The Concepts That Matter — The Betting Toolkit · Odds Briefing

The Betting Toolkit

The Concepts
That Matter.

A plain-language companion to the Betting Toolkit. Eight concepts, worked examples from real bets, no jargon. Read it in 10 minutes. Reference it whenever you need.

Portfolio tracker on screen with match in background

Your betting, treated like
a portfolio.

Concept 01

Expected Value (EV)

Expected value is what you'd win or lose on average if you could make the same bet a thousand times.

Worked Example

You back Inter Milan at decimal odds of 1.90. You estimate their true probability at 58%.

If you're right about the 58%, then out of 100 identical bets:

58 wins × 0.90 profit = +52.2 units

42 losses × 1.0 lost = −42.0 units

Net: +10.2 units. EV per bet = +0.102 units (10.2% edge).

You don't need to win every bet. You need the average to be positive.

Try It Yourself — EV Calculator

Decimal Odds

Your Est. Probability %

Stake (units)

Why it matters

EV is the foundation of everything else in the tracker. CLV, Kelly, Sharpe — they all build on this idea. A single bet can go either way, but over hundreds of positive-EV bets, the maths converges. Your job isn't to pick winners. It's to find bets where the price is better than the true probability justifies.

If the Risk Engine says "NO EDGE":

The odds don't justify your probability estimate. The EV is negative. The correct position is zero. Walk away.

In the Tracker Trade Log → Column N (EV %) | Performance tab → Expected Value per Bet

Concept 02

Closing Line Value (CLV)

CLV measures whether you consistently get better odds than where the market settles. It's the closest thing betting has to a leading indicator of profitability.

Worked Example

You back Club Brugge −0.5 at odds of 1.95. You believe the fair odds are 1.80.

CLV = (1.80 ÷ 1.95) − 1 = −7.7%

That's negative. You got worse odds than the true price. Even if the bet wins, the decision was wrong.

Now flip it: you bet at 1.95, fair odds are 2.10.

CLV = (2.10 ÷ 1.95) − 1 = +7.7%

Positive CLV. You got a bargain.

The insight that changes everything:

A positive-CLV bettor who's currently losing money is in a variance trough — the profits are coming. A negative-CLV bettor who's currently winning is on a lucky streak — the losses are coming. CLV tells you which one you are before the results do.

Why CLV beats win rate as a metric

Win rate is noisy. Five-bet losing streaks happen to profitable bettors regularly. CLV cuts through the noise because it measures decision quality, not outcome quality. You can't control whether a 58% probability event happens this Saturday. You can control whether you bet it at better odds than the market.

Try It — CLV Calculator

Your Odds (Decimal)

Fair Odds (Your Estimate)

In the Tracker Trade Log → Column I (CLV %) — auto-calculates from Columns G and H

Concept 03

Bankroll Management

Your bankroll is finite fuel. Bankroll management determines how much you burn on each bet so you survive the inevitable losing streaks and stay in the game when the edge pays off.

Three principles the tracker enforces

1. Separate your bankroll from your life.

The units in the tracker represent money set aside exclusively for betting. Not rent, not savings. A dedicated pot you can afford to lose entirely.

2. Size bets relative to your edge, not your conviction.

A bet where you estimate 60% probability at odds of 1.85 deserves more capital than one where you estimate 53% at 1.95. The Kelly Calculator handles this. Conviction without probability estimates is just emotion.

3. Never exceed the cap.

The tracker defaults to a 5% max bet cap per trade. Even if Kelly suggests more, the cap protects you from scenarios where your probability estimate is wrong.

The probability of ruin

A full Kelly bettor with a 55% win rate at average odds of 1.90 has a roughly 8% chance of ruin. A quarter Kelly bettor with the same edge? Under 0.01%. The difference is entirely bankroll management.

In the Tracker Risk Engine tab → Rows 7–9: Starting Bankroll, Kelly Fraction, Max Bet Cap

Concept 04

Kelly Criterion

Kelly tells you the mathematically optimal amount to bet given your estimated edge and the odds on offer. Too little and you leave growth on the table. Too much and a bad streak wipes you out.

Worked Example

Roma v Lazio, BTTS Yes offered at 1.75. You estimate the true probability at 63% (fair odds: 1.59).

Full Kelly = (0.63 × 0.75 − 0.37) ÷ 0.75 = 13.7% of bankroll

Quarter Kelly = 13.7% × 0.25 = 3.4%

With 100-unit bankroll: stake 3.4 units.

If the odds were only 1.55 with the same probability, Quarter Kelly drops to 0.3%. The thinner the edge, the smaller the position. Kelly enforces this automatically.

Why the tracker uses Quarter Kelly

Full Kelly assumes your probability estimates are perfectly accurate. They aren't — nobody's are. Quarter Kelly captures roughly 75% of the theoretical growth rate while dramatically reducing the chance of ruin. It's the standard in professional betting and quantitative finance for good reason: it's robust to estimation error.

When the calculator says "NO EDGE":

Your probability estimate doesn't justify the odds. The correct position size is zero. This isn't the calculator being conservative — it's telling you the EV is negative at this price.

In the Tracker Risk Engine tab → Enter odds (Col C) and probability (Col D). Read the Capped Stake (Col I).

Concept 05

Sharpe Ratio

The Sharpe Ratio measures whether your profits justify the volatility you experience getting them. Two bettors can have the same ROI, but the one with less variance has a higher Sharpe — and a more sustainable edge.

How it works

Sharpe = (average return per trade) ÷ (standard deviation of returns). The higher the ratio, the more consistent your edge. The tracker annualises this assuming 250 trades per year, making it directly comparable to other asset classes.

Below 0.5

Poor. Your edge doesn't compensate for the volatility.

0.5 – 1.0

Acceptable. Profitable but volatile. The ride is bumpy.

1.0 – 2.0

Good. Consistent risk-adjusted returns. Where serious bettors live.

Above 2.0

Excellent. Exceptional consistency. Rare and worth protecting.

Benchmark context

The S&P 500 has a long-term Sharpe of roughly 0.4–0.5. A bettor with a Sharpe above 1.0 is generating better risk-adjusted returns than the stock market. The Performance tab compares your Sharpe directly against this benchmark.

In the Tracker Performance tab → Sharpe Ratio (annualised, 250 trades/yr)

Same match. Same edge.
Different outcomes. That's variance.

Concept 06

Monte Carlo Simulation

The simulation replays your betting season 20 times with the same edge but different random outcomes, showing you the full range of what's statistically normal.

How to read the chart

The dashed line is your expected value — where pure maths says you should end up given your win rate and odds.

Each coloured line is one simulated season. Same edge, same probabilities, different sequence of wins and losses.

The spread between the lines is variance. Not skill difference. Not strategy failure. Just the randomness inherent in a probabilistic game.

When to use it:

Open the Variance Lab when you hit a losing streak. Run the simulation. If your current drawdown falls within the range of simulated outcomes, you're experiencing normal variance — not a broken strategy. Don't change your approach. Don't chase losses. Don't increase stakes to "recover." The edge is still there.

Putting losing streaks in context

A bettor with a 55% win rate will hit a 5-bet losing streak roughly once every 33 bets. An 8-bet streak approximately once every 250. These feel catastrophic when they happen but they're statistically mundane. The Variance Lab makes this visible rather than theoretical.

Try It — Quick Variance Check

Win Rate %

Avg Odds

Bets

In the Tracker Variance Lab tab → Menu: Variance Lab → Run Monte Carlo Simulation

Concept 07

Maximum Drawdown

Maximum drawdown is the largest peak-to-trough decline in your cumulative P/L — the deepest valley you've fallen into from any high point.

Worked Example

Your running P/L over 10 trades: +2, +5, +8, +12, +9, +6, +4, +7, +11, +14

Your high-water mark hit +12 after trade 4. You then dropped to +4 after trade 7.

That's a drawdown of 8 units — even though you ended the sequence at +14.

The tracker uses a proper high-water-mark calculation, so it always measures from the true peak.

What's normal for a 100-unit bankroll

Under 10u

Conservative range, or early in your sample.

10–25u

Normal range for a profitable bettor over 200+ trades.

25–40u

Painful but survivable. Cross-reference with CLV and Variance Lab.

Over 40u

Review your CLV. If negative, the strategy needs work — not more patience.

Using drawdown as a diagnostic

Drawdown alone doesn't tell you whether to worry. Drawdown plus CLV does. A large drawdown with positive CLV is variance — hold steady. A large drawdown with negative CLV is a signal that your handicapping needs to change.

In the Tracker Performance tab → Maximum Drawdown (units), Max Drawdown %, Current Drawdown

Concept 08

Win Rate vs Edge

Win rate is half the equation. The other half is the odds you're winning at. A 50% win rate at 2.10 is more profitable than 65% at 1.40.

The Maths

Bettor A: 65% win rate, average odds 1.40

Per 100 bets: (65 × 0.40) − (35 × 1.0) = 26 − 35 = −9 units. Losing.

Bettor B: 50% win rate, average odds 2.10

Per 100 bets: (50 × 1.10) − (50 × 1.0) = 55 − 50 = +5 units. Profitable.

Bettor A wins more often. Bettor B makes more money.

Breakeven win rates by odds

The minimum win rate needed to break even at each price. Anything above is profit.

1.50

Need 66.7%

1.70

Need 58.8%

1.80

Need 55.6%

1.90

Need 52.6%

2.00

Need 50.0%

2.50

Need 40.0%

The favourite-bias trap

Most casual bettors back heavy favourites because winning feels good. An 80% win rate at odds of 1.15 sounds impressive until you do the maths: one loss wipes out five wins. The tracker shows win rate and ROI side by side so this trap becomes impossible to miss.

In the Tracker Performance tab → Win Rate alongside ROI, Avg P/L per Trade, and Avg Odds

Your First 10 Minutes

Open the tracker. Go to File → Make a Copy. That's your version now.

Risk Engine tab. Set your bankroll (default: 100 units). Leave Kelly at 25% and the max cap at 5%.

Before your next bet: enter the odds and your estimated probability in the Risk Engine. Follow the Capped Stake column.

After the bet: log it in the Trade Log. Include your fair odds estimate in Column H — this generates your CLV automatically.

After 10+ trades: check the Performance tab. Three numbers matter: CLV average, Sharpe Ratio, and max drawdown.

Ready to Track Edge?

Open the tracker, log your first trade, and check your CLV. That's all you need to begin.

Open the Toolkit

The ConceptsThat Matter.

Expected Value (EV)

Why it matters

Closing Line Value (CLV)

Why CLV beats win rate as a metric

Bankroll Management

Three principles the tracker enforces

The probability of ruin

Kelly Criterion

Why the tracker uses Quarter Kelly

Sharpe Ratio

How it works

Benchmark context

Monte Carlo Simulation

How to read the chart

Putting losing streaks in context

Maximum Drawdown

What's normal for a 100-unit bankroll

Using drawdown as a diagnostic

Win Rate vs Edge

Breakeven win rates by odds

The favourite-bias trap

Your First 10 Minutes

Ready to Track Edge?

The Concepts
That Matter.

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