3rd August 2015
For most punters creating their own odds line is considered as a sign that you are at the top of your game. It shows that you have an understanding of value betting and are advanced enough to be able to create an accurate odds lines that can be used as a baseline measurement for determining your bets. But how do we get there?
I think that it’s very important to start this article off by saying that you don’t need to have an odds line to make a profit. In fact you can have a very profitable betting career without ever needing to touch an odds line. You should also know going in that odds line making is not easy, it requires a lot of trial and error and experimentatio to get it working effectively for you. However, when you succeed it is not only very profitable but you also feel like you have succeeded in a big achievement.
So if you’re amongst the brave enough to attempt creating your own odds lines you will want to follow this series of articles that I’m going to be writing about how to do just that.
Today’s article is going to introduce you to creating odds lines and we will look at one approach to making them.
There are a variety of different ways that we can create odds lines. Is one any better than the other? No not really.
It’s more about what works for you and your ratings.
You can create an odds line by using experience and skill where you assign a price to each runner, but the focus of this series is going to be using methods that could be automated and are data based.
This means that we have to start with ratings. In order to create an odds line we need something to base it on, and that something is a rating.
In order to create an odds line you need to have a single rating for each horse. This series is not going to be looking at the details of creating ratings, however ideally you will have a rating that measures various aspects of a horses performance in it and, of course, is as predictable as possible.
With this rating the most common way of creating an odds line is to add all the ratings for each horse together and then divide each horses rating by this total. For example…
Horse 1 = 56
Horse 2 = 75
Horse 3 =23
Horse 4 = 37
If we add all these ratings together we get 191. We now divide each horses rating by this number to get…
Horse 1 = 0.29
Horse 2 = 0.39
Horse 3 = 0.12
Horse 4 = 0.19
These numbers will always be less than 1 and they are the probability of each horse winning based on your rating. This means that horse 1 has a 29% chance of winning, horse 2 has a 39% chance of winning etc… To change these into odds we divide 1 by each of the horses ratings to get…
Horse 1 = 3.45
Horse 2 = 2.56
Horse 3 = 8.33
Horse 4 = 5.26
At first glance this looks like a very good and effective method to use.
Unfortunately this is not the case.
In the example above the ratings given to each horse are very well spread out. In reality this seldom happens and you have a lot of horses with very close ratings which results in horses having very similar odds. Give it a try now. Take your favourite ratings and do these calculations for a few races and you will see exactly what I mean.
So how do we prevent that from happening?
We raise our ratings to a power. If we raise the final rating we are using to a power of above 1.00 before we add them together then it will make the differences between the numbers great, if we raise it to a power of below 1.00 then we bring them closer together.
For example if we raise the ratings to a power of 1.50 then we get…
You can see that the difference between the odds is bigger than before raising it to the power of 1.50. If we had raised it to the power of 0.50 then we get…
As you can see the odds are now much closer together.
Try doing this to your own ratings and find what you think is the best power for your ratings.
Back next Monday.