Two Plus Two Poker Forums A winning formula in Horse Racing (hopefully)
 Register FAQ Search Today's Posts Mark Forums Read TwoPlusTwo.com

 Notices

 Sports Betting Discussions related to wagering on sporting events.

 06-14-2015, 10:41 PM #1 sharks88 stranger   Join Date: Jun 2015 Posts: 1 A winning formula in Horse Racing (hopefully) Hi all, This is my first post - although I've been an avid user of the forum for some time, but with not much to add in the way of valuable information I've remained quiet till now. I'll just preface this with the fact that I am not naive enough to think that I have just cracked the betting code or found the holy grail; however, I do believe I've found a genuine edge. So here it is... I concentrate on UK Horse Racing only, specifically only handicaps races. What I've done is generated a method for calculating variables ('pace', 'trainer form' etc. etc.) that I believe to be significant to finding the winner of a race at a better rate than the betting public. I've returned an 8% ROI from 2009-to date. Not much? Perhaps, but it's sustainable. Below are the vital statistics. Runners: 8,577 Winners: 1,549 Strike Rate: 18.06% P/L: 668.53 ROI: 7.79% Exp Wins: 1,401 A/E: 1.11 So, what am I asking? While I'm no stranger to computation techniques I'm asking for advice on backtesting this method - specifically to see how viable it is going forward. I've performed a confidence interval on my "test" sample (I've split up into 3 equal parts; Test, Development and Forecast) and the results are below; CumPL Mean 95.50430493 Standard Error 0.836316975 Median 93.63225 Mode 90.195 Standard Deviation 44.70972765 Sample Variance 1998.959747 Kurtosis -0.41541084 Skewness 0.209192238 Range 212.404 Minimum -4 Maximum 208.404 Sum 272951.3035 Count 2858 Confidence Level(95.0%) 1.639845865 I also performed a CHI.SQ test with the following results; Chi Sqr Exp Wins: A/E 0.52% 462.05 1.12 I'm not sure where to start with interpreting the above results? So if a better statistician can help I'd be ever so grateful. Or, suggest a way to better test the data, etc. Thanks in advance.
 06-18-2015, 03:06 PM #2 Wamy Einehouse rack 'em     Join Date: Dec 2008 Posts: 4,652 Re: A winning formula in Horse Racing (hopefully) I can possibly help, but need some more info if you're happy to answer the below: 8% roi here is your bets over that period correct (eg this number doesn't come the back test)? If yes, what bookmaker/exchange were they with and what was the bet sizing/timing (was this on sp prices or the morning opens)? Was it jump or flat and what's the typical grade?
06-19-2015, 08:10 AM   #3
jukofyork
Carpal \'Tunnel

Join Date: Sep 2004
Posts: 11,595
Re: A winning formula in Horse Racing (hopefully)

Quote:
 Originally Posted by sharks88 I've performed a confidence interval on my "test" sample (I've split up into 3 equal parts; Test, Development and Forecast)
1. How strict were you with this (ie: was the test set kept completely separate during development or did you ever go back to the development stage to "tune" anything and then return to the test set...)?

2. Did you come up with a single hypothesis, develop it and then test it (ie: as opposed to coming up with a whole bunch of possible hypotheses, developing them all and then seeing if any had good test results...)?

Assuming you answered yes to both of the above, then:

How variable are the odds and the bet-sizes? If you're testing wildly disparate odds and/or are using some sort of variable-sized staking system, then the parametric statistics you've posted above might be (very) overly optimistic... Try Bootstrapping and see what fraction of the bootstrapped samples have an ROI lower than zero, etc.

Also, is your system producing a predicted win probability (as opposed to just making binary yes/no selections)? If yes, then you can do further tests with this in mind (eg: compare Pseudo R-squared vs the public's implied probabilities, etc).

If you're interested then here are a couple books you might find helpful:

Precision: Statistical and Mathematical Methods in Horse Racing by C X Wong

Assessing and Improving Prediction and Classification by Timothy Masters

You also might find this interesting, with regard to the dangers of bias during systems creation:

Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals by David Aronson

Juk

Last edited by jukofyork; 06-19-2015 at 08:15 AM.

 06-19-2015, 08:23 AM #4 ExaMeter Pooh-Bah     Join Date: Jul 2006 Posts: 3,985 Re: A winning formula in Horse Racing (hopefully) Juk, could you briefly explain why #2 would be a problem please?
06-19-2015, 08:48 AM   #5
jukofyork
Carpal \'Tunnel

Join Date: Sep 2004
Posts: 11,595
Re: A winning formula in Horse Racing (hopefully)

Quote:
 Originally Posted by ExaMeter Juk, could you briefly explain why #2 would be a problem please?
Your test set is no longer an unbiased estimate of future performance... For a really simple example to see why then consider this:

Imagine you generate a single sample from a uniform random number generator (ie: between 0 and 1). Then on average the number will be 1/2 (ie: it's an unbiased estimate of the mean of the distribution).

