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During the first quarter of the season, results can be very unpredictable, and often less fancied teams bet the more well known teams. This is the time to bet on highly priced underdogs. League tables should not be used as a pick criteria at all during the first months of the season, as they count for nothing in this period. Wait for the season to settle, and only start to use the tables after about a quarter of the season. League tables should never be used as the only criteria when deciding your bets. Remember that bookies use a set of statistical methodolgy when they decide what odds to offer, and league table is just one of the statistical inputs. Form is the major criteria used by bookies to decide prices. Therefore, form teams are almost always recognised by bookies, and the prices reflect this. A team who have won it's last 4 matches are rarely given good odds by the bookie. You have to identify a team in form as early as possible, in order to get good prices before the bookie discover it. Often you can assume a change in form, not necessarily based on results, but on reports on how the team has played, even though results haven't been that good. During a season teams hit periods with extreme luck, and periods with really bad luck. Teams can play very badly for a period, then a change of management turn things upside down, and the team hit a winning streak.. It's vital to your success to identify these periods early on, before bookies get aware. Sometimes two teams only need a draw to qualify for a championship, or to avoid relegation. Sometimes one team need a draw to ensure the championship, while to opposition need a draw to beat the drop. Bookmakers are very alert to these situations, and prices are often slashed in these situations. A "fixed" draw is typical for the Italian league, but will rarely happen in English soccer, due to the typical honesty of English teams. English teams play for pride, and for the sake of the sport's reputation. For us punters, it's a must to bet on these games, but very often bookmakers won't accept bets. A value punter minimizes long-term risk of losing money by choosing bets which have a built in margin of safety. Hot favorites' hype, and mass hysteria do not affect the decisions a value punter makes. Value punting is extremely taxing to the average person, as significant analysis must be done prior to betting, and it requires an unusual level of confidence, as bets are often made on the underdogs. Value punters must be willing to remain within their circle of competence and punt only in matches they understand. A value punter is unafraid of betting on a team when it's down and out, provided the odds is right. At any point in time, there are several teams whose odds are unusually high. There are many reasons for this to happen, such as disappointing results, financial problems, changes in coach or players, etc. A value punter will weigh the increase in odds with the reasons that caused it. If it appears that most punters overreacted (as it often does), then the value punter might take this as an opportunity to stake on the troubled team. The probability is not more certain merely because information and statistics is easily available to you. Our predictions tend to be based on easily available information (ie. statistics and previews). The result? We tend to overweigh easily available information. Most punters assess the frequency, probability, or likely result of the soccer match by the availability of similar occurrences in our memory. So, what are the consequences of over-weighing available information? Punters estimate of probability will go wrong, so their estimates of value will go wrong, resulting in misjudgments. We also over-weigh the things that can be counted and neglect the things which can't be counted. Odds are readily available and precise, as they are immediately and vividly shown on the tote-board at Spools' branch and website. However, the winning probability is not readily available, as it is essentially just an estimate. Is it any wonder why punters tend to put too much attention on the odds movement? Thus, the antidote for "availability bias" is to tone down the influence of vivid and accessible information, and tone up the information which are easily overlooked. Hyperbolic discounting is the tendency for people to prefer a smaller, certain payout over a larger, uncertain payout. Interestingly, certainty is a big factor in choosing a bet. Put simply, most punters would choose a favorite low odds bet that seems to provide a higher probability of winning instead of choosing an underdog whose probability is lower but provides higher odds. However, it is interesting how much less we are willing to accept from a strong favorite team or 1/2 goal bet (at ridiculously low odds) rather than patiently wait for a "mispriced bet situation" at attractive odds. The issue is not which horse is the likely winner, but which horse offers odds that exceed their actual chances of victory. AB members look at the picks posted by tipsters because they want to be led, to be instructed, to be told what to bet. They want reassurance. People want the safety of human company. They are afraid to stand alone because they want to be safely included within the herd, not to be that lonely cigarette butt lying on the path of an unpopular opinion. Most tipsters have little idea of how to deal with the possibility of match upsets. Even though they recognize its presence, they tend to steer clear from tipping the "kelong outcome", often to protect themselves from flamming by others if their tips