Sports betting is as much about strategy as it is about understanding the nature of the game. If you've been involved in value betting, you've likely heard of the term "variance." Variance plays a crucial role in your betting journey, and understanding it can help manage expectations and build a resilient mindset.
In simple terms, variance refers to the statistical measure of the spread between numbers in a data set. In sports betting, it refers to the difference between your expected win rate and the actual outcomes of your bets over a short period.
While positive EV bets suggest a profitable long-term strategy, variance means that in the short term, you might experience both winning streaks and losing streaks. It's the nature of probability. Even if a bet has a positive EV, it's not guaranteed to win every time. Instead, over a large number of bets, you would expect to come out on top.
To help understand variance outside of the sports betting realm, let's consider a simple coin toss. Suppose you bet on heads, and the coin is fair, meaning there's a 50% chance of it landing on heads and a 50% chance of tails. If you were to flip the coin 10 times, you wouldn't be surprised if it landed on heads only 3 out of those 10 times (even though the expected outcome is 5). This short-term deviation from the expected result is due to variance.
Now, if you were to flip the coin a million times, the number of heads and tails would be much closer to the expected 50% each, because over a large number of flips, the variance decreases.
Understanding and accepting variance is crucial for bettors because it sets realistic expectations. Here are some key takeaways:
1. Short-Term Results Aren't Always Indicative: Just like our coin flip example, a series of losses in a row doesn't necessarily mean your strategy is flawed. Over time, if your bets have a positive EV, you should see a profit.
2. Bankroll Management is Key: Knowing variance exists means bettors should have strategies to ensure they don't deplete their bankrolls during downswings. Proper bankroll management can weather the inevitable losing streaks. Luckily SharpStakes handles this for you.
3. Stay the Course: A clear understanding of variance helps maintain a clear head. It's easy to second-guess your strategies during a downswing. However, if you've done your research and analysis and believe in your bets' positive EV, staying the course is vital.
In conclusion, variance is a natural part of any probabilistic endeavor, sports betting included. Recognizing it, understanding it, and planning for it can help bettors navigate the world of sports betting with a more informed and balanced perspective. Remember, it's not just about the short game; it's the long game that counts in positive EV sports betting.