Another installment in MP's great wagering series.
One of the keys to managing your bankroll is to determine how much you should bet on each fight. There are two methods to consider: straight bets or scaled bets. Each has their own merits, choosing which is mostly a matter of preference.
Straight betting is simple. You bet the same amount for each fight, regardless of how big your edge is. So, if after handicapping a fight, you find your EV to be positive, you would place a bet. The most typical advice is to bet between 1-2% of your bankroll using this method. Betting this way should insure yourself against going broke assuming a) you are at least break even, if not moderately successful and b) you don't hit some crazy downswing.
The obvious downside of using strict betting amounts is that you might be losing value. Intuitively, if you think you have a fairly large edge on a bet, it makes sense that you would wager more than on a bet you thought you only had a small edge. Betting this way allows you to maximize the long term growth of your bankroll. The best formula to do this is known as the Kelly criterion. I highly suggest you click the link and read up on Kelly wagering, specifically the "disadvantages" section. The formula for the optimal betting amount (which is shown better in the wiki link) is as follows:
W = (bp - q) / b
W = the fraction of the current bankroll to wager
b = the odds received on the wager
p = the probability of winning the bet
q = the probability of losing the bet (which is also 1 - p)
This may look scary for those mathaphobes out there, but it really is a very simple formula for anyone to use. Let's continue to use the Anderson Silva -150 bet where we think Anderson is actually a 65% winner in his fight with Dan Henderson. Using this formula, we would plug in the following numbers:
b (odds received) = 100/150 = .67 (for reference, the opposite line of +150 would end up being 1.5)
p (probability of winning) = .65
q (probability of losing) = .35
Which looks like
W = (.67 * .65 - .35) / .67
W = (.4355 - .35) / .67
W = .0855 / .67
W = .128
Under our handicapping, Kelly would recommend we wager 12.8% of our bankroll on Anderson Silva. Again, I recommend reading the wiki link and focusing on the "Disadvantages" section. I would be happy to answer any questions regarding the Kelly system.
To be successful betting any sport, you must be able to do one of two things. Either 1) you must be privy to information not available to the public or 2) be able to use public info better than other people. Most of us will never be in a position to have information exclusive to ourselves or a small group of others. As a result, we must rely on the ability to manipulate readily-available data.
Having tape of the fighters involved is clearly the most important data to have. The best video to have is a fighter's most recent fights and also his fights against opponents with similar styles or abilities as his upcoming opponent. When you watch tape, you want to figure out what his strengths and weaknesses are, and more specifically how those strengths and weaknesses complement his opponent. For instance, Cheick Kongo is very weak off his back, but that weakness means very little against Mirko Cro Cop, who will generally choose to keep the fight standing.
Watching tape of both fighters is usually enough to give you a good idea of how you think the fight will go. There will be times, however, when fight film alone is insufficient or lacking. At that point, you will have to find other sources of information to help guide you.
One source of information that can help supplement you is the weigh-ins. Did a guy have to cut a large amount of weight that could affect his energy levels at fight time? Did someone come in significantly under the weight limit? Does one fighter look larger than the other, side-by-side?
Other useful bits of info:
- Did the fighter have enough time to properly train?
- Has the fighter been knocked out in his last fight?
- Is the fighter comfortable and/or experienced with the rules and fight environment?
- Does the fighter come from a solid team/camp?
- Which fighter has more to gain or lose from the fight?
My UFC 82 picks:
Heath Herring +145 1u to win 1.45u
Alessio Sakara +135 .5u to win .675u
Jake O'Brien +275 2u to win 5.5u
Yushin Okami -165 2u to win 1.21u
Note: 1u = 1 unit = 2% of my bankroll
I'm pretty satisfied with the Okami and Herring bets, am "meh" on O'Brien and Sakara.
With O'Brien and sakara, I decided to make bets when the lines open so I wouldn't kick myself later if the lines moved. O'Brien moved to +260, so I'm pretty happy there. The thing I'm worried about with him is that while he has pretty good wrestling, from the tape I've watched, he doesn't seem to be really great at controlling and staying active on top.
With sakara, I saw a guy coming down in weight who has pretty good hands up against a guy who likes to slug and could probably move down to 170. I'm worried that I might be underestimating Leben's wrestling, which could be enough to beat Sakara. I'll have to watch more tape on the two, but it's a small bet that I'll probably end up riding.
As I said above, I'll try and answer any questions you have about the Kelly system. I'd also like to find out what sort of things you guys would like to see me write about. Thanks for reading.