That's a helluva an article....but it went right over my head. I didn't even understand the "opening" vs. "closing" comparison. Perhaps I need to buy one of his books.
No I think you are confusing zero expected value with zero excess profit due to price efficiency theory but in reality that's not the case. There are excess profit to be made thus the expected value of each trade is definitely not zero. And to be profitable, it's not just the win rate that matters. It's also how much you win vs. how much you lose on each trade. If your win rate is 50/50, but each time you win, you can win twice as much as you lose, you still come out ahead.
A market is open before an event, Odds are then opened for the bettors. Opening quotations aren’t really efficient. By efficient I mean … forward probabilities = backward probabilities Before the event takes place or end, Betting is shut down. The close is the last quote. We can see the closing quotations to be much more reliable in terms of predicting the outcome. The difference between the open and the close, Are the bettors pricing more and more information. While the opening quotes are based solely on the brokerage’s own heuristics. That’s why professionals are trying to beat the close. They look for value bets. If they buy something with an implied probability of 1/2 but it actually closes with an implied probability of 2/3 then they’ve earned 16% on their bet. That’s true even if they lose. It’s a probability game. As long as you beat the close … Whatever the outcome. You’re doing fine. That’s the same in financial market. You’ve got an open and a close. If you can buy lower than the close it’s fine. If you can sell higher than the close it’s fine.
it was a serious response done with (what I thought) was a succinct colorful analogy. The kind that would have made mark Twain proud.
Yes I am definitely confused about that topic. What the difference between zero expected value and zero excess profit?
stats don't lie. u saw my 2 bets from last night? one was a winner and one was a loser. am i green or flat from those 2 bets?