were wrong. Once you realize that imperfect understanding is human nature, there is no shame in making a wrong prediction. Remember, it's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong. Match upsets have been and will be associated with remarkably higher payouts, and the good news is that there are systematic ways to think about it. If these ways are followed, they can provide a path to extraordinary payouts. To be sure, substantial losses are inevitable when your judgment is wrong. Some people will flame you for bringing them to "holland". But the net expected results will be better than if you routinely bet on those favorite outcomes with extremely low odds. The worse a team becomes, the less it takes to turn it around. Money is made by discounting the obvious and betting on the unexpected. Thus, the kelong-sensitive punter should be constantly on the lookout for such betting opportunities. The ability to identify kelong results leads to a maxim on betting advantage: "The greater is your payout, that is the larger is your advantage, the greater the size of your bets you should put at risk." Most punters are afraid to follow it sufficiently if at all. Indeed, not everyone has the courage to bet against the favorites. They tend to whack more on favorite outcomes with low odds, but bet much less when the payout is high. This is due to the belief that low odds equals high probability, and vice versa. This is not always true. Improbable results are more likely to happen than you think. The only way to make a profit is to pick teams that exceed the punters' expectation. You will only ever make a profit from betting if you consistently bet on teams at odds too high when compared to its actual chance of winning. This is exactly how Spools have made their money for years – they consistently price the favorite teams at very low odds compared to the actual chance of the team winning. When punters continue to take these low prices day-in and day-out, it will only ever be Spools who come out with a profit in the long run. By allowing Spools to have an edge against you in terms of the discounted odds, there is no money management scheme that will make you a winner. If you continue to bet on the discounted odds, regardless of how you manage your money, it is almost certain you'll be a net loser within 50 games. Even if you are winning frequently, you still won't win in the end, because you are winning less when you win and losing more when you lose. When soccer teams are favored, people think that nothing can go wrong. They love the top scorers, they love the top ranking, and more often than not they will be disappointed. Due to the majority's bias toward favorite teams, it naturally follows that the odds offered for a favorite win are typically much lower than it's worth. The chances may be on your side, but the real odds are against you. Consequently a betting strategy based on the underdog win outcome, although occurring less often than one based on the favorite win outcome, may have the potential for greater profits than a betting strategy for the favorite win. For these reasons Fahrenheit's betting strategy will focus mainly on supporting the underdog win. An underdog with remarkable odds is superior to a favorite team at lousy odds. Most bettors don't have the courage to go with certain underdogs. They see a (perceived) good team versus a (perceived) bad team and assume it won't be a contest. They have formed an opinion about how horrible some teams are based on a recent blowout or past personal gambling loss. Again, with the right combination of statistical and situational research, some undervalued dogs can be spotted each week. There are also certain situations in which bad teams have historically and reliably outperformed their average. Match that with a historically-proven situation in which favorites under-perform and you have yourself a reliable upset scenario. Underdogs don't get any respect! They don't get it from the public, sometimes leading to higher than deserved spreads. More importantly, they don't get it from their opposition. Good teams can sometimes take bad teams lightly (especially if players and coaches minds are on other things, like next week's tougher opponent). Research and an understanding of historical trends can reveal great situations in which underdogs are poised for an upset. Basically, odds movement have only one significant meaning for the punter. They provide him with an opportunity to bet when odds are above his estimate and to avoid betting when the odds are below his estimate. At other times he will do better if he forgets about the odds movement and pays attention to his own psychology. Perhaps the single greatest error in soccer betting is a failure to distinguish between estimation of probability and the expectations implied by the odds movement. A voting machine MUST NEVER be treated as a weighing machine. Degrees of confidence must not be confused for degrees of probability. Before checking Spools odds, entering AB forum, or reading match previews, first write down your views about the upcoming match you are considering to bet: why the team is good or bad, what odds it is worth, and your reasons for those views. The odds may be set wrongly and the majority's expectations could be wrong, and sometimes an alert and courageous punter can take advantage of such errors. The other is that most teams change in form, motivation and quality over the weeks, sometimes for the better, perhaps more often for the worse. The punter need not watch his teams’ performance like a hawk; but he should give it a good, hard look from time to time. If "kelong" just happened yesterday, it doesn't mean it won't happen again today. If it hasn't happened for a long time, it can still happen today. Think of volcanic eruptions and earthquakes. The punter who permits himself to be stampeded or unduly worried by unjustified odds movement is perversely transforming his basic advantage into a basic disadvantage. You would be better off if the odds doesn't move at all, for you would then be spared the mental anguish caused to you by the majority’s mistakes of judgment. Most punters know that soccer betting is an exercise in probability. But knowing it and actually living by it can be two separate things. Punters are poorly calibrated in estimating probabilities. When they are sure that team A will win, the actual probability is far less than their expectations. In short, each punter thinks that he is smarter, and that he has better information than others. For example, he may get "insider information" from someone, or discovered a paid preview on the internet, and then he is ready to place his bets based on his perceived knowledge advantage. Overconfident punters overestimate their ability to make predictions. As a result, they can become blind to any negative information. Overconfident punters can place too much bets as a result of believing that they possess exclusive knowledge and information. After an unusally long winning streak, punters may start to believe that their success is due to their skills rather than luck. This behavior can lead to taking on too much risk and over-betting. This also leads punters to "hear only what they want to hear". That is, when punters see information that confirms a bet which they have made, they will ascribe "brilliance" to themselves. Punters should recognize that successful betting is merely a probabilistic activity. Even the wisest punters have absolutely no control over the match outcomes, such as weather, injuries, random movements on the pitch, referee's bias, etc. Regret aversion can cause punters to be too conservative in their bets. Having suffered losses in the past, many punters shy away from supporting the underdogs and accept only low odds or handicap bets. This behavior, although it allows you to make tiny profits along the way, can lead to unexpected losses instead. Successful soccer betting does not require a high IQ, unusual analytical abilities, or inside information. What's needed is a sound intellectual framework for deciding your bets, and the ability to keep your emotions from corroding that framework. The critical factor is quantifying the probability of the outcome and getting a fair or attractive odds. Never bet in a match you cannot understand. You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right. It is optimism that is the enemy of the rational punter. To improve your prediction, combine predictions derived from statistical methods that differ substantially and draw from different sources of information. When feasible, use five or more methods. Develop and use a "unifying system" to combine these methods: An equal-weights rule offers a reasonable starting point, and a trimmed mean is desirable if you combine the predictions derived from five or more methods. Combining the methods is especially useful when you are uncertain about the probability of the match outcome, uncertain about which method is most accurate, and when you want to avoid large errors. Compared with errors of the typical individual prediction, combining reduces errors. Do not engage in the heuristic reasoning that just because you do not know the risk, other punters do. Think carefully, and assess whether they are likely to know more than you. When the odds are extremely favorable, sometimes it pays to gamble on the unknown, even though there is some chance that the punters on the other side may know more than you. The most important quality for a punter is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd. You ought to be able to explain why you’re making this bet. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, skip this match and bet on other games you can understand. The important thing is to bet against overconfident punters and to play for big stakes. For some reason, punters take their cues from odds movement rather than from probabilities. What doesn’t work is when you start doing things that you don’t understand or because they worked last week for somebody else. The dumbest reason to start betting because the odds is going down. Uncertainty is the friend of the punter who stake on high odds."Hindsight bias" is the inclination to see soccer results that have occurred as more predictable than they in fact were before the game kicked-off. Punters also tend to remember their predictions of soccer results as having been stronger than they actually were, in those cases where those predictions turn out correct. This inaccurate assessment of soccer predictions after it has occurred is also referred to as “creeping determinism”. Punters are deemed to be "suggestible" if they accept and act on tips/suggestions by other punters. Younger, inexperienced punters and newbies are generally more suggestible than older, experienced punters. Individual levels of self-esteem, assertiveness, and other qualities can make some punters more suggestible than others — i.e., they act on others' suggestions more of the time than other people. The "disposition effect" is an anomaly discovered in behavioral finance. It relates to the tendency of punters to avoid betting on a team whose odds has increased, while betting on teams whose odds have dropped drastically. "Anchoring" is a cognitive bias that