Quote:
On 2003-11-01 03:41, crash wrote:
Chrome,
I'll have a go at a reply.
What you were saying sounds correct on paper but you cant work out things like profit = 500% but risk was 600% [?]. The method is known as "Special pleading"[create a false "fact" and then base your argument on it]. The only fact is the 500% profit, not the 600% [or whatever] risk.
Risk [odds if you like] is a subjective thing in horse racing as in everything and can't be measured with maths [the goal of a system creating a golden egg], If so there would be a maths formula to work out precise odds of a horse winning which as you know, can't be done. Your 600% [or whatever] risk might have in fact been .01% or 1000% depending on the subjective measure [point of view or a collection of subjective measures].
Such things as tossing a penny can be worked out as a 50% chance of head or tails being equaly thrown in eventual totality [pure maths] but not where you are going to be score wise even after a million future throws. You could be rich or you could have lost a fortune and your shirt at any future point.
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Hi crash,
I'm interested as to why you think that profit can be measured but risk cannot.
As you outlined one cannot be 100% accurate as to a horse's actual chances, BUT if you have for example 1000 bets and 50% of them win and your average dividend is $2.20, it really doesn't matter what odds an individual horse should be.
You still end up that you have a 50% chance overall so you are making 20% profit.
Of course there will be horses you consider have a 50% chance but have less, and others which have an 80% chance but you rated only a 50% chance.
Looking at it as a group of bets rather than the individual.
I calculate risk as the maximum drawdown as a percentage of the starting bank.
EG
Bank = $1,000
Maximum Drawdown $48.50
Risk = 4.85%
This is the risk of going bust on this particular series, you can shuffle the results various ways to see worse case scenarios etc.
This is also the reason that I take a series of results and shuffle lots of times and record the various patterns. I think I mentioned earlier, that you could be lucky and win straight away and never touch your starting bank too much, but at a different point you'd half lost half.
This is why I measure maximum drawdown from the highest point of the bank to the next lowest and apply that figure to the starting bank.
Others calculate it differently, but kid themseves that they had 0% risk, which is inconceivable.
You make some good points crash, thanks for your reply.
[ This Message was edited by: Chrome Prince on 2003-11-01 11:46 ]