Woof43....i would have to agree on your observations....if anyone has had a look at the trifecta pools lately they are larger than the place pools most times...with less people winning them....with more and more information out there you would have to think that more and more people are getting it right in relation to form study....can anyone give me stats on the % of winners under $10 or the % of winners from the top 5 weighted horses....this shows you that the form is already done for you....i know it is great to beable to rate a race and find errors and have those errors salute at good prices....but i would have to say it is harder to find those winners....i have been doing ratings for over ten years of some sort or another and things have changed....we have to move in another direction if we are to maintain our edge...i do belive that there is a mathamaticle solution to all this and thats where i have been heading of late....yes i know you can't back every runner in the market to win but there are other ways i am sure of that.

Follow this idea... the crowd is a VERY GOOD handicapper, right? Their top-ranked selection wins far more often than their longest-odds runner. But why isn't the ROI on the crowd's TOP SELECTION exactly the same as on their WORST SELECTION? Why aren't both of those numbers EXACTLY THE SAME? You would think, if handicapping is important, that those two numbers would be nearly identical. After all, the crowd should be exactly as good as saying runner X is BEST as they are at saying that runner Y is WORST. But in reality, those two ROI numbers may be WAY DIFFERENT. Why is that??? Because handicapping just isn't as important as wagering. And while the crowd is really good at handicapping (as a conglomerate) they are incredibly bad at wagering. This is an exercise in psychology, not an exercise in picking winners.

woof43,

One of the best and true to the fact posts I,ve seen in a long time.

Woof43 wrote:

...'This is an exercise in psychology, not an exercise in picking winners'.

A nice bit of insight.

Ok well if all that is true re the underbetting/overbetting of given combinations, does the same apply to the win pool? IE is the win pool biased towards the tipsters picks or the top few in number order, and if so then is this where handicapping and pricing and betting overs can win? Basically, is the mug money doing the same to the win pool that you describe it doing to the trifecta pool, and can this be used to advantage?

Duritz

just to reinforce it more..
 

We live in a world of probabilities, not certainties.

I guarantee that if people play the "best runner" they are going to get hammered. (Assuming they play more than some tiny percentage of races.) There is NOTHING that says the best runner owes you a profit. And people that spend their precious time trying to distinguish which of the top two or three is REALLY the best are just wasting that time.

At Melb dog track the 2-1 favorite coming out of the #5 box has an average ROI of -9.02%. And, a 2-1 favorite coming out of the #8 box has an average ROI of -33.46%. So, on average, your 2-1 favorite starting from the #5 box is worth 91 cents for every dollar you play on him. Put the same dog with the same odds in #8, and now he's worth less than 67 cents per dollar wagered!
Within a percentage point or two, the 2-1 favorites in #5 and #8 will actually win just about the same number of times.
But the crowd ALWAYS OVERPLAYS THE #8 BOX AND ALWAYS UNDERPLAYS THE #5 BOX! If you do your handicap, and get the same strength of winner in #5 and #8, you SHOULD NOT PLAY HIM THE SAME WAY FROM BOTH BOXES! If you do, you're being a fool. That is why I chide those who do their handicap, and then get up and play their favorite in the same kind of wager, no matter what kind of race it is, and no matter what box their dog is in. They spend all that time finding a favorite, then they likely throw away whatever advantage they might have by making a stupid wager.
And that is what I mean by wagering being more important than handicapping. Spending your time splitting hairs between the #5 and the #8 is just plain dumb. Spending time understanding the wagering picture in a race is very smart. Understanding the wagering situation means that I don't have to look too closely at the #5/#8 situation AT ALL. If those two are close at all, take the #5!
It is SO MUCH about wagering, and not handicapping.
Take a look at yet another wagering statistic from the same track using the same 2/1 fav, If I take my SAME RANKINGS and instead make a three-dog box tri, what then?

3-dog box: 80 hits out of 1286 races (6.22%), average payoff is $89.66, and the ROI is a miserable -53.52%. (BTW, the 6.22% hits is very reasonable for a three-dog box.)

So,I take the EXACT same handicap and bet it three ways:

123/123/123 (3-dog box) (stupid, -53.52% ROI)
or
12/1234/1234 (meerly dumb, -1.07% ROI)
or
12/1234/5678 (sweet, +62.84% ROI)

The HANDICAP isn't important. The WAGERING means the world! Just LOOK at that spread. The BAD wager has a 53% LOSS and the GOOD wager has almost a 63% PROFIT! All based on the exact same handicap.

In all my years at the track, I've never seen ANYONE that can improve their HANDICAPPING from a 53% loss to a 63% profit. But you CAN improve that much if you study wagering.

Getting it right
 

Duritz,
This is where Handicapping, pricing (assigning probabilities) betting overs and winning starts.

The key to understanding handicapping is to realize that you can only get so good at handicapping.

Once I get to the point where my probabilities are ACCURATE, then there is absolutely no point in working any more to improve my handicapping. If the probs are accurate, I'm done with improving my overall handicapping skills.

The natural question is, "how do you know the probabilities are accurate?" Well, you cannot test any one race for accuracy. What you do is to handicap a lot of races, and test your overall statistical accuracy. And you do it in a way that gives you great security that the method you are using IS accurate... for EVERYTHING you are doing.