describes the common human tendency to rely too heavily, or "anchor," on one trait or piece of information when making decisions. During normal decision making, individuals anchor, or overly rely, on specific information or a specific value and then adjust to that value to account for other elements of the circumstance. Usually once the anchor is set, there is a bias toward that value. Take, for example, a punter looking to place a bet on a particular match. He or she may focus excessively on a reading match previews from a certain website, or a specific forum, or rely on a particular tipster, and use those criteria as a basis for evaluating the team's chance of winning, rather than considering how well the team has performed. Punters place too much importance on one aspect of an analysis, causing an error in accurately predicting the soccer result. Anchoring and adjustment is a psychological heuristic that influences the way punters intuitively assess probabilities. According to this heuristic, punters start by first looking at the bookie's odds and use it to form their estimate of probability. The "ambiguity effect" is a of cognitive biases">cognitive bias where punting is affected by a lack of information, or "ambiguity". The effect implies that punters tend to select options for which the probability of a favorable result is known, over an option for which the probability of a favorable result is unknown. One possible explanation of the effect is that people have a rule of thumb (heuristic) to avoid options where information is missing. "Wishful thinking" is the formation of beliefs and making decisions according to what might be pleasing to imagine instead of by appealing to evidence, rationality or reality. Studies have consistently shown that holding all else equal, subjects will predict positive outcomes to be more likely than negative outcomes. The Gambler’s fallacy is the tendency to think that future probabilities are altered by past events, when in reality, they are not. Certain probabilities, such as getting a heads when you flip a (fair) coin, are always the same. The probability of getting a heads is 50%, it does not matter if you’ve gotten tails the last 10 flips. Thinking that the probabilities have changed is a common bias, especially when gambling. For example, I am playing roulette. The last four spins have landed on black, it has to be red this time right? Wrong! The probability of landing on red is still 47.37% (18 red spots divided by 38 total spots). This may sound obvious, but this bias has caused many a gambler to lose money thinking the probabilities have changed. Misleading vividness is a term that can be applied to anecdotal evidence describing an occurrence, even if it is an exceptional occurrence, with sufficient detail to permit hasty generalizations about the occurrence (e.g., to convince someone that the occurrence is a widespread problem). Although misleading vividness does little to support an argument logically, it can have a very strong psychological effect because of a cognitive heuristic called the availability heuristic. Keep a betting Log. A betting log provides insights to your betting decisions after the fact. It might seem like a hassle, but it will provide insights to your betting patterns that you might not be aware of. Using a betting log will help you remember why you made your bets in the first place and that will help you learn the difference between how you planned a winning bet and how you planned a losing bet. Don't over-bet. Sometimes you can't find a “value bet” or a “mispriced bet” but you will feel the urge to bet anyway. Avoid this by finding something else to to. You are not required to bet every day! Don't bet just for the sake of betting. Whatever method you use to analyze soccer one thing is for sure; a confluence of multiple criteria and indicative parameters will lead to greater accuracy for your bet. Most value punters rely on a set of multiple criteria (such as favorable match previews, statistics, a similar pick from other tipsters, etc) in their value betting system. Don’t bet until three out of five of your safety checks are true. Back your conviction if you have made all of your checks. A solid betting system will require you to use more than one indications to decide your bet. When this happens it is called confluence. Confluence of indications is the best way to build your confidence in your bets and gives you the best chance at profits. Where many punters go wrong is jumping the gun and making a bet on impulse without confluence, or when they are only seeing one aspect of their confirmation happening. The urge to keep betting after a winning streak can be especially strong. This is the exact period that many punters due the most damage to their money. If you find yourself feeling this way the best thing you can do is to do something else instead. Waiting for confluence of indications means you must have patience. This will require you to pass up a bet that doesn't give value. The point here is that you are acting like a tiger in the wild by laying low and waiting for the most obvious bet to come along with the most confluence. Tigers don't go running after every gazelle that comes their way, they sit and wait for hours and sometimes days or weeks until the perfect opportunity comes along. This way they give themselves the highest success rate possible with little wasted effort. Punters often think by betting more they are taking advantage of “sure winners” and giving themselves a better chance at winning. This belief is fundamentally wrong but it is how we are wired as humans. This is what makes betting