Odd's Line Math

[MitchS]

Hi all,

I am looking for some help in obtaining a mathematical formula in creating an odds line. A 100% line. I used to know the forumla years ago. I just can't seem to remember. The use of easy input odds line programs have made me lazy. If someone has a mathematical formula they would like to share for the use in creating an odd's line from final fig's, i would be much indebted.

Thanks ahead of time,

Mitch

[keilan]

Mitch -- have you viewed the odds line templates for three and four horse contenders from "Steve Fierro" book titled The Four Quarters of Horse Investing?

Unless you really want to make a line for every horse in the race I think you will find these templates more than satisfactory.

[MitchS]

Thanks Keilan, but what i am really looking for is something like Gordan Pines Figline. The mathematical Formula that i can input into a database so i do not have to manually input any fig's.

Mitch

[keilan]

Mitch --try doing a search as this topic has been talked about many times before. Good Luck

[Tom]

Try this.

http://turfpedia.com/process/make.html

[Handle]

Mitch,

OK, I think this will work. Feedback appreciated!


You need a formula that will first normalize your weighted "value rating" into a percentage- a number from 0-100, for each horse.

To do this we total up all of the value ratings for each horse. Then we divide each horse's value rating by the total. We multiply this number by 100 to make it into a percentage.

Now we need to convert this percentage into an odds line. We are assuming that this percentage is the percentage of the races that this horse will win based on its value rating.

So we create an algebraic formula where we want to solve for odds. It looks like this (we'll work with 2 dollar bets, though 1 dollar bets could be used to make it cleaner):

Odds = (TotalBet - (winPerc * 2)) / (2 * win%)

TotalBet is important. To Break EVEN you want to set it based on 100 wagers. If you want a cushion in your value line, you make Total Bet larger.

An example:

Odds = (200 - (25 * 2) ) / (2 * 25)

That is, 100 wagers at 2$ per = 200.
25% wins * 2$ returned per win bet (you get your wager back when you win) = 50

Divide this by 2$ wagered times the win percentage (25 in this case) = 50
odds = 150 / 50
Odds = 3/1

And, to show it works:
you start with 2$.
2 bet win = 8$ returned at 3/1. You started with 2$ of your money, so the winnings is now 6$
2 bet loss = 4 total winnings
2 bet loss = 2 total winnings
2 bet loss = 0 total winnings - you've broken even.

Note here that we win 1 out of 4 times at (3/1) to break even. This is a 25% hit rate, which is the win% used in the equation above.

So, in EquiSim's formula view you'd have a column that normalizes your value ratings for each horse and makes it into a percentage. Assuming that the value ratings are in one column, this is simply:

#COLVAL(n) / #COLADD(n) where n is the number of the column that holds the value rating.

Now, the expression that creates (break even) odds is:

(200 - (#COLVAL(x) * 2) ) / (2 * #COLVAL(x) )

where "x" is the number of the column that holds the normalized (and made into a percentage) value rating.

Again, this is the break even odds. Adjust the "total bet" up from 200 to add "cushion" to your value line.


-Nathan

[MitchS]

Thanks Nathan,

Looks great, but unfortunitly the formula returns a line that is to close together from the top ranked to the bottom ranked horse. More weight need to be applied to the top 4 or 5 horses, the contenders. Not quite sure how to do his in a formula, code.
But were having fun and i guess that is all the matters.

Since i am here i would like to give a plug for ESV5 and the formula view where you can create anything you want in a system or method. With all of features of V4, added to V5 makes it in my opinion one of the top handicapping programs around. Let me tell you when it comes to V5 and the Formula View, I was a little hesitant at first (my math skills are a little short) but i was very surprised at how easy you made it. IF I CAN USE THE FORMULA VIEW ANYONE CAN...


Thanks Nathan for a great product.

Mitch

[headhawg]

Mitch,

See if you can get your hands on a copy of Dick Mitchell's book Winning Thoroughbred Strategies. He combines a speed and class method to obtain a rating, and then shows how to convert that to an odds rating. The book is a good read even if you don't use his method to the letter.

I also think that CJ created a spreadsheet to calculate a fair odds line off of a rating. I think it was called linemaker.xls. It might be on his site www.pacefigures.com under Free Tools.

HH

[hdcper]

Mitch,

Headhawg recommendation is an excellent one! Mitchell's method of calculating an odds line works well overall and I used it many years ago.

I would try to summarize it, but am moving in a few weeks and have packed my handicapping books away.

Check it out, might be just what you are looking for.

Bill

[JackS]

ML Odds total (all horses added) will be over 100%. The total ML can be viewed as actual odds versus odds offered minus track take. Generally the total will be between 120-130%. That leaves 20-30% to subtract from the ML odds offered. This is the easy way but, computer programs may be a little more accurate because of high ML odds usually don't exceed 20-1. To work quickly with a pencil or pen, decrease all odds by 20%. This number should be accurate enough since opinions of true odds vary widely. Your choice.

[BillW]

MitchS,

Here's another resource:

http://www.handicapping.com/library/carroll/

The righthand column has a few articles by Charles Carroll on making an oddsline.

Bill

[plainolebill]

After Hdcpr posted I dug out the book. Here's how Mitchell does it:

First he indexes his raw number to fall within the range of 60-100 pts.

Indexed Value = 60 +(40 ((raw score - lowest raw score)/range))

Then converts it to an ability rating. That formula is:

.0245 x (power rating) -1.46
(60pts comes out to be .01, 100pts = .99)

Finally he totals the ability ratings and divides each horse's ability rating by the total. (he actually uses a percentage of the total based on how many contenders he has, and assigns the balance to non contenders)

You can put that into Equsim 5's Formula View and it will give you the probablity percentages and if you like can convert that into a fractional odds line.

Hope I've got this right - It's late and I'm old.

[MitchS]

A big thank you from everyone who has posted on this thread, especially Plainolebill for digging up the formula. I will feed this into ESV5's formula view and see how this line looks.

Thanks again,
Mitch

[Equineer]

MitchS,

The formula for a break-even odds is, and always will be, (1/probability)-1.

As far as I can tell, all of the methods suggested to you skip by the major question... why compute odds unless you have tested the accuracy of your underlying probabilities?

Any odds formula/calculation based on "fuzzy math" is an acknowledgement that you are working with handicapped results that fail to show much correlation to probabilities.

[cj]

Originally posted by Equineer
MitchS,

The formula for a break-even odds is, and always will be, (1/probability)-1.

As far as I can tell, all of the methods suggested to you skip by the major question... why compute odds unless you have tested the accuracy of your underlying probabilities?

Any odds formula/calculation based on "fuzzy math" is an acknowledgement that you are working with handicapped results that fail to show much correlation to probabilities.

I've been through this before with some other guys, but I'll try again anyway.

You could spend a lifetime trying to "prove" that your odds are completely accurate.

Here is what I think. I make a betting line for every race. I follow this betting line when making betting decisions. I have won money for almost 5 years straight now. Therefore, my odds line is good enough. Do I really care if the horses I make 4-1 win 20% of the time? Or if the horses I make 9-1 win 10% of the time? Of course not. Would it help to know this information? Maybe it would, maybe it wouldn't, but here is what I do know.

Horses I make the favorite on my line that don't go off the post time favorite make a substantial profit.

Horses I make prohibitive favorites that also go off as race favorites are best avoided. They win a high percentage of the time, they show a loss if bet flatly, and betting others overlays in the race shows a very big loss.

If I have a race with more than 4 contenders (they are given a morning line by my system), DON'T BET!

There are other rules I use, but you probably get the point. You don't have to scientifically prove your odds line is perfect. Profit is all the proof you need.