Betting Experts Answer: At What Point Has Variance Played Out in Betting? | Part 2

Welcome to the 9th question in our series: “Betting Experts Answer The Industries Biggest Questions.”

This week we are answering a question that is regularly asked by Trademate Sports users and value bettors around the world, as we asked nine betting experts:

Q9: Assuming you have an edge, at what point can you start accurately evaluating your results and say that variance has played out? Is there an amount of turnover or number of bets?

Check out Part 1 of our answers here, where we get the opinions of pro sports bettor - Spanky, author - True Poker Joe, Pete Ling from Smart Betting Club, Nenko from the Church of Betting and Smart Sports Trader - Ryan Bruno.


This is essentially a statistics question and there is plenty of information available publicly about how best to determine statistical significance on betting records and whether they are the product of luck or not. The number of data points (bets) is key rather than turnover and the odds range will determine how many are needed to evaluate a record adequately.

Inside betting

There are some areas worth considering aside from the mathematical aspect. You are unlikely to reach a statistically significant proof of skill for a given betting record before the market dynamics change. The reality is that just when your sample size is getting sufficiently large enough to evaluate is also the same point where the market will have decided how much of your input to it is worth absorbing. On really large betting records, there can actually be periods within it where you have an edge and then don’t and it continues to alternate as the market continues to over or under shoot inclusion of the factor that is responsible for your edge. A good example of this is in Horse Racing where there has been a back and forth battle over the merits of handicapping via weight versus speed ratings. There is most probably an optimum balance between the two for any given race or horse at a given time and the market is constantly adapting to find the best fit. There are those with very large records who religiously stick to one method or the other and have experienced prolonged periods of feast or famine depending on how under or overvalued their methodology is by the market. Only the best proponents of their respective methods survive this process in the long term.

Ultimately you will leak some money when you have an edge by potentially under betting it when you are not sure of it and then continue to bet it after it has gone but before you realise it has. Sadly the stakes are normally larger on the second leak than they were initially meaning some successful edges net the owner very little at all in the long run. Reacting quickly therefore is very much to your advantage but also high risk, giving up too soon can be as damaging to future lost earnings as following a strategy off a cliff. The market is so successful against most bettors because it incorporates information slowly and in a measured fashion meaning everything is fully incorporated to the exact degree it should be over time but with a lag. You need to exploit that lag. If the market were a model with bets as its inputs it would be perfectly Bayesian but with only a very mediocre prior to begin with determined by the size of the bets and the time remaining before settlement. Consistently successful bets of significant size ultimately will be evaluated to have a greater influence on the markets final settlement and will over time be incorporated with the correct proportionality on average.

So where does this leave us? Well you must understand where your edge comes from, why it should matter and what indicates that the market considers your bets significant. To do that your bets need to be large enough to warrant action by the market and you must observe for resistance. Closing line value is all well and good but ultimately more information that neither you nor the market had can appear between your bet placement and the closing line. So often all you are measuring is information asymmetry between your bet placement time and the closing line. What you really want to know is whether at the instance of bet placement you were better informed than the market and did it respect your bet. Of course opening lines do not beat closing lines for predictive accuracy so you can bet an early price see it move and still not beat the closing line. However whenever you bet you should see the market move sooner rather than later, whether due to the weight of your money or other successful people doing the same thing with the same edge but in larger size. If it doesn’t rebound quickly you are on the right track.

So don’t wait for large samples that may never come. Observe your bets closely, see if the market blinks and if it does with reasonably regularity don’t wait for the maths to catch up. If the market shows fear even for a moment you must hit as hard and as fast as you possibly can because ultimately it will come off the ropes and it will knock you out in the end.

Check out Matthew’s podcast ‘Inside Betting’ here.


As a bettor it is important to understand variance. It’s a measure of how far a set of numbers are spread out from their average. It becomes highly relevant to sports bettors when you consider hot and cold streaks, and understanding it is a key element of responsible bankroll management.

