I received a question in the comments section of my previous article, Change Your Environment to Promote Success, about the level of mathematics knowledge required to be a sports trader. My answer was so long that I decided to write this article with it. The question was a difficult one to answer because sports trading has many
entry points, some requiring a lot of mathematical skill and some
requiring less mathematical skill but still a lot of common sense. I
could talk in terms of academic qualifications but judging by the commenter's
use of the term "math" rather than "maths", as we say in the UK, means
that the questioner's education system is probably different to the one I went
through and so I will answer the question in more general terms.

The commenter asked

But where to start and find reliable learning sources for improving math skills, should I first remind myself with high school basics and gradually go towards more complex math,what do you think how should I organize my learning,having in mind that I only know basic math(maybe little bit better but lets say just basics is with what I am completly proficient),but never had problems with understanding math concepts,or some kind of math fobia,so question is how and where to start in that way that my learning would be really fruitul,applicable?And one more question do you think it is wise first to get decent math knowledge as a foundation prior to learning programming? Thanks in advance.

There is the gambling quote, "I'd rather be lucky than good," which means so long as you are making money then why worry. If you are making money with little academic acheivement and you like what you are doing then it is quite all right to not want to put any extra baggage in your mind. After all, you are unlikely to use it.

Some people can start off in sports trading and make a profit without really knowing what they are doing. Either they have some latent talent that cannot be quanitified or they are extremely