so hard to win sometimes. Waiting patiently for all indicative parameters to come together is immensely important in value betting. Be intellectually honest. When you are wrong admit it , learn from it and go on to the next bet. The betting market rewards intellectual arrogance with losses and pain. There's a match to bet and a match to skip; know each implicitly. Remarkably, it appears that our brains have been hard-wired to make certain errors. Hundreds of different biases have been identified and categorized, including biases that distort our judgments, that introduce errors into the estimates and forecasts that we produce, and that cause us to make the wrong choices. People are notoriously poor at estimating and forecasting. They interpret statistical correlation as implying cause-and-effect. They tend to naively extrapolate trends that they perceive in charts. They draw inferences from samples that are too small or unrepresentative. They routinely overestimate their abilities and underestimate the time and effort required to complete difficult tasks. Estimating and forecasting biases are a special class of biases important to project-selection decision making. Overconfidence is another powerful bias. We believe we are more accurate at making estimates than we are. I've often repeated a well-known demonstration to illustrate what I call the "2/50 rule." People are asked to provide confidence intervals within which they are "98% sure" that various uncertain quantities lie. The quantities for the questions are selected from an Almanac, for example, "What's the elevation of the highest mountain in Texas?" "Give me low and high values within which you are 98% sure that the actual value falls." When the true value is checked, up to 50% of the time it falls outside of the specified confidence intervals. If people were not overconfident, values outside their 98% confidence ranges would occur only 2% of the time. Overconfidence is also demonstrated by the many examples of people expressing confidence about things that are subsequently proved wrong. For example, British Mathematician Lord Kelvin said, "Heavier-than-air flying machines are impossible." Thomas Watson, founding Chairman of IBM, reportedly said, "I think there is a world market for about five computers." The Titanic was the ship that couldn't sink. Likewise, surveys show that most drivers report that they are better than average, and most companies believe their brands to be of "above-average" value. A related bias is anchoring. Initial impressions become reference points that anchor subsequent thoughts and judgments. For example, if a salesperson attempts to forecast next year sales by looking at sales in the previous year, the old numbers become anchors, which the salesperson then adjusts based on other factors. The adjustment is usually insufficient. Anchors can be set through any mechanism that creates a reference point. For example, in one study, groups of consumers were shown credit card bills that either did or did not contain minimum payment requirements and asked how they would pay the debt off given their real-life finances. The payments for those who indicated they would pay over time were 70% lower for the group who saw information on minimum payments compared to those who did not. Apparently, the minimum payment works as an anchor, causing the card holder to pay a smaller amount than would have been paid in the absence of the anchor. Recent events are easy to recall and often become anchors. Thus, investors tend to believe that what's happening currently to the price of a stock will continue to happen into the future (thus, anchoring contributes to stock price volatility since it prolongs up- and downswings) Knowing that recent job performance has a more pronounced affect on impressions, workers naturally give more attention to performance in the 3 months just prior to reviews than in the previous nine months. Motivational biases can affect estimates and forecasts whenever estimators believe that the quantities expressed may affect them personally. For example, managers may have an incentive to overstate productivity forecasts to reduce the risk that the capital dollars allocated to their business units will be reduced. More subtle biases also affect estimates provided from managers, and the effect can depend on the individual. For example, project managers who are anxious to be perceived as successful may pad cost and schedule estimates to reduce the likelihood that they fail to achieve expectations. On the other hand, project managers who want to be regarded (consciously or unconsciously) as high-performers may underestimate the required work and set unrealistic goals. Most managers are overly optimistic. When companies collect data on the financial returns from projects, they almost always find that actual returns are well-below forecasted returns. Motivational biases can also cause experts to minimize the uncertainty associated with the estimates that they provide. They may feel that someone in their position is expected to know, with high certainty, what is likely to happen within the domain of their expertise. Likewise, I have found that managers sometimes become defensive when asked to estimate the potential losses associated with a proposed project, even in environments where it is well-known that projects can fail. They may feel that admitting to downside potential would suggest deficient risk management practices or the fallibility of their project management controls. Poorly structured incentives, obviously, can distort decisions as well as estimates. For example, any company that rewards