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Handicapping and Computers
Handicapping can be achieved successfully with sophisticated mathematical formulas performed by computer programs. These mathematical formulas do not generally have access to unlimited data sets. So there is an amount of error. To minimize the data you should use the largest data sets available. To determine your exact error amount simply divide 1 by the total data set items.
As you determine trends and angles and accrue enough data
to create a performance profile, the correlation between
these actual results and the expected results can be found
using the Chi Square Test to find out what is pure luck
and randomness. This formula is X^2 = SUM( (O-E)^2 / E ).
For the Chi Square test to be relevant you must review its
error rate and ensure you have significant amount of data
for accurate results. You should only follow trends that
have low error rates and acceptable Chi square test results.
You can test these against the current NFL
Lines on a weekly basis and find the ones that differentiate
the most.
Another useful item is to review the sterling ratio formula. This pertains to the risks and rewards that are present in wagering. The concept is that rewards and risk will increase together and decrease together. The first part of the sterling ratio is the Maximum Drawdown (MD) or the largest loss of capital. To identify this identify the biggest drop from high point to low point for your revenues. This is the amount of money you will need to be able to continue operations regardless of the circumstances. Then divide your total profits by this maximum drawdown. Try to go after the highest Sterling Ratio you can find. This will increase your profits and decrease the maximum drawdown.
I hope this was helpful and encourage you to try my handicapping software which has all of these features and more already built in for your convenience.
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