To put it simply; even a winning bettor gambling with a 5% edge on average can go on long losing streaks, probably way longer than you ever thought possible. Of course, the opposite is true as well, with uneducated punters appearing like sharps before reality eventually kicks in.

Even if you have a decent edge, and numbers on your side, good luck and bad luck still prominently exist. At the end of the day, the only goal is to win more money than you lose, but don’t judge yourself (or anyone else) after just 5, 10, or 20 selections. Wait until you have *at least* a few hundred bets – preferable four-figures worth - before you start making sweeping assessments on the system or skill in place. Always obey the law of large numbers.

Follow @MarkOHaire on Twitter here.


How long is a piece of string? So many variables, odds being the most important. The short answer is thousands of wagers for typical odds (excluding hot favourites). If you can't wait that long, then beat the closing line and you'd get your answer much faster, assuming your market is efficient at closing. I've spent the last 10 years writing about the difference between luck (variance) and skill and it's impossible to condense everything into a short paragraph. If you want more, read my books or Pinnacle’s resources.

Follow @12Xpert on Twitter & check out the 12Xpert website here.


It’s very dangerous to view an edge as a closed and fixed parameter, remember that operator algos are constantly updating and funnily enough they don’t publish release notes to tell you what has changed. Edges can be fleeting and often hard to measure. A niche edge is likely to produce relatively few actual betting opportunities, which has implications for variance. As such, it is vital to control your bankroll, ensuring a bad run of variance doesn’t wipe out your balance before your genuine edge starts showing positive returns. I’d suggest that only if you are able to measure your performance hundreds, if not thousands, of times then you’d be able to confidently evaluate your edge. However, the nature of review or evaluation means it is performed post event; therefore, it is really only a tool for judging past wagers and should be used cautiously as an indicator as to future results.

In some markets it can be almost impossible to accurately measure an edge. Prop markets are one such type, the nature of the market ensures that any edge is likely to be available a small amount of times a year. Consider goalscorers, it may be that you have found a genuinely huge edge if a firm has priced a player up in the wrong position, but the edge you have uncovered may never actually pay dividends before the bookmaker realises its assessment of a player is wrong and makes an adjustment, even if that adjustment is not made for a number of matches. Positive and negative variance is more volatile as probabilities shrink, this is especially true in prop markets, and so reliably assessing an edge can be very tricky. Measuring your expected value is also fraught with difficulty in these more exotic and less efficient markets as there aren’t necessarily any benchmarks to determine what the true price should have really been.

Follow @JeevesOdds on Twitter.

Check out Part 1 of our answers here, where we get the opinions of pro sports bettor - Spanky, author - True Poker Joe, Pete Ling from Smart Betting Club, Nenko from the Church of Betting and Smart Sports Trader - Ryan Bruno.

Love getting the opinions from experts in the betting industry? Then subscribe to the Trademate Sports Podcast, where we interview the most important people in the sports betting industry.

Here are the other questions we have got our industry experts to answer so far:

  • Q1: Top 3 tips for betting beginners? Part 1 & Part 2.
  • Q2: How do you define “finding value” in betting markets? Part 1 & Part 2.
  • Q3: How do you determine whether your betting results are based on luck or skill? Part 1, Part 2 & Part 3.
  • Q4: Kelly criterion or flat staking: Which stake sizing strategy do you consider to be the best and why? Part 1, Part 2 & Part 3.
  • Q5: What is the best method to use to make money from sports betting? Part 1 & Part 2.
  • Q6: How difficult is it to beat the sports betting markets? How efficient are the odds? Part 1, Part 2 & Part 3.
  • Q7: How to manage risk when betting? Part 1 & Part 2.
  • Q8: Is there a best sport to bet on? If so, what is it? Part 1, Part 2 & Part 3.
  • Q10: What is the one thing you would like to see change in the gambling industry? Part 1 & Part 2.
  • Q11: Do you think emotions play a part in people's sports betting results? If so, how should they overcome this? Part 1 & Part 2.
  • Q12: What are the top 3 mistakes people make when betting? Part 1, Part 2 & Part 3.

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