NLHE Betting system..........

[Beermantm]

Since a few people want to know about this I will have to do some work making this thread up. I will first explain some stuff about sports betting and how books handle bankrolls. Then I will explain how professional sports bettors handle bankrolls and betting. Finally I will make you understand how this thinking can be applied to NL Holdem. After I get through that mess I will try to explain the betting system I made to apply mostly to cash games. I probably can't get to deep into it because it would take a book to do it but I can explain a general way to think about it.

Give me a bit of time to get all my info together.

[Beermantm]

I coppied this article from the professional gambler website and it provides some basic info about betting sizes and deviation. It can save me a bit of time explaining everything. If anything I post has to be taken down Please be aware I'm not trying to promote sites or anything else but rather just pulling some information together. Sorry in advance if anything is inappropriate.


[ QUOTE ]


A BIT ABOUT BETTING SYSTEMS

...or, Why the Size of Your Bet Can't be Used as a Pry-Bar to Make More than You Deserve



Even if you have a long term advantage against pointspreads and over-under lines, you will go broke with the use of faulty money management. For our purposes here, we'll say you have a 57.5% winning expectation on each and every bet. (Of course, the actual winning expectation is rarely the same on any two bets, - but our record shows we average between 55%-58% over the very long term.)

...So, how many winners can you expect in the next, say, 21 bets? Well, 57.5% of 21 is 12.075, so the answer figures to be 12, producing a win-loss record of 12-9.

Trouble is, a record of 12-9 is not the only thing that can happen. There are several other results that are also very likely, and some of these other results are not good. The graph below shows the binomial distribution of all the possible outcomes.



Notice that although a result of 12-9 is the most likely of all outcomes, a result of precisely 12-9 will occur only slightly more than 17% of the time. That's only about one time in six. In real life, you can figure on a record of something other than 12-9 about 5 out of 6 times.


With a 57.5% expectation-per-bet, you can plan on making any profit at all only about 60% of the time over your next 21 bets. In 4 out of 10 cases, you can expect to win less than twelve out of 21 bets. Even with a 57.5% winning expectation on every bet, you must be aware that it is just as easy to go 7-14 (or worse!) as it is to go 17-4 or better. Once in about 8 times you can expect to lose 13 or more of your next 21 bets. By understanding the consequences of the probabilities involved, you can avoid the disastrous results of using such nonsensical money management traps as the so-called 'Kelly criterion' or the suicidal 'one-star, two-star, three-star' nonsense, or other progressive betting schemes.


In our book, How Professional Gamblers Beat The Pro Football Pointspread, we explain why most people go broke betting on sports because they don't understand the ramifications of the probabilities; - not because they can't call winners. They are victims of the fallacy that progressive betting schemes can produce more profit than they deserve.


Over the course of an entire NFL season we figure to have upwards of 210 opinions against pointspreads and totals, - but that does not mean we can view those 210 opinions as though they were ten individual 'blocks' of 21 bets. The 210 opinions can be regarded as a continuum of bets from 1 through 210, or a continuum of 21-block units from 21 through 210. Bets 1 through 21 comprise the first such block, bets 2 through 22 comprise the second block, bets 3 through 23 comprise the third block, etc...Within 210 consecutive bets there are 189 blocks of 21 consecutive bets.


Since there are 189 'blocks' of 21 consecutive bets in a series of 210 bets, it's virtually a sure thing that we will have more than one block wherein our record will be WORSE than 8-13, and it's also pretty much guaranteed that we will have more than one 'block' wherein our record is better than 16-5. Neither of these results means we are performing better or worse than our normal level of handicapping. Such results are caused by wholly normal and natural fluctuations from the mathematical expectation - binomial distribution.


As publishers of Professional Gambler Newsletter, we've found that starting off with EITHER a winning streak or a losing streak can be bad for subscribers to a newsletter, and also even bad for the newsletter. Of those people that subscribe to Professional Gambler at the beginning of a winning streak, some will think we are 'smarter' than we are. They will be tempted to risk too much of their bankroll per bet. They will go on to bust out when we hit a losing streak, - which we most certainly will do.

