Understanding Variance

But it’s when you seem to back a succession of losers, and you can’t seem to get a lucky break that it’s easy to start questioning your ability. Since I was a fairly small child, I have always been deep into sports and athletics. This website’s mission is to share any and all proficient research I encounter on the topic as well as to offer some handicapping tips and tools. So, 70% of you will have been very happy with your 250 Positive EV bets, but there is also an unfortunate 25% of you that will have lost money. That is how variance works, and in the 25% case, a horrible stretch of bad variance.

Understanding Variance in Sports Betting: Breaking Down Expected Value & How to Control Variance

Understanding variance is crucial for bettors to make informed decisions, manage risks, and optimize their betting strategies. Sports betting isn’t like playing a game of blackjack, where probabilities are more defined and can be controlled. In sports betting, every game is a dynamic event, influenced by countless variables—player performance, weather conditions, referee decisions, and unexpected events on the day of the match. These elements create variance, which can lead to both wins and losses that don’t necessarily reflect your long-term betting strategy. Standard deviation and variance in betting give punters a methodical, statistical way to predict outcomes of sports events.

• Making 1,000 1 point bets with a 10% edge at odds of 5.0, you get a standard deviation of about 6.3%.
• Correctly calculated lower odds mean a higher statistical probability of that outcome winning.
• The cold hard truth is that it’s most often an illusion – due to positive variance.
• The odds set by bookmakers play a crucial role in determining variance in sports betting.
• To reduce the effect of variance in sports betting, you need to have an exact bankroll size allocated for betting purposes only.

Even with a significant edge, losing streaks are mathematically inevitable. Consider a top-tier sports bettor with a remarkable 57% win rate on point spread bets (well above the ~52-53% breakeven point when paying standard -110 vig). To become a truly winning bettor over the long term, it is imperative to understand and accept the concept of variance in sports betting. We can connect with each other through shared experiences, knowing that variance is an inevitable part of sports betting.

How is Variance Related to Standard Deviation?

Finding value odds faster than other bettors before the line moves or disappears is also a great way to secure an advantage. Indeed, a «novice» player will instinctively want to «recover» by increasing his stakes after each lost bet, hoping that the wheel will eventually turn and thus make up for his losses. Your goal isn’t to win every trade—it’s to make smart trades repeatedly over time.

How does Your Strategy Perform if You Stick to Level Stakes?

Just by looking at these numbers it becomes quite clear that cold-streaks, and thus, hot-streaks happen very frequently. Even https://parimatchindiaofficial.com/ long stretches are very likely to occur, and this is just with a relatively small sample size, all things considered. Finding value comes down to having a good understanding of the sports, leagues and games you are betting on. To read more about this topic I recommend you read our article “Value Betting Explained”.