Is the betting market efficient? Do betting odds reflect the true probability of each outcome? I myself cannot answer that. Yet, others have done so and based on their studies, I’ve thought of a betting system that exploits market’s inefficiency. If the system shows a profit after a big sample of bets, sports betting market is not efficient. As simple as that.
If you are reading this article, most likely you have seen one of my betting tips I share at social networks. They are easy to stand out from my regular updates, as they begin in the same way as this very post: “betting against the trend”. So, what are these betting tips I’m talking about and why should you care in the first place?
A betting system promising to make you wiser
No, this is not a betting system giving big promises of untold wealth and making the author look like an idiot. You won’t become rich, you won’t make a fortune by following the tips. No one guarantees that it’s a profitable system after all. You might lose money with it! I am still testing it. And while I am trying it out, I thought of sharing the process with the world.
Instead of making you rich though, I expect it will make some of you wiser bettors. Most bettors fail to realize the importance of keeping track of their betting activity. By doing so, they are unable to prove they are winners. Sure, their growing betting account might be a clue, yet how can they know if they have just been lucky?
Thus, by watching me post my betting tips regularly and monitoring the performance of this betting system, perhaps you will develop a keen interest in doing the same thing in your own betting. Please, do write down every bet you take. You’ll thank me later.
Still, that process will only make you a more disciplined and methodical bettor. I’ve talked about wisdom. How will you become wiser, better, successful punters?
By understanding why a profitable betting system works!
If my betting system works, sports betting market is inefficient
Not just MY betting system, but any betting system showing a steady profit over a big sample. By making money in sports betting, you are in fact value betting; that is betting on value odds. Would you bet at 2.20 odds on a coin toss? I am sure you would.
Those odds are hard to come by though. That is why it’s difficult to make money in the long run by betting on sports. Because the market is so efficient, that most betting odds have no value.
Wait, maybe it’s because we always seem to pick the wrong odds. Really? Are you going with that? Are we THAT unlucky or stupid to keep on betting at 1.85 on a coin toss every single day??!
If up to now you are losing money, it doesn’t necessarily mean the betting market is inneficient. On the contrary, it may actually be SO efficient, that you are losing due to the bookmakers’ vig. You know what vig is; it’s when you see odds of 1.90-1.90 on a 50-50 chance game, instead of 2.00-2.00. See, it gets worse: value is not just zero, it is negative!
These betting operators have to stay in business somehow, hence the somewhat lower odds. But we’ll talk about that in another article.
Let’s stick to this betting system for the time being.
My main concern for years has been whether the sports betting market is truly inefficient. In all honesty, I doubted that was the case, that’s why I had stayed away from betting and focused on sports trading. But that’s history now, and since I quit trading sports, I had no interest in giving betting a go.
That changed a month ago, when I came across a couple of university studies. This one in particular discusses the inefficiency in NFL betting markets. And although I have no idea how American Football is played, the study not only proves that the markets are indeed inefficient, but explains why’s that as well!
Inefficient betting markets due to biased sports bettors!
Ok, that actually took me by surprise! I hadn’t ever thought of it in that way. The author explains how winning and losing streaks, upsets and surprises really affect punters’ betting patterns. Ehm, how really?
Biased bettors tend to overvalue home teams being on a winning streak or having scored a big unpredictable win the last weekend. On the other hand, they tend to undervalue away teams losing one game after the other, or big favorites losing a ‘sure thing’.
Therefore, one way to exploit this bias is to bet on away teams that are on a losing streak, or to bet on big favorites coming from an upset. But that’s not what my betting system is about.
Bettor behavior affect betting lines and odds
I don’t have the time to check out team stats, previous records and scorelines. I’m not a full-time sports bettor.
I do have time to check out odds movements though. I always did by the way, while I was trading betting odds. I was glued on a screen, watching odds dance around as punters kept on betting till the last second. Those were the times.
These betting odds are moving up or down due to news, rumors, tipsters and… you guessed it, bettors’ bias, among other reasons.
Bettor behavior can affect betting lines so much, that odds can drift from 2.00 to 2.80, or drop from 3.50 to 2.30. And those are not the most extreme odds movements I have experienced.
Armed with the knowledge I acquired by reading the study by the undergraduate student of New York University, I now had a good reason to bet against the trends!
If odds are moving down, bettors are biased and overvalue that team. My system suggests a bet on the opposition of course. If odds are moving up, punters undervalue that team. My betting system recommends backing that team! Besides, the odds offer a more generous reward in both scenarios. And risk/reward ratio is paramount, something I often discuss in my articles.
So, there you have it. That’s my simple betting system, according to which I post my betting tips. Obviously, it’s too early to figure out if I am going to be profitable betting in that way. But if ROI is positive after a considerable amount of testing time, I will have every reason to believe I am exploiting market’s efficiency. In other words, I exploit other punters’ bias. And you might be one of them!
Follow me at Google+, Twitter, Facebook or any other social network and you’ll hear of my betting tips. I always mention performance stats, like ROI, average odds and win percentage, so that it’s perfectly clear if this betting system scores or flops! And if you do follow me, restrain yourself from betting, until there’s adequate data to back up these words!