If we start them off with a losing streak, of course, some subscribers will quickly decide we are 'dumber' than we are and ignore our advice.


The trick is to be ready for the ups and downs that are bound to occur simply due to the mathematics of the situation. With upwards of 210 opinions against NFL lines, we do expect an overall win rate in the area of 57.5%, but we also fully expect a very bumpy ride along the way. Against the NFL, to insure that you'll still be alive in January, we highly recommend a bet size of no more than 2% of your bankroll. Guarantees come with toasters, not football bets, but we are confident we can offer you a pool of 55%-60% winners from which to make your own choices over the entire NFL season. How many bets we might win over the next ten or twenty tries, however, is hardly more than a guess. Scale your bet sizes so you'll be alive in January. Refrain from 'jiggling' the size of your bets; keep all bets the same size.

[/ QUOTE ]

[Beermantm]

Another article about money management as it applies to sports coppied from a friend of mines web site. Very short explanation and quite a consevative approach. The sportsbooks take a similar approach though.

[ QUOTE ]
Overview

Are you new to sports betting? Or are you an experienced sports bettor looking to stop gambling and start investing? If so, then this article will help you reduce your risk and generate higher returns from your sports wagers.

Outlined below is a proven method for managing your sports betting bankroll. Successful sports bettors use this technique, called flat betting, to generate a profit from their sports wagers.

[Top]

The purpose of money management

The purpose of money management is to provide you with the ability to continue wagering on sports during the inevitable losing streaks. By properly managing the money you have available to wager on sports you will have completed the most important step to turning a profit from your sports wagers.

The money you have available to wager on sports is a finite amount. Because of this harsh reality, you must use a strict money management plan that will reduce your risk. You must first start your money management plan with determining the size of your sports betting bankroll.

[Top]

Determining the size of your sports betting bankroll

The easiest way to determine the size of your sports betting bankroll is to ask yourself this question: "How much am I willing to risk betting on sports?" Do not read this as the amount you are willing to risk on each wager. The answer to the question should be the total sum of money you are willing to risk wagering on sports.

The size of your bankroll should be a tangible amount that you have available to you. You should not be wagering your mortgage payment, or the money you have available to purchase food with.

Once you have determined the size of your sports betting bankroll it's time to calculate the amount of money you will risk on each wager.

[Top]

Calculating the size of your wager

Sports betters make three common mistakes when calculating the size of each wager they make. They risk too much on each wager in relation to the size of their bankroll, they wager different amounts of money on each bet based on a perceived strength of the play, or they change the size of their wager based on the posted odds.

You should calculate your wager size as being 1% of your beginning bankroll. (Below I outline when you should re-calculate your wager size.) This is, however, a fairly conservative amount. If you risk anything over 2% of your bankroll, however, on each play you put yourself at risk to losing your entire bankroll to a losing streak.

For example:
To be a $100 bettor you should have a $10,000 bankroll ($10,000 x 0.01 = $100.00).

If playing 1% of your current bankroll is not enough for you then you should save until you build a bankroll that allows you to be satisfied with risking 1% on each wager.

Do not fall into the trap of changing the amount you wager on each bet based on a perceived strength. By using a method for rating plays based on a perceived strength you will be risking too much on each play, and you will ultimately cost yourself money over the long haul because of losing streaks.

For example: This example assumes odds of -110 (11 to win 10)
You risk 5% of your bankroll on a play with a 75% expected winning percentage. At the same time you risk 3% of your bankroll on a play with a 60% expected winning percentage. Now it's obvious an event with a 75% chance of occurring will happen more often than an event with a 60% chance of occurring.

