Betting systems on betfair (exit strategies)?

What's the most foolproof system to use on betfair for backing and laying. Scenarios, Team A (1.5 to win pre match) and Team B (6.1 to win pre-match). So lets say you back Team A for 50. So say it's still 0-0 at 80min should you then back the draw.. Or it's 80min and 0-1 (Team B winning) should you then back B or lay Team A. Basica lly what would be the best exit strategy here. What is your system of betting on football? Unless you know the actual probability that Team A will win then there is no foo lproof way to win. However you do know that the bookie set the odds for team A t o win and for team B to win such that he's likely to make money hence they don't actually reflect his real estimate of what the probabilities are but they do de fine an upper bound and a lower bound for his estimate. You can calculate the midpoint and use that as a slightly better guess at what t he actual probability is. That is for team A to win it would be (1/(1.5+1) + (1 - 1/(6.1+1)))/2 = 0.6296. So it's reasonable to think that the bookie actually t hinks that team A has a 62.96% chance of winning and has set the payout odds eve nly around that. Now we know that isn't true because the bookie will adjust the payouts such that he's covered either way so the odds would've changed due to ma rket forces so the best you can say is that this is the market consensus as to t he probability of winning. Using these numbers, the Kelly's Criterion ( p - (1-p)/b) gives a fraction of 0. 3826 for betting on team A to win and a fraction of 0.2672 for betting on team B . Since you don't really know what the probability to win actually is, you only know that the Kelly fraction is around those values but you do know that you do not want to exceed the Kelly's fraction on a bet so you do a 75% fractional Kell y bet on team A since that's the larger of the two Kelly fractions and hence giv es you the most margin for error. That means if you have $50 in your wallet, you would bet $14 on team A to win. But you also have the option of hedging and pla ying both sides, so divide your wallet in half and bet $7.17 on team A to win an d $5.01 on team B to win, it's best to do a sanity check and do an expectation c alculation to see if you're still gaining on the edge since you will both win an d lose at the same time ie.: your expected gain would be 0.6296 * ( $7.17 * 1.5 - $5.01 ) + ( 1 - 0.6296) * ( $5.01 * 6.1 - $7.17 ) which gives you $12.28 which means this is a viable hedge. Basically in this scenario, you will make $5.74 o verall if team A wins and $23.39 overall if team A loses. Since you have gain ei ther way, it may be viable to scale up your bets by a factor of 4 and invest all available capital but the usual wisdom is to never ever exceed the Kelly's Frac tion. In theory, the result over the long run should be exponential growth of yo ur wallet so long as you remain under the Kelly's Fraction, any higher and you c ould be the victim of volatility, hence the fractional Kelly bet. This also means that the bookie sweetened the pot on the underdog because most p eople were betting on the favorite so he needed underdog bets to cover if team A wins. He makes money off the spread (he's hedging too) so he doesn't care if th e odds are giving you the edge once the betting volume guarantees his profit. No t all odds present this situation but if you can spot it quickly enough, you can benefit from it. You should also try various values for the probability of a win so that you know

in what range of probabilities, the hedge would still pay off. That is graph th e expected gain versus probability of team A winning when you vary it from 0 to 1. You should do this analysis on several prospective games to bet on and bet on the game that shows a profit over the widest range of probabilities. Naturally, if you can collect more information about the actual probability of t eam A winning, the better especially if you have more information than the booki e. One strategy might be to collect a consensus of odds offered by several booki es, another would be to evaluate opening odds as those would be based on the boo kies own research, yet another would be to use odds as close to closing as possi ble which reflect the consensus of the betting community. Another would be to tr ack who actually is doing the math for the bookie and evaluate the history of hi s opening odds versus the actual performance in the past to come up with a value of how much off he tends to be. You can also do your own research and calculate the probabilities on past performance of the teams in question and of what you know of the game. Also there are many computer simulation games that use statist ics on the individual players to run a simulated game. You could run a couple of thousand game simultations and use the results as probabilities. One of the reason for the Kelly Criterion is so that you have money left for the next bet if you lose the current bet but the equation is based on a binary outc ome. I would have to think a little bit more to come up with a 3 outcome equatio n. Actually I've been trying to generalize the Kelly's Formula for a couple of d ays now. Note that the Kelly Criterion was the application of Shannon's work in telecommu nications to betting. Two MIT professors Thorp and Kassouf took these equations to Vegas, made a killing, then to the race track, made even more money and then to WallStreet and the Hedge Fund industry was born. Unfortunately, sites and bots like betfair are not designed to be used by Engine ers so they are not amenable to the use of equations. The best you can do is dow nload text files to import into Excel spreadsheets to evaluate the situation. As to midstream optimization, yes Financial Engineers do that too but I haven't worked it all out yet. Still focusing on betsizing. They are now calling Financi al Engineers Quants on Wallstreet. Is your example a real game? Can I still get these odds? If so I'd like to place a couple of bets. Do they give odds on draws? If so, I should be able to work a draw into the equa tions.