Backtesting pinnacle’s odds

defined by football betting rules

www.betsuitepro.com

Backtesting is a key component of betting strategy development. It is the

process accomplished by reconstructing, with historical data that have
occurred in the past using rules defined by a given strategy. In theory, if a
system worked well in the past, it will continue to do so in the future. On the
other hand, any system performed poorly in the past, it is likely to do so in
future.

Backtesting model

A good betting system should start with an idea. Before you start creating your
betting system, begin by asking a simple question – something like, “Are big teams
more likely to bounce back after a defeat?” or “Is May the month with the most
goals?” After you have a question in hand, you can start your research over the
data to find the answer. As long as an idea can be quantified it can be backtested.

Backtesting can be followed on wide range input variables, as it shown in table 1

from commercial platform betsuite pro (www.betsuitepro.com).

Table 1: Variable inputs

It is essential to enter a range for the specific input and letting the computer to “do
the math” to figure out what input would have performed the best. Backtesting can
provide valuable statistical feedback about a given system. Some universal
backtesting betting outputs include:

-Net Profit or Loss – Final profit or loss in terms of money

-Yield - Net percentage gain or loss
-Success – percentage of succeeded games
-Average odds – bookmaker’s average odds
-Cumulative yield graph – a graph that includes point values, where each value
is the sum of all values below it

Typical backtesting model will have a cumulative yield graph (figure 1), showing
the betting process of yield that has occurred in the past, using inputs defined by
a given system.

Figure 1: Yield cumulative graph from October 2015 to October 2017

Backtesting system example (bet on Away wins)

As an example, many bettors prefer to bet on the Away win, due to higher
bookmaker’s odds. Let’s assume, we will try to find a positive angle in this market.
By using the platform BetsuitePro, we select all Winter Leagues available with
variables inputs included as:

-Time period seasons 15/16, 16/17 & 17/18 (current)

-Pinnacle’s Closing Odds Range from 1.90 to 2.40 (stake: 1unit / bet)
-Back away teams that have not lost their last two matches, by setting streak
filter →Away Team → [Win or Draw Streak] → 2
-Define the home teams to come off a loss, by setting Streaks filter: → Home
Team→[Loss Streak] → 1.

Backtesting results for Away wins for every league are shown on figure 2. A
money making system preferred to be optimized on leagues that show a yield of
12% or more.

Figure 2: Yield and record results per league

Finally, by selecting nine leagues that shown profit, we get a positive system yield
31.07%. This yield assumed to be the price, up to the end day of the time period.

Figure 3: Backtesting platform / cumulative graph

Analyzing cumulative graph shown in figure 3, starting a betting system from the
start of season 15/16, there was a stable curve with positive values during the
whole backtesting period. That probably means once a betting system has been
developed, it is ready to be applied for betting in the future.

Pinnacle odds efficiency

All betting systems are based on the odds prices. Although at the above example
pinnacle’s away closing odds shown a positive profit at range 1.90 to 2.40, if we
test at different ranges eg. 1.40 to 1.90 (figure 4), where the away win was more
possible, they resulted to negative profit. The first range of odds is a strong form
of market efficiency, while the second is a weak one. Those procedure can be
useful to test the market efficiency of bookmaker’s odds and present profitable
betting strategies.

Figure 4: Odds range bar from 1.40 to 1.90 (pinnacle Closing odds)

As a conclusion, backtesting on match results can be a key component to examine

the impact of specific factors on betting strategies. On the other hand, backtesting,
like any other modeling is limited by potential overfitting. This means that it is often
possible to find a strategy that would have worked well in the past, but will not
work well in the future, due to modifications of betting rules at present conditions.
If a system worked well in the past, the best way of testing this nowadays is by
testing its actual performance.

www.betsuitepro.com