The problem with risking different amounts on each play, however, is that you have an edge in both cases, but you are costing yourself money by not risking the same amount on each play. By playing 1% of your bankroll on each play you reduce your risk to sustain the losing streaks, and you don't cost yourself money on both advantageous situations.

One final point about the size of your wager: this is the amount you are going to risk on each play, not the amount you're going to win. Changing the size of your wager to win a certain amount based on the posted odds will only cost you money. This is because you will lose a greater percentage of your bankroll when you lose.

If you're still not convinced then take this food for thought: many online sportsbooks will, by default, assume the amount entered to wager is the amount the customer wishes to win. Not only does this get the customer focusing on how much they're going to win, but it increases the customers risk helping to make the sportsbook more money.

[Top]

When to change your wager size

You should change your wager size when you have reached a set threshold. I suggest you set this threshold at 20% of your beginning bankroll.

Start with a 100 unit bankroll and risk 1 unit on each play (1% of your bankroll). Recalculate the size of your wager once you have a bankroll of 120 units (a gain of 20% of the original bankroll size). Continue to follow this basic pattern for changing the size of your wager as your bankroll will again be 100 units and you will risk 1 unit on each play (1% of your bankroll).

[Top]

Summary

If you are serious about obtaining a profit from wagering on sports you must commit yourself to a strict money management system like the one outlined above. This money management system combined with a solid handicapping regime will give you the best chance to be a successful sports bettor.



[/ QUOTE ]

[Beermantm]

Here is another article I wrote from my forum..........

Well it seems to me the games are not going against the public so much lately and it may cross people's minds about how the books can survive when the public is hitting one side so hard..........To understand why the books might not be as bad off as you may think.... you should understand PHP(practical Hold Percentages) and THP (Theorectical).

PHP is the amount of money actually booked and paid
THP is the amount of money the book expects to hold over the long haul

PHP formula
PHP=(Amount booked-Amount paid out) / Amount booked= Gross profit / Amount booked
ex............
(500k (was booked)-475k (was paid out)) or 25k/500K=.05 or a 5% Hold

Pretty cut and dry right? Well that's where the cut and dry stuff ends. Lets look at THP

THP is a ratio of the amount a book expects to hold to the amount booked over the long run.
This theory is based on Ideal conditions, payoff odds and event Probabilities. This somewhat changes the formula from PHP. The new formula would look like this.......

THP= (True payoff-Actual Payoff) / True Payoff
Ok your looking at the screen now going ......"yeah great beer... wtf does that mean to me?"
Well lets start with the basic str8 wager....payoff is 10/11 and lets also assume that team A has and equal chance of winning as team B or it's a 50/50 chance. Lets look what happens to our formula.........
[(1 side+1 side) - (1side + 10/11)] / (1 side+1 side)= (2-1.9091) / 2= .04545 or 4.55% hold.

Ok so in the example this a perfect world example and the world not being perfect we'll bring it a little further........
Lets say this is a football game and the general public has a view that team A is alot more likely to win than team B so if you are the book your gonna want to put a number on this game. Lets say we start with making Team A a 6 point favorite over team B..........Well now we can expect a certain percentage of people to come back to the dog side while at the same time somewhat reducing the amount of money the favorite players are willing to risk. Of course the books don't want to lose action but they want to limit thier liability. How the books acomplish this is to move the Vig charges arround according the the amount of money bet on each side but also they set a limit on a game .......lets say for every 10K they have bet on one side that is not balanced by wagers on the other side they will move the the point spread up by a half point. So back to our example........the favorite bettors didn't mind the six and started comming in strong with limit bets moveing the spread to 7.....being this is football this is a key number and starts to drive money back in on the dog late. This is how the books accomplish getting the maximum amount of money on both sides and limitting thier liability by balanceing the action as much as possible.

I understand that this is baseball season and all but I will spend time writing up a bit more on baseball THP in a seprate thread as it's kind of important to know this information before moving on to baseball which gets a bit more complicated. But now that we've gotten this far and have a bsic understanding of what the book is trying to accomplish lets look at the reasons why they might not need ballanced public percentages to still win.