Here's how you do it. First, you use some method to handicap a fairly large number of races. Obviously, the larger the sample, the better you know the accuracy of your handicapping. For now, let's say we handicap 1,000 races. Then you pick out any ONE probability. Let's say we choose the probability that the #1 runner will finish in first place. You take your probabilities for that cell in all 1,000 races, and add up those numbers. (Like .1341 (from above) + .2341 (from the second race) + .1254 (from the third race) and so on. Just add up all 1,000 probabilities that you have calculated. You'll end up with some number, like 156.7342. What that tells you is, for those 1,000 races, according to your probabilities, the #1 runner should have won about 157 times. Then you simply add up the ACTUAL number of times the #1 runner won in those 1,000 races, and compare it to your sum of probabilities. The closer you are, the more accurate your overall handicapping.If you find this hard to grasp, think of it like this. Let's say you have a runner in a race with a 25% chance of winning. That's 0.25, right? Now let's say you have four such races, with one runner in each with a 25% chance of winning. When you add those up, it's .25+.25+.25+.25=1.00. So you would have expected, in four races, that your #1 runner would have won once, on average. (Just what you would expect from 3-1, right?) If you DID have one winner in those four races, you know you're on target, and your probability estimates are right! Cut me some slack on the small sample size. This doesn't really work well with 4 races, but it DOES work just fine with 400 or 4,000. My method is extended to measure dozens of probabilities across hundreds or thousands of races.

Now, that tells you how accurately you have built probabilities for the #1 runner winning. But you should do the same thing for EVERY ONE of the probabilities you have calculated. So I add up the probabilities I calculated for the #5 runner finishing in 8th place, and then check that number against the REAL number of times the #5 finished in 8th place. And so on. You end up with a big matrix that shows you exactly how accurate your handicapping really is.

To measure your overall accuracy, you use a statistical technique called "variance." (Check out any beginning statistics book to understand variance.) Basically, variance measures how far your probabilities are AS A GROUP IN TOTAL from the real results. (Basically, it's the square root of the sum of the squares of the differences between your expected probabilities and the observed percentages.) So you can calculate the variance of the probabilities from the actual results, and you will get some number for that calculation.

Then the exercise becomes to continually try to improve your handicapping. As you improve, the variance will go steadily down. In a perfect world you would keep working at improving your handicapping until your variance is zero, but that's not possible, of course, in the real world. So you work at it until you get to a variance that's reasonable, or until you can't find any more ways to improve your handicapping.

Now another cool part of this is that you can use the exact same technique to measure how accurate the CROWD'S handicapping is, and compare that to your own handicapping as a benchmark. Just change the post-time odds into probabilities, and use the same method! Of course you can also test different handicapping TECHNIQUES to see what works and what doesn't.
Now all this is based on the idea that you can only get so good at handicapping. After all, races are governed by probabilities, and not certainties. Every single runner that races has some real, finite chance of finishing in first place. And a chance of finishing in second, and in third, and in all places including eighth. Granted, they may have a BETTER chance of finishing in one spot or another, but they have SOME probability of finishing in any position.

Further, you must understand that no amount of handicapping can ever get you to the point where you can know perfectly how any given race will finish. You can make projections based on your handicapping, but you cannot KNOW how each race will finish. Your goal becomes to minimize your variance across a very wide range of races, and individual statistics. Once you get it to a minimum, there's no reason to continue trying to improve your handicapping.

So, how do you know when to stop? Actually, that's very easy. Probabilities are a "zero-sum" game. That is, if you look at all possible outcomes of something, their probabilities have to add up to 1.000 or 100%. Let's say you handicap a race, and assign win probabilities to all the runners. If they don't add up to 1.000, you've done something wrong!

But let's say the DO add up to 100%. Your handicapping can now be either good or poor. Let's say it's poor. You've given a runner a win probability of .33 when it SHOULD be .25. You say he'll win more often than he actually would for real. Well, because probs are a zero-sum game, if you OVERESTIMATE one runners chances, you must have UNDERESTIMATED one or more OTHER RUNNERS' chances!

Let's relate this back to the variance method above. Let's say you handicap 1000 races, and your probabilities say you should have the highest-probability runner winning 281 races. If they ACTUALLY won 241, you've overestimated their probabilities. Well, if you look at the OTHER finish positions, you'll find that one or more of them must have been UNDERESTIMATED. So to determine if your handicapping is as good as is possible, you keep working until the differences ON ALL POSSIBLE FINISHES are roughly equal. If you are off by about an equal amount on every possible probability, then you know that your handicapping CANNOT GET ANY BETTER! If, however, you have one or a few segments that show higher and lower variance than average, then you know your handicapping can still improve some.

Amen

Thanks for that.

Have you done analysis to see what the crowd handicapping is like? As you said earlier, the crowd gets it right odds wise but make stupid mistakes, have you tested their win odds and seen if they are basically accurate with that?

Duritz.

The best crowd average is 30% winners for a LOT of -15%.

Well the crowd have to lose 15% b/c that's the TAB take. What I mean is, are their selections winning the amount they should be.