Pruebas de hipótesis para el contraste de medias

This excellent article comes from Paul who runs ‘Lay The Psychic’.

Have you noticed that when you purchase a new system or start to use, a new system which you have devised, the first thing it does is to start to lose money? Have you ever wondered why?

I decided to apply some of my few remaining brain cells to this problem in order to see what I came up with.

I went right back to basics and asked myself some questions.

If we invented a new system, when would we decide to implement it? If we decide to purchase a system, when would we decide to buy it? During a bad patch?

No!

We implement or purchase a system during one of its good patches. Why?

Well, who in their right mind would implement or purchase a system during a bad patch? This wouldn’t make sense. Or would it?

Again, let’s go right back to basics.

There is no such thing as the perfect system. All systems therefore have a strike rate of less than 100%.

If you have past records for the system, you can calculate its strike rate. If you can calculate its strike rate, you can calculate the odds of encountering a losing run of a given number of bets.

Secret Betting Club

The good, the bad and the ugly of the tipster world…revealed!!!

53

All original content is copyright Secret Betting Club 2008 and may not be reproduced without permission. Suppose that the system’s long-term past strike rate is 70%.

There is a 75% chance that the system will encounter 4 losing bets in a row. There is a 50% chance that the system will encounter 6 losing bets in a row. There is a 25% chance that the system will encounter 7 losing bets in a row. There is less than a 1% chance that the system will encounter 9 losing bets in a row.

This is exactly why systems go through a bad patch. If something can happen, eventually, it will. Therefore, even though there is < 1% chance of encountering 9 losing bets in a row, given enough time, it will happen. OK. That’s losing runs explained.

Now let’s go back to our initial questions regarding the point at which we should implement our new system:

Generally, we implement systems during winning runs. Why? Because we don’t think that it’s a sensible idea to implement a system during a losing run. Yet, we know that the system is going to lose, eventually.

At this point, I am going to upset one or two statisticians and

mathematicians. For those of you who are of this ilk, please give me the benefit of the doubt for a few moments.

Let me ask you this: When is a losing run most likely to occur? A. Immediately after a long losing run

B. Immediately after a long winning run

The statisticians and mathematicians amongst you will probably say both or neither.

Why?

Because, if horse racing is a random event, then past results have no bearing whatsoever on future results. The fact that you just lost the last bet has no affect on the result of your next bet.

However, consider this: Horse racing isn’t random. Some horses are much better than others. As such, they win far more often. If horse racing was a random event, then this wouldn’t happen. True, if a race consists of horses that are of equal ability, then, to some extent, the race does have some features which could be described as random. However, the vast majority of races are not like this and certain horses do have more chance of winning than do others.

Secret Betting Club

The good, the bad and the ugly of the tipster world…revealed!!!

54

All original content is copyright Secret Betting Club 2008 and may not be reproduced without permission. As such, provided that a system has exhibited a given strike rate over a sufficiently long period of time, it is reasonable to assume that it will maintain its past strike rate in the future, within a reasonable margin of error.

Now, armed with these assumptions, let us ask the question again. When is a losing run most likely to occur?

A. After a long losing run B. After a long winning run

In my opinion, the answer is B, and here’s my reasoning:

Let us consider a system which, over the past few years, has had a strike rate of 80%. The strike rate over the past month has climbed steadily and now stands at 90%.

If this short-term trend continues, the strike rate would begin to approach 100%. However, given the past performance of the system, this is unlikely. What is more likely to happen is that the future short-term strike rate of the system will fall well below 80% in order that the overall strike rate is

maintained at 80%. In other words, in the immediate future, it is likely that we will have more losing bets than normal. The longer the winning trend continues, the more severe the losing run is likely to be. We may not be in a position to determine precisely when the winning run will end, but the longer the good luck holds, the more likely it becomes that the good luck will run out in the near future.

Just when a winning run begins to build is the time when most new systems are either purchased or implemented. This is precisely the point when a system is at its most vulnerable to a run of bad luck. This explains why, when someone purchases a new system or implements one of their own, they quickly become disillusioned with it since there is a tendency for them to go straight into a losing period. I made this very mistake when I began proofing one of my systems with Racing Index. I waited until it was well and truly into a winning run before I made my first submission to Racing Index. Guess what? On the very first day, I had 3 losing bets! What a start, and, what a great advert for a system new to market!

Well, that explains why it is, in my opinion, newly implemented systems start off by losing.

Secret Betting Club

The good, the bad and the ugly of the tipster world…revealed!!!

55

All original content is copyright Secret Betting Club 2008 and may not be reproduced without permission.

3. Professional Mindset

Professional mindset:

Professional gamblers aren’t lucky, they create their own luck. They go through losing runs just like anyone else, but what sets them apart is how they think. In each issue of our newsletter we include at least one article regarding Betting Mindset issues.

These series of articles go through the most important steps in making the transition from punter to winner.

Secret Betting Club

The good, the bad and the ugly of the tipster world…revealed!!!

56

All original content is copyright Secret Betting Club 2008 and may not be reproduced without permission.