The number one reason the house does not need to balance all thier action is BANKROLL.....
Some people think that the house has an unlimited bankroll well thats not true but it might just as well be........Lets say a book has a 10 million dollar bankroll........that means they can book up to $100,000 on one game and still only be risking 1% of thier overall available bankroll.........not a huge risk but lets add to that fact. Lets say on average the books has about 12 games a night it takes action on and about 6 of those games the money gets balanced but on the other 6 the money is unbalanced........Still the book is sitting pretty because they now only have to win 3 of the six unbalanced games but still have six balanced games of income to cover any losses they may sustain. Now comes the real beauty of being the book.......lets say they win the three games the majority of the time thier Practical Hold percentages on those games are substatially higher than the THP to begin with.

There is one other great reason the books do not need to balance thier games it's called SHADE....
There is a certain percentage of games that the book or oddsmakers will be able to accurately predict the outcome of a game will be drasticlly different than what the betting public expects. Generally in these games they will take the lopsided action and keep a cheap price on a game so that they can drive as much money as they can to one side. Now I've heard alot of different opinions on shade and how much it actually occurs but I remember a percentage I heard on it happening and if I remeber correctly it was arround 5-7% of all sports year round.

I hope this gives anyone intrested a better understanding of why games can be so lopsided and still have the public winning them.......the oddsmakers do what they can and in general are pretty sharp but if you asked the guys who make the lines they would probably tell you how smart the general public are and how much work it takes to stay ahead of them.

[Beermantm]

I'll get back to this post tomorrow night. For right now please leave this post without reply's right now as I will probably fill up a page or two of information. It's kind of scattered information right now but I will do what I can to pull it all together for you.

Thanks.
Phil

[benlj21]

This looks like a lot of explanation of the Kelly formula. I read Fortune's Formula by William Poundstone, which goes in depth into the history, theory, and applications of the Kelly formula. Good stuff. Now the obvious question...."but beer, how do you expect to apply that to poker?" [img]/images/graemlins/smile.gif[/img]

[Beermantm]

Ok So I'm going to start by assuming you understand that the information in the first couple of posts is correct information. I'm going to do some of this from the top of my head. Lets look at a bankroll management system for sports layed out and explained.

Lets start with a 5000k dollar bankroll and make each bet 2% of that bankroll. 2% of 5k is 100 a bet a is the maximun bet our bankroll will allow to compensate for the deviation we will naturally experience.

(will call 52.7% breakeven in sports)

Now if we play 10 bets you basically force your self to hit 60% of your plays to make a profit. 5-5-0(omit pushes for now) is a loss.

Now if we play 100 bets your ability to make a profit increases. You allow your self to hit any percentage above 53%........54, 55, 56, 57, 58, 59, 60. This shrinks your deviation of the expected 57.5% chance on each play.

Now if you increase your bets to 1000k bets any and all bets over 527 are now profit and you gained more ability again to make more money. you now can hit..528,529,530,531,532 ext. ext. Now with an 57.5% expectatation on each play you primaliry wiped out your deviation into the negative.

More to come every time I get into writing this thread I end up doing something.lol

[pzhon]

A lot has already been written in these forums on bankroll management, the Kelly Criterion, risk of ruin, etc. Instead of trying to reinvent the wheel (you haven't gotten there yet, it seems), why not collect references to the best past discussions?

[Beermantm]

[ QUOTE ]
A lot has already been written in these forums on bankroll management, the Kelly Criterion, risk of ruin, etc. Instead of trying to reinvent the wheel (you haven't gotten there yet, it seems), why not collect references to the best past discussions?

[/ QUOTE ]

Not the kelly Criterion. Just explaining how I got about to making the betting system which unfortunately I've been to busy to write about yet. I'll make a point soon.

[NicGreek]

I hope you find time soon to write more about it.