Are your bets based on Luck or Skills or those of the tipsters you follow?
With a small number of bets, luck can play a huge role in your betting success.
That is why it is important not only to base your success on whether a bet has been won or lost, but to look at other indicators further.
Larger sample
Now, when it comes to betting results, I think we need to understand that this will be a combination of luck and skill. In the short term, there is no way to know which bet will lead to a profit, each individual isolated bet can be a winner or a loser. Absolutely no skills are required to make a winning bet and this is not a reflection of your skill level. It’s the same if you end up losing a bet, so your short-term results will almost always have an element of luck.
However, long-term results are much more weighted than your skill level, not how lucky you are. You can’t keep your luck in your career. So, if you experience net winning results from betting on a large sample of trades while following a strategy or structure, it is almost certainly a consequence of your skills, not your luck.
Edge – Closing Line Value
Our ability to assess probabilities of exit better than the bookmaker is key – we are essentially looking for “value” and this will be the deciding factor in determining skills. However, this process must be repeated more than once and must be confirmed by the closing line.
Pinnacle’s closing prices provide one of the best measures of the probability of a “real” result – the amount you constantly beat will provide a very good indication of whether you are qualified enough to exclude luck from the equation.
The lower the margin, the more efficient the market and the higher the confidence of bookmakers. You should expect to be able to beat a market that routinely bets up to 102% with a much lower margin than a bet up to 110%, even if that seems counterintuitive. You can find bets with a lower value at 110%, but the error margin is often much higher than the additional margin added by the bookmaker.
Closing line – if your model contains information that the market does not yet know, the theory is that the odds will move to adjust it once you have discovered it in the market. This means that once you bet, the odds must be lower if you have the skills. The theory also says that the most accurate coefficients are the closure coefficients. If you can systematically beat the closing factors, you have the skills. If you beat them by more than the size of the margin, then you have a skill that can provide you with long-term profits.
Not everyone believes in the hypothesis of the value of the closing line. It is probably more reliable in larger, more efficient betting markets with more players and more liquidity.
Its advantage comes from offering a much faster answer to the question of luck skills.
Equal levels of bets
How is my betting strategy presented? It is surprisingly easy to make a betting strategy look profitable by raising / lowering bets under certain conditions. But if disproportionately large bets are the only reason you are green (or red), then you need to undo their impact to be sure of your performance. Assume that all stakes in your sample are the same size. If your results are positive and stable, it means skills, not luck.
T-test (P-value)
t-test / z-test – This tests how likely it is that the results you have happened by chance, assuming that you do not have the skills to affect these results. The less likely it is that what you see happened by accident, the more confident you can be that it did not happen by accident. This leap from probability to judgment is subjective. The test does NOT tell you the probability of being qualified, but only the probability of seeing what you see, assuming you do not have the skills. It is my opinion that you want this probability to be less than 0.1% before you even start to think that it is worth making any subjective assessment of your skills at all.
The T-test examines the probability of winning a series of bets by accident.
The T-test simply compares the gambler’s observed return with a theoretical expectation (assuming only a chance) determined by the market in which they are betting.
This would usually be a loss equivalent to the bookmaker’s margin, or a break if the bettor struggles to find the best prices using a odds comparison tool. The resulting t-score is then analyzed to determine if the difference is statistically significant.
We have created a scheme that you can use to calculate the p-value of certain bets, so you can see how likely they are to happen by chance.
Finally, there is one thing you should NEVER, NEVER use to answer this question: the size of your bank balance sheet. This correlates only with the size of the ego, which is not a good measure of gambling skills. Humility and the acceptance that most of what you see in betting is noise and chance are much better predictors of success.
If we missed something, add it in the comments