The Mistakes Experienced Bettors Make When Analysing Hedging
Experience is a tricky thing. It builds up a valuable internal measuring stick that we call “intuition,” and that helps us decide between the right way to do something and the wrong way. If your experience has helped you achieve your goals in the past, it’s easy to take your intuition for granted and never question it. But, the best way to learn new things (and to constantly improve) is by questioning. For sports bettors, this can mean asking as simple a question as “is it always a mistake to make a -EV play?”
In a recent educational video from Betting Talk, Elihu Feustel warns us about some common mistakes that beginning bettors make, like hedging, chasing, and locking in profits on existing bets. His logic goes that since these bets against your current position are often -EV, they must therefore be bad plays. He does not, however, discuss how to minimise the risk associated with letting your existing bets ride. In order to illustrate his point, he answers several questions from beginning bettors about typical situations in which they’re tempted to bet against their own existing trades. Rather than simply accepting the conventional wisdom that he advises, let’s question it and do the math on a couple of these examples using Theoretical Kelly Optimization (TKO) analysis to see what play actually maximizes your EG or expected growth (which I explained in this previous post). This play will be the one that best conforms to the math behind the well-known Kelly Criterion.
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