good outcomes rather than good decisions motivates a project manager to escalate commitments to failing project, since the slim chance of turning the project around is better from the manager's perspective than the certainty of project failure. Base-rate bias refers to the tendency people have to ignore relevant statistic data when estimating likelihoods. For example, most people believe they are more likely to die from a terrorist attack than from colon cancer, even though statistics indicate otherwise. Variations of this bias are important in business environments, including the tendency people have to be insufficiently conservative (or "regressive" when making predictions based on events that are partially random. Investors, for example, often expect a company that has just experienced record profits to earn as much or more the next year, even if there have been no changes in products or other elements of the business that would explain the recent, better-than-anticipated performance. The tendency to underestimate the effort needed to complete a complex task has been attributed to base-rate bias. Instead of basing estimates mostly on the amount of time it has taken to do previous similar projects, managers typically take an "internal view" of the current project, thinking only about the tasks and scenarios leading to successful completion. This almost always leads to overly optimistic forecasts. One manager I know says he always multiplies the time his programmers say will be required to complete new software by a factor of two, because "that's what usually happens. Small sample bias is another example of inaccurate statistical reasoning—people draw conclusions from a small sample of observations despite the fact that random variations mean that such samples have little real predictive power. Conjunctive events bias refers to the tendency for events that occur in conjunction with one another to make a result appear more likely. For example, the possibility that you may die during a vacation (due to any cause) must be more likely than the possibility that you will die on vacation as a result of a terrorist attack. Yet, one study showed that people are willing to pay more for an insurance policy that awards benefits in the event of death due to terrorism than one that awards benefits based on death due to any cause. Forecasting errors are often attributed to the fact that most people don't get good feedback about the accuracy of their forecasts. We are all fairly good at estimating physical characteristics like volume, distance, and weight because we frequently make such estimates and get feedback about our accuracy. We are less experienced (and get less verification) when making forecasts for things that are more uncertain. Weather forecasters and bookmakers have opportunities and incentives to maintain records of their judgments and see when they have been inaccurate. Studies show that they do well in estimating the accuracy of their predictions.
"Margin of Safety" as the Central Concept of Betting A team's past ability to create quality chances is the expected number of goals that they should have produced. The expected number of goals in excess of the actual number of goals constitutes the "margin of safety". The margin is counted on to cushion the bettor against discomfiture in the event of a performance decline in the upcoming fixture. The soccer bettor does not expect the upcoming fixture to work out the same as in the past. If he were sure of that, the safety margin demanded might be small. The function of a safety margin is, in essence, that of rendering unnecessary an accurate estimate of the team's winning probability in the upcoming fixture. If the safety margin is sufficiently large, then it is enough to assume that the team's upcoming performance will not fall far below their expected goals in order for the bettor to feel sufficiently cushioned against bad luck. The safety margin is always dependent on the odds that the bettor accepts from the bookie. It will be large in certain odds, small at some lower odds, and negative when the odds is too low. However, even with a safety margin in the bettor's favour, he may lose his bet. For the margin guarantees only that he has a better chance of winning - not that loss is impossible. Theory of Diversification There is a close logical connection between the concept of safety margin and the principle of diversification. One is correlative with the other. Even with a margin in the bettor’s favor, an individual bet may work out badly. But as the number of such commitments is increased the more certain does it become that the aggregate of the profits will exceed the aggregate of the losses. This point may be made more colorful by a reference to the arithmetic of roulette. If a man bets $1 on a single number, he is paid $35 profit when he wins—but the chances are 37 to 1 that he will lose. He has a “negative margin of safety.” In his case diversification is foolish. The more numbers he bets on, the smaller his chance of ending with a profit. If he regularly bets $1 on every number (including 0 and 00), he is certain to lose $2 on each turn of the wheel. But suppose the winner received $39 profit instead of $35. Then he would have a small but important margin of safety. Therefore, the more numbers he wagers on, the better his chance of gain. And he could be certain of winning $2 on every spin by simply betting $1 each on all the numbers. (Incidentally, the two examples given actually describe the respective positions of the player and proprietor of a wheel with a 0 and 00.)
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