Betting odds explained – Introduction to betting probability
The betting odds explained article series focus on teaching you how to bet through precise descriptive information in relation to the universe of betting odds. This particular series focus on betting odds probability.
We have mentioned basic understanding of probability as one of the keys to successful sports betting in many of our previous articles. Howtobet.net now aims to show you how to read odds and how to understand odds. We also will show you how to convert odds into probability and vice versa. On top of that we will show you how to compare odds on offer to your own assessment of a given betting object, as well as converting between different ways of stating odds.
This is absolutely essential information that you simply got to get right. Our betting odds explained series will help you get it cemented. This betting odds explained article will focus on defining probability and explain different types of probability.
What is probability?
In general you can define probability as the likelihood that an event in the future will happen. Probability can only take on a value between 0 and 1 (0%-100%). The sum of probabilities given a set of events that are mutually exclusive and collectively exhaustive must equal 1.
By mutually exclusive we mean that only one of several possible outcomes of an event can occur at the same time. Collectively exhaustive simply means that at least one outcome of several possible outcomes in a set of events must occur. If we did an experiment, and zero outcomes happened we could not brand this as collectively exhaustive, at least one outcome must happen.
Types of probability
In general we will focus on three basic types of probability. They are, empirical probability, subjective probability and a priori probability.
Empirical probability
Empirical probability is deriving future probability based on relative frequencies of the past. One simply assumes that since X has happened Y times in the past it will continue to do so in the future. The formula for empirical probability is very simple. It is the number of times an event or outcome happened in the past divided by the total number of observations.
Let's just assume you have noticed that Manchester United won 18 out of a total 19 home games in the English Premier league 2010-2011 season. Please note that in the world of statistics one season worth of data is no sample size to draw reliable conclusions from, this is only an example. Using the formula above we can deduce that United will win 18/19 games at home = 0,947 = 94,7% of their home games when playing in the Premier League. This is clearly not going to be the case every season, so use this formula when you have reliable and stable background info, or at the very least a large and representative data set.
Subjective probability
When no better probability assessment option is available or if you happen to be super human then subjective probability might work. Subjective probability simply means making up your own estimate based on your impression of the relative likelihood connected to the event you are assessing.
Subjective probability is often the reason why leisure bettors tread wrong when picking bets. Instead of using proper bet analysis they quickly use a subjective probability assessment giving a way too high win probability for their selection and sure of themselves, place it on their coupon.
A priori probability
A priori probability refers to a means of assigning a probability to an event or outcome based on reason and logic. The traditional example being grinded to pieces is the fair coin flipping scenario. Imagine you flip this fair coin. It is 50% probability for heads and 50% probability for tail. We reason that, if the coin is fair, and there are two equally likely outcomes the probability must be 1.00/2 = 50%
An example of this method assigning probability to outcomes and events is when you use proper bet analysis, weighing various betting factors that may influence the odds. For instance in football betting you may assign probabilities depending on form, team news, head to head analysis and so on and so forth.
Building up the a priori probability you may use empiric probability or even subjective probability to support your thinking, but the guideline is reason and logic as per the a priori probability definition.
Coming up
We hope you enjoyed this introduction to probability. The next articles in our betting probability series are found here:
Betting probability - Conditional, Unconditional and Joint probability
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