How long does it take for a tipster to prove they are worth following? Do you measure it in months or in number of bets?
It’s actually both.
The longer a tipster has been providing their service indicates a commitment, a durability and a confidence in their ability to keep going through good times and bad.
Results from 1000 tips will tell you much more about a tipster than 100 tips and with more tips comes more data and more reliable statistical facts and figures.
A tipster should have been operating for at least 6 months and have a history of at least 500 independently verified tips.
Return On Investment (ROI)
Return on Investment (ROI) measures how efficiently an investment is making profit. It measures the return of an investment relative to the cost of the investment. In other words how much money is being bet versus how much profit is being made.
ROI is one of the best ways to compare the performance of different tipsters but on its own can be misleading. A tipster with a higher ROI will give you a better return on the money you invest.
An ROI of 10% for football tipsters is considered pretty good – they’re typically in the 5% to 15% range.
For horse racing tipsters the ROI can range up to 30%.
Return On Capital (ROC)
Return On Capital calculates how much profit has been made based on the size of your starting bank.
The bigger the ROC the better.
Tipster A has made £200 profit on a betting bank that started at £500 has produced a 40% ROC (200 divided by 500)
Tipster B has made £100 profit on a betting bank that started ar £200 has produced a 50% ROC (100 divided by 200)
Estimated Longest Losing Run (ELLR)
Losing runs are a big part of betting and depending upon your Strike Rate they could be very long indeed. Knowing the Strike Rate (Win Rate) it is possible using statistical mathematics to estimate the Longest Losing Run (ELLR). But it is an ‘estimate’. It is not absolutely accurate nor guaranteed but it is a good indicator and knowing it will prepare you for those loses both psychologically and financially.
The formula for calculating the Estimated Longest Losing Run is ELLR = log(n)/-log(1-SR) where n is the total number of bets and SR is the Strike/Win Rate.
P-value is an indicator of whether a tipster has some aptitude or skill or whether the ROI they have achieved is simply due to luck. The p-value is derived from the statistics t-test and based on the number of bets, their average odds and the ROI.
The p-value scale runs from 0%, zero chance that its luck to 100% which is absolutely certain its due to luck.
The lower the p-value the better.
- below 5% gives moderate evidence the ROI is not due to luck
- below 1% is considered as strong evidence the ROI is not due to luck
- below 0.1% is very strong evidence the ROI is not due to luck
The more a tipsters ROI varies month-by-month from their average ROI, the more volatile or risky the tipster is. This risk is balanced against the tipsters ROI which is the reward we are hoping to get.
Dividing the risk figure by the reward figure gives us a Risk/Reward factor which we can use to compare tipsters.
The combination of low risk and high reward is the ideal situation we are looking for so the smaller the Risk/Reward value is the better.
Value for Money (VfM)
Different tipsters produce different ROI figures and each can charge different subscription fees. This indicator reflects how much each single percentage point of ROI costs in money terms.