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When you are reviewing the latest betting system, or a new tipster, what is the most important thing you look for?? Is a high strike rate top of your list of requirements? Maybe you are looking for a benchmark minimum of 30% Are you on the look out for juicy winning prices? Perhaps you prefer betting at around 3/1 or 4/1 To be making a long-term profit, what you should actually be doing is combining these two benchmark figures to see if you are achieving overall 'value'. A sure-fire way to make consistent profits from betting over a period of time, is to back horses at prices higher than their actual chances of winning. In other words, you are getting value-for-money into all your bets. By the same token, if you copy how bookmakers have been operating for generations, then you will make the same consistent profits, just as they do. Only lay bets on horses to lose at prices too low when compared to the realistic chances of the horse winning. To illustrate, if you were to back horses with a 50% chance of winning, but you only ever backed when the odds offered were better than even money, you would be guaranteed a profit. If you were to back horses at 3/1 that should (according to their realistic chance of winning) be priced at 2/1 then again, in the long run, you would always finish in profit. When you read this back to yourself, it’s obvious really, but all too often we place too much importance on strike rates, and tell ourselves we should "never back odds-on", when in truth both these benchmarks are irrelevant if the price is not also factored into the mix. On the face of it, achieving a strike rate of 50% might look impressive. However, if the average price of all the winning horses is less than even money, then you will return a loss. Let's say John The Tipster's average winning price was 4/5 odds-on. Your first reaction might be to say his tips were very poor value that most people could pick themselves. But if someone were to tell you John The Tipster had a strike rate of 70% then it would be a different story. John is achieving a typical price of 4/5 for selections which should realistically be priced at only 3/7 odds-on. Strike rates and prices are all relative to each other, and undeniably linked together by VALUE Some popular misconceptions include that it's not possible to make money by backing short-priced horses, and also that it's only by picking outsiders that you will make money. Both these theories are partially correct, but further qualification is needed for them to be completely true. Myth #1 : Horses at short prices never represent good value We all know the horse offered at the lowest price is the favourite for the race, and it is common knowledge that if we blindly followed the favourite in every race we would end up losing money – this is an undeniable fact. But not everyone is aware that the reason we would lose money is down to the fact that bookmakers are in the priviledged position of being able to manipulate the prices in every race. The odds offered about a horse will generally be too short when compared to actual chance of it winning. For example, you might reasonably expect a horse with odds of Even money to wind up in the Winners Enclosure 50% of the time – WRONG!! – indeed you will find even money chances win only around 44% of the time. This discrepancy accounts for how bookmakers make their profit. Allow me to demonstrate: let's imagine the even money horse runs a fictional 100 races, and as punters we repeatedly strike our bets each time at even money. After 100 races we will have collected from the bookmaker just 44 times, but the remaining 56 times the bookmaker will have kept his hands on our money. But never-the-less, short-priced horses can still make you a profit – but only where the price still remains too high when compared to the realistic chance of the horse winning. For example, a horse priced at even money is in fact very good value if it actually has a 60% chance of winning. You would be accepting even money for a horse that should be priced at 4/6 Myth #2 : It's only by backing higher-priced horses that you make a profit The favourite in any given race is the horse with the shortest price, and it is the most likely to win. This is fact. So how is it possible to profit from backing horses lower down in the market, with higher prices and better potential returns? Well again, it's the same theory that applies as before – only back horses at a price higher than their actual chance of winning. If you decide you will only back horses at 10/1 but your system returns a strike rate of 8% then you will eventually make a loss. However, with a strike rate of 12% you will see a profit. This is because when you back horses at 10/1 (11.0) and their actual chance of winning is 12% and represented by a price of 8.33 you are receiving a price of 11.0 for something that is really only worth 8.33 – and that is