Hi everyone, hope you had a good easter, a profitable one at least...

Here's a question that'll get your grey matter thinking...

Now we have all heard that Pro-Punters price their own selections, but the question is How?...

Before you jump in, let me say....

I have read many articles on the subject and have yet to find one that stacks up to the test...

If I have 10 ping pong balls, numbered 1-10 and put them in a jar, reach in and take out one, the chance of my guessing the right number is 1 in 10.. Right? if I repeat the exercise a million times I should reasonably end up with approximately 100,000 counts for each ball... Ok... that's just maths..

Now if I take one of the balls and use a hypodermic needle and give it a shot of water (don't want to waste the scotch), it will shuffle to the bottom of the barrel and not be drawn out so many times, with the other 9 having proportionally higher hit rates..

If I know through testing that on average the weighted ball comes out once every 15 times and I was to play bookie and offer odds of 16 - 1 ($17.00) on that ball I would slowly go broke and if I were to offer $15.00 (14-1) I'd slowly make money.

Because the rate of payout is more or less that the actual odds of the event occuring... Eveybody see my drift?

Now... In horseracing the odds are framed by professional handicappers and bookies "tune" their odds during betting to balance their books. Typically they aim to make a percentage market of 20-30%.. (Sometimes more, sometimes less)

But if you can ACCURATELY price the runners in a race you could make a fortune by betting only when the available fixed price odds exceed your pricing, regardless if the runner is at $2.00 or $200.00...

For those unfamiliar with the rules of betting, bookmakers (on course) are required to bet to lose a fixed amount, typically $1,000 for country events and $5,000 for city meetings. Therefore if anyone tells you that they got a bet on at $100.00 and bet $1000.00 I suspect it's bunkum!

In the main most bookies rarely get bets over $10.00 (pricewise) and whenever a $15+ winner gets up, most bookies would not have to pay out at all meaning they make 100% profit on the race.

Anyway, what I'm driving at is that if you can consistantly price your selections against their possibility of winning you can make lots of money..

I have tried many methods and simply don't come anywhere close to the pricing offered by markets... For example when you see a $2.00 price on the board, that runner should win 50% of their races.... Now they don't do that do they??

So the pro-handicapper has built in a 35% margin into the pricing to start with (check the morning papers and you'll see markets to 50% profit and more) but even with this profit margin built in, I still can't get close to the Price Vs Probility equation....

So how do the Pro-handicappers come up with the markets?, is question one and how do we punters come up with a reasonable market based against probility ? is question 2..

Calculating market margins for those who don't know, take each price and divide it into 100... This is then it's percentage... Add all of them up and you'll get a number like 130% - 145%.. Typically for a TAB you'll get 120%.. since there can only be 100% of anything the 20% difference is profit...

Ok, so who prices their own selections and what formula do you use?

If runners priced at $2.00 don't win 50% of the time, then logically all punters must lose over time? Which when you think about it is rather true don't you think?

It is only when you can weed out the losers from the winners at a given price can you expect to make a profit... Say we have 10 runners in 10 races at $2.00.. we know that 5 should win, but probably wont.. If we can fine down to the two or three that do win we have an overlay at $2.00 for those runners and an underlay for the remainder. (except the ones that were in our group and lost as expected)


Kind Regards
OzPunter

so take any reliable market and only bet when you can obtain double the quote, you have to win.... right?

Hi PartyPooper,

That's partly right but it goes a lot further... If you bet on something where the price you are getting is greater than the probility of occurance, you'll end up with a surplus. (Winning more than you loose).

The trick then is where do you get a reliable probabilities market?

In fact there are two "markets" at play here, one which is the true probability of a horse winning a race and one which reflects the mood of the betting public, which is a bookies market or a tab market...

Just because a bookie or the TAB has a runner listed at $2.00 dosen't mean that the runner has a 50% chance of winning a race.

The right answer is to obtain a true "probabilities" market and compare it to the bookie "peoples Mood" market and bet only when the price available is better that the probabilities market. The alternative is to "Lay" the runner by betting on betfair, for example...

Every runner is a posibility to make money, either by Betting or Laying depending on the available price vs its probability of winning...

The chalenge is to work out the probability of winning for each runner...

Regards
OzPunter