Now consider that you generate two uniformly distributed random numbers and take the maximum of them. Then on average the number found to be the maximum will be 2/3 (and is thus no longer an unbiased estimate - see the picture in the second post of this thread to see why).

and it gets even worse if you were to take the maximum of 3 or more uniformly distributed random numbers...

So now imagine instead of random numbers you have a bunch of systems/models that you've data-mined, but (unbeknown to you) none have any predictive power at all and they also all show significant variance about their test results (ie: due to the test sample size being too small, etc). If you take the best system produced from these, then the performance estimated on the test set will likely be nothing like what you'll get in reality (ie: it's been biased to give an overly optimistic estimate).

One way round the above problem is to save yet another independent "final" test set and then re-test the best model you've found on it, BUT: for this test to be truly unbiased you have to resist the temptation to go back and try the second best if this proves to be a poor performer, etc...

You can also try to use the statistical methods outlined in the David Aronson book linked above to correct the overly optimistic estimates found by mass-testing hypotheses.

If it's still not clear then the books by Timothy Masters and David Aronson listed above give a much better explanation of this than I can.

Juk

Last edited by jukofyork; 06-19-2015 at 08:57 AM.

 Thread Tools Display Modes Linear Mode

 Posting Rules You may not post new threads You may not post replies You may not post attachments You may not edit your posts BB code is On Smilies are On [IMG] code is On HTML code is Off Forum Rules
 Forum Jump User Control Panel Private Messages Subscriptions Who's Online Search Forums Forums Home Links to Popular Forums     News, Views, and Gossip     Beginners Questions     Marketplace & Staking     Casino & Cardroom Poker     Internet Poker     NL Strategy Forums     Poker Goals & Challenges     Las Vegas Lifestyle     Sporting Events     Other Other Topics Two Plus Two     About the Forums     Two Plus Two Magazine Forum Marketplace & Staking     Commercial Marketplace     General Marketplace     Staking - Offering Stakes     Staking         Staking - Offering Stakes         Staking - Seeking Stakes         Staking - Selling Shares - Online         Staking - Selling Shares - Live         Staking Rails         Transaction Feedback & Disputes     Transaction Feedback & Disputes Coaching & Training     Coaching Advice     Cash Game Poker Coach Listings     Tournament/SNG Poker Coach Listings Poker News & Discussion     News, Views, and Gossip     Poker Goals & Challenges     Poker Beats, Brags, and Variance     That's What She Said!     Legislation for Poker & Income Taxes for Poker Players     Twitch - Watch and Discuss Live Online Poker     Televised Poker General Poker Strategy     Beginners Questions     Books and Publications     Poker Tells/Behavior, hosted by: Zachary Elwood     Poker Theory     Psychology No Limit Hold'em Strategy     Medium-High Stakes PL/NL     Micro-Small Stakes PL/NL     Medium-High Stakes Full Ring     Micro-Small Stakes Full Ring     Heads Up NL     Live Low-stakes NL Limit Texas Hold'em Strategy     Mid-High Stakes Limit     Micro-Small Stakes Limit Tournament Poker Strategy     STT Strategy     Heads Up SNG and Spin and Gos     Mid-High Stakes MTT     Small Stakes MTT     MTT Community     Tournament Events Other Poker Strategy     High Stakes PL Omaha     Small Stakes PL Omaha     Omaha/8     Stud     Draw and Other Poker Live Poker     Casino & Cardroom Poker         Venues & Communities         Regional Communities     Venues & Communities     Tournament Events         WPT.com     Home Poker     Cash Strategy     Tournament Strategy Internet Poker     Internet Poker         Global Poker         BetOnline.ag Online Poker     Commercial Software     Software         Commercial Software         Free Software General Gambling     Backgammon Forum hosted by Bill Robertie.     Probability     Sports Betting     Other Gambling Games 2+2 Communities     Other Other Topics         OOTV         Game of Thrones     The Lounge: Discussion+Review     Las Vegas Lifestyle     BBV4Life         omg omg omg     House of Blogs Sports and Games     Sporting Events         Single-Team Season Threads         Fantasy Sports     Fantasy Sports         Sporting Events     Wrestling     Golf     Chess and Other Board Games     Video Games         League of Legends         Hearthstone     Puzzles and Other Games Other Topics     Politics and Society     History     Business, Finance, and Investing     Science, Math, and Philosophy     Religion, God, and Theology     Travel     Health and Fitness     Laughs or Links!     Computer Technical Help     Programming

All times are GMT -4. The time now is 11:32 AM.

 Contact Us - Two Plus Two Publishing LLC - Privacy Statement - Top