EWEdge finds each-way horse racing bets where a bookmaker’s price is better than the horse’s real chance of placing.
Pricing the place market
Estimating a horse’s chance of winning is comparatively easy. A bookmaker’s own prices imply one already. Strip out the margin built into the book and every runner in the race has a win probability attached to it.
Half the stake of an each-way bet rides on the horse placing, the odds of which are fixed relative to the win book. Based on the size of the field the bookies decide how many places are paid and at what fraction. So the basis of a winning each-way betting strategy is: given a win probability for every runner, what is the chance that this particular one finishes in the top three or four?
An approximation can be made by treating each finishing position as an independent draw from whatever is left of the field. This approach overstates the place chances of short-priced favourites and understates everything running behind them. The basis of EWEdge is correcting for this bias and using it to make more accurate place predictions.
Proving the predictions using data
By analysing predictions and results for thousands of past races, the accuracy can be verified and the model honed. Of course knowing that you would’ve been able to predict races in the past doesn’t guarantee that you have a profitable strategy, so the next step is to test it on real races, against real bookmaker odds, in real-time.
Testing it before risking money
Every selection is paper traded first, into a ledger which simulates placing a bet on favourable selections at odds currently available on the bookies’ websites. Then it is reconciled against the actual result. Nothing gets published on the strength of a backtest.
That distinction matters more than it sounds. A backtest tells you what the model would have said. A paper trade tells you whether the price you believed you could get was genuinely there, at the size you wanted, at the moment you wanted it. Those are very different numbers, and the gap between them is where most betting systems quietly die.
The published record is generated from that ledger.
The product is live at eachwayedge.com, and the method is explained in more depth on its each-way value betting page.