If you rather watch a video - this is my favorite to understand this topic - @AnomalyXRP on Twitter put me on 🤝 https://www.youtube.com/watch?v=KpNwHBJikoM or this one more specifically about +EV https://www.youtube.com/watch?v=qT_HXVAVBsQ
+EV stands for positive expected value. It's a term used in gambling to describe a bet that, over the long run, is expected to result in a profit. In other words, it's a bet where the potential payout outweighs the risk involved.
To determine if a bet is +EV, you need to consider the odds and the probability of winning. If the odds offered by the bookmaker are higher than the actual probability of the outcome occurring, then the bet is considered +EV.
Here's an example to help illustrate +EV betting:
Let's say you're betting on a coin toss. The bookmaker offers you odds of 2.10 for heads and 1.90 for tails. In this case, the implied probability can be calculated by dividing 1 by the odds. So, for heads, the implied probability is 1/2.10 ≈ 0.4762 (or 47.62%), and for tails, it is 1/1.90 ≈ 0.5263 (or 52.63%).
Now, let's assume you believe that the actual probability of heads is 0.55 (or 55%) and tails is 0.45 (or 45%). Since your perceived probability is higher than the implied probability, you have identified a +EV bet.
To calculate the expected value, you multiply the probability of winning by the potential payout and subtract the probability of losing multiplied by the amount wagered. In this case, let's say you bet $10 on heads.
Expected value for heads: (0.55 $10) - (0.45 $10) = $5.50 - $4.50 = $1.00
Since the expected value is positive ($1.00), this bet is considered +EV. Over time, if you consistently make +EV bets, you can expect to make a profit.
It's important to note that +EV bets don't guarantee immediate success and can still result in losses in the short term. However, by consistently identifying and making +EV bets, you increase your chances of long-term profitability.
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