The arbitrage algorithm does not perform many calculations, so there isn’t much to say about it. Even so, its real worth wagering counterpart does its job in an unusual way. Let’s consider taking a look at the two-phase process it employs.
Evaluation of Expected Value
Isn’t the goal of placing any stakes to make money? So, in order to place a profitable wager, the return on a bet must be higher than the amount risked on it. This is where expected value assessments come into play.
The program is intended to first determine the expected value, which could be profit or loss. This assessment is made possible thanks to historical data. Based on previous data, the algorithm determines whether the event is feasible. For instance, if a player has scored a minimum of 15 goals in the previous three seasons, there is a good chance that he will do so again in the coming season.
Management of Bankrolls
Bankroll management is an important component of this business. The goal is to select the appropriate stakes and risk sizes. Because to use an algorithm does not assure a 100% win rate, risk management is still required. The algorithm, on the other hand, does it more intelligently.
It provides a more flexible approach than continuing to work with fixed percentages. In short, the lesser the risk, the fewer the chances of an outcome. And the greater the likelihood, the greater the stake. As a result, the difference between successful and unsuccessful bets will be very large, trying to make it a profitable venture.