the mathematical explanation why you will profit. I trust you can see that the key to making the profit here, is not the 10/1 price alone, nor indeed the 12% strike rate, but getting a combination of the two and achieving good 'value'. Betting at higher prices that still do not represent good value, will still result in a loss over an extended period of time. I will demonstarte to you how it is that by simply getting a slightly better price about the horses you pick, can make all the difference between losing money, and returning a profit: Example One: Danawi Won 15/8 Peruvian Style Lost 7/4 Compton Express Lost 6/4 Prince Des Neiges Won 2/1 Tom Sayers Lost 9/4 Stoic Leader Lost 13/8 Apache Point Lost 2/1 Finsbury Lost 15/8 Three Ships Won 11/4 Sir Duke Lost 13/8 Example Two: Danawi Won 2/1 Peruvian Style Lost 15/8 Compton Express Lost 13/8 Prince Des Neiges Won 9/4 Tom Sayers Lost 5/2 Stoic Leader Lost 7/4 Apache Point Lost 9/4 Finsbury Lost 2/1 Three Ships Won 3/1 Sir Duke Lost 7/4 Can you spot the difference between these two sets of results? You can see the same horses competed in the exact same races, with identical results. Both sets of results show a success rate of 30% The only difference between the two sets of results in the prices. The price about each horse has been increased by just one tick. But let’s examine the difference these small increases in prices make to our profit and/or loss: In Example One we invest 10 x £100 = £1,000 Our return is £287 + £300 + £375 = £962 so we lose £38 In Example Two we invest the same amount of £1,000 However, our return is now £300 + £325 + £400 = £1,025 so we make a profit of £25 Mathematically, how is it we lost money with Example One, yet saw a profit with Example Two? In both instances we achieved a strike rate of 30% -- we were successful on 3 occasions from 10 attempts -- so our selections could be given a 30% chance of winning. A 30% chance is represented by a price of 3.33 In Example One the typical winning price was the average of 15/8 (2.87), 2/1 (3.00) and 11/4 (3.75) which is 3.21 So you see, we were receiving an average price of just 3.21 for horses which should have been priced higher at 3.33 – the price was too low compared to the statistical chance of winning, and that is why we lost money over this string of bets. In the Second Example the typical winning price was the average of 2/1 (3.00), 9/4 (3.25) and 3/1 (4.00) which is 3.42 In this case we were getting an average price of 3.42 about selections which should have been priced at 3.33 – the price was in excess of the actual chance of winning, and that is why we made a profit over this series of bets. How can you make sure you get extra value when placing your bets? 1) Determine beforehand the price you want. You wouldn’t walk into your local supermarket and ask for a can of Spam, at whatever price the shop wanted to charge. 2) If you are unable to secure the price you want, then exercise the discipline not to have a bet. If you can learn to accept the frustration of missing a short-priced winner from time to time, than you will never have to suffer the agony of the short-priced 'steering job' that loses. 3) Focus your betting on the exchanges. Invariably prices on the betting exchanges are higher than those offered by the leading bookmakers. Investigate websites such as Betfair, Betdaq, and WBX. 4) Post your bets on the exchanges, then you can forget about them. It is not necessary to sit in front of your computer screen looking out for a price. Leave your request for the price you require on an exchange website, and you can walk away assured that if your price is matched you have secured a good value bet – yet if it is not matched your bet will be cancelled automatically and your money returned. You remain in control of the price, and the bookmaker no longer has any influence. In Summary The key point I want you to learn from this article is to acquire the discipline of seeking value without fail in any bets youmake. If you don't think the bet is good value, then keep your money in your pocket and just watch the race. If you can remember to put your hard-earned cash at risk only if there is the prospect of a satisfactory return, then you will raise yourself above the 98% of punters who continue to lose money. If you are a member of Redd Racing pay particular attention to my advised prices, and only bet when you can get these prices. If I ever reach a 100% success rate, and that is not going to happen, only then should you bet at any price –- until then you owe it to yourself to get value
Article Source: http://www.horseracingarticles.co.uk
About the author: Max Redd has been making a living betting on horse racing for over 10 years. He runs the Redd Racing betting advisory service which offers free horse racing tips to all prospective members, and a money-back profit guarantee. Visit www.ReddRacing.co.uk to find out more.
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