above, it’s the first part that is more difficult.

In the examples above we have been dealing with an event with just two possible outcomes – heads or tails – both of which are equally likely to occur. The situation with a sporting event is completely different.

Here we are dealing with multiple possible outcomes, affected by a myriad of factors. It would be impossible to arrive at a completely accurate assessment for each possible outcome and our objective is to make the best attempt possible to consider all of the facts.

In a previous article I talked about AI and machine learning and how that is influencing the way markets are priced…

One of the factors which still gives us a chance to find an edge over the bookies is to assess the “right” variables. We can identify the most important factors through detailed research and analysis and the maintenance and review of our results.

The best way to apportion your own probabilities is to price the market up yourself.

This is the approach adopted by professional gamblers and the top tipsters and requires time, commitment, research and a little bit of “Je ne sais quoi”!

Learning to price a market using your own criteria and knowledge requires hard work and effort, but in the long-run can be very rewarding. If pricing the market yourself isn’t for you, however, then consider using a leading tipster who will have done the hard work for you.

To answer my earlier question – “Is finding value a science or an art?” – it’s actually a bit of both.

The science comes from calculating and comparing the probabilities and researching and collating the data. The art comes from knowing what to research and the “feel” you develop in identifying the important factors, the subjective elements.

How can we maximise the value?

Here are my top 10 tips for maximising the value:

  1. Specialise. Follow a particular market and develop a deep-rooted understanding of that area. Being a jack of all trades doesn’t work.
  1. Avoid your own team, favourite horse etc. Personal feelings will cloud your judgement when setting your own prices and lead to losses that could be avoided.
  1. Set your probabilities before you look at the odds. Knowing the bookies position will almost certainly influence your own reasoning.
  1. Shop around. Always check the prices available with various bookmakers and take the best price.
  1. Use early prices. Prices set the evening before racing are often better than on the day as bookies seek to entice punters and the “clever money” hasn’t yet influenced the market.
  1. Don’t ignore short-priced favourites. As I said right at the beginning, 4-5 doesn’t equal bad value. Overlook the price, if the implied probability is less than your own rating then there is value.
  1. Multiply the value. If short-priced picks are not your thing then consider wrapping them up in multiples. Each additional value selection you add in will increase the edge of that bet over the implied odds.
  1. Keep going. Being good at anything takes time and effort and finding value in the betting market is no different. But as your knowledge and experience increases so will your success rate.
  1. Fine tune. Keep accurate records of your results and your rationale and review them regularly to see what went right and where you can tighten up your process.
  1. Each-way value. Particularly in big field handicaps, there is often an opportunity to find value in a horse to place rather than win. This can be especially lucrative when using bookies offering extra places.

Is finding value the be all and end all of profitable gambling?

I often hear comments like “Any winning bet is value”, or “Find the winners and the value looks after itself”. However, remember this – the bookies have already built in their edge and if you continually back selections that the bookies have priced in accordance with your own estimates you will not gain in the long-term.

Finding the value bets on the other hand will almost certainly see your profits rise in the long-term. Patience, my friend, is a virtue!

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