When gambling with your own funds, why would you be concerned with ROI, rather than unit ratio &/or record?
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If you have a structured betting system (more money for favorite bets, less for others) and you place your bets based on a percentage of what you have available, then ROI would probably be the only way to measure your performance. I wouldn't put a lot of stock in it though, since such a betting system would be more sensitive to swings.Comment -
You are right Jay most of us can never "do what you do" and be a professional gambler. Why even ask this question?Comment -
I like the new guy!
Batman, did I ever tell you how much I hate people who answer questions with questions?Comment -
Because anytime you put money at risk you should ask yourself two basic questions. When do I get my money back and what’s my return on investment?
You should be gambling for profit and therefore should know what you are getting for your money.
It does good to track all three, I suppose, but when comparing them, what you get per dollar wagered is most meaningful and most useful. Often, bets cost different prices, or different odds, making your win loss record less meaningful or almost useless, as in baseball.
A great deal of successful gambling involves understanding the odds of games involved. It’s a numbers game and understanding the numbers is essential.
For example, risking the same each time, one can lose a 10 to 1 bet 8 times and then finally hit the payout for profit. But his record is dismal.
Profit, translated to return on investment, translated to specifically what you make per dollar wagered, is the winner’s way to track.
This is, of course, if one is interested in gambling for profit.
Last edited by KVB; 07-25-14, 10:10 PM.Comment -
It would also be a more useful measure if all you bet were parlays?Comment -
What do you mean by unit ratio?Comment -
Units won/lostComment -
I choose to look at ROI as a measure of choice because it allows me to optimize betting systems and have greater control over my bankroll.
Let's say, hypothetically, that I built a predictive model for MLB games which over the past 3 seasons has yielded an ROI of 10%, and a total profit of 75 bet units, *IF* I bet the same amount on each game. However, after doing some univariate analysis, I discovered that my model's win rate is not a linear function and that it appears to have a polynomial shape to it. This tells me that if I adjust my bet sizes to fit the polynomial regression line of my win rate, I should be able to yield a higher ROI while still betting on the same games. So, I fit the regression curve, and apply the function and my ROI increases from 10% to 11.6% while still wagering on the same games.
Basically, it means that I can win more money with the same sized bankroll, betting on the same games as someone else who is not optimizing their ROI. And furthermore, that I can do this WITHOUT taking on a higher risk of ruin. Basically, I care about optimizing my ROI because it allows me to make more money faster. Or, I could trade that 'more money faster' in for 'winning the same amount of money' but with a lower risk of ruin instead. It's up to me what I do with the power I've gained through an increase in ROI, but it's a powerful tool if you understand how to use it.
However, ROI shouldn't be the only thing you look at. I can build models that yield an ROI >15% but I'd be leaving a lot of +EV bets on the table and ultimately make less money. The best approach, I believe, is to FIRST find all the +EV bets that meet your minimum criteria for placing a bet, and THEN optimize your ROI from there. If the ONLY measure you're looking at is your ROI, then you're missing the whole point of looking at your ROI to begin with. It's an indicator used for optimization. It doesn't stand on it's own as a way of comparing which of two betting systems is superior to the other. It can, however, measure which of two betting systems, THAT BET ON THE SAME GAMES, is superior to the other.
This information probably isn't as useful to someone who bets the same amount on most games though. If you are placing your wagers in magnitudes like 1 bet-unit, 1.5 bet-units or 2 bet-units, then you are without question NOT optimizing your ROI. There's nothing wrong with that, just understand that it's not optimal. Some people bet more off instinct and are quite successful. But I'm all about optimization since I'm a math/stats guy.Comment -
I keep a monthly/ daily graph hand written on printer paper. It looks like a stock graph only w/o the candlesticks.
A little line up when I win and a line down when I lose. I write down starting bank roll at the beginning of
the month and write down what it is as the end of the month under the graph and tally up my win %.
I keep ledgers of each sport and tally weekly, because I print out my bets. I know at a glance what I need to bet to
make a profit for the week.
I noticed my graphs can be read like the stock market graphs. A double top means I'm going to lose money and
to be careful. A double bottom means it's time to pound 'em. My graph also goes sideways.
I have a nice win %, but a poor ROI. (from lack of chasing)Comment -
I'm confused. As I was first reading your post, I thought to myself (here's an old school bettor who probably has a lot of knowledge/experience - primarily because you have a lot of posts in here and you use graph paper rather than a computer, nothing wrong with that). Then, I came across your statement about a "double bottom" meaning it's "time to pound 'em" and thought, uh-oh... he's a chaser! Then I read your final statement about having a poor ROI "from a lack of chasing"... and now I'm confused. Could you please elaborate on what you mean by a double bottom being "time to pound 'em"?
Feel free to ignore the obvious sexual innuendo's at your disposal...Comment -
I used to dable in commodities. Bought and read a ton of books on the subject. The 1st thing you have to learn
is to read past performance charts. They talk about double bottoms, tops and head and shoulders. Bolinger lines,
moving averages lines and 50 to 200 day lines. My charts read similar to those.
A double top looks like an M and will tell me losses will come. A double bottom looks like a W and it's time to pound.
Yes, it's old school writing it down. I'm not too prolific with the computer.
Try it for few months, you'll see what I'm talking about.
Wow, didn't realize how many posts I had until you pointed it out.
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