To become a profitable bettor in the long term, one has to deal with the variance in the short term. In probability theory and statistics, this is the expectation of the squared deviation of a random variable from its mean. In other words, it measures how far a set of random numbers are spread out from their average. With regard to sports betting, one needs to understand the influence of variance. Over a small sample size of bets, this will have a dominating impact on your results. However, over a large volume of bets, the variance will even out and luck or misfortune is replaced with skill.
Heads or tails
Let’s clarify this with an example. Imagine a coin flip where you can bet on heads or tails. The odds should be 2 on each side, which means 50% probability of hitting one of the sides. However, variance tells us the following. If we flipped a coin 100 times it may land on heads 62 times and tails 38 times, or heads 45 times and tails 55 times. In other words, the chance of hitting just as many heads as tails with such a small sample of coin flips is really small. But, as the number of tosses gets larger, the distribution of heads or tails evens out to about 50%.
How variance affects your betting results
The same principle also applies to sports betting. This means that variance can play a major role in the short term and therefore influence your results. In statistical practice, this means that ‘outliers’ can have a huge impact on your results in the short term, both positive and negative.
It is not always easy to deal with this.
It is one of the most common reasons why beginning sports bettors tend to drop out. For example, one could lose their confidence in their methods due to disappointing results. On the other hand, you can become too eager when you have achieved some good results. Both scenarios will lead to disappointing results in the long term, or no further results at all.
How to control variance?
Therefore, you have to take variance in your stride, but you mustn’t let it slow you down. To deal with it, one should have a carefully thought out bankroll management and a rational and statistical based betting strategy.
After all, if the number of bets gets larger, the variance will even out in the long run. This ensures that the bettors who have a margin (who play bets that contain inherent value, a term often used in our articles) will be the ones making profit. With regard to value in betting, you are at the right place!