Monte Carlo Analysis

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Monte Carlo Analysis

Category : Blog


Sports betting employs a technique called Monte Carlo analysis. It is a statistical technique for solving difficult problems. Imagine that we want to calculate the area of an irregularly shaped object. We can put a rectangle about this area and easy to calculate the area of the rectangle. We then “throw darts” in a rectangle. The field of “odd-form” can be used as the percentage of darts, which are calculated to fall within the oddly shaped area times the area of the rectangle.

We will use a Monte Carlo analysis to study the behaviour of a sports betting account. For the purposes of simulation, the bet is 1% of the sports investor bankroll. The size of the bet does not matter, but if you want to get a feel of things – you can use a bet size of $ 100, with a bankroll of $ 10,000.

The beauty of the Monte Carlo analysis is that it allows us to closely study the ups and downs of a plant. We can run simulations for many years – and get a better understanding of the expectations and behavior of our portfolio. Here we have chosen indicators, most sports investors find useful.

Based on simulations, we can learn how much you take in your bankroll in a worst-case scenario. This is “path dependent” – so that these statistics are not very robust. That is, an unlimited number of studies, there is a chance that your account is no worse than the number arrived at.

Average quarterly declines measure risks more effectively. It is perhaps more useful and practical for many sports investors who could add money to their accounts at regular intervals and “start over.”

The Monte Carlo analysis allows us to see what kind of reductions we would endure “average” for a quarter. This is important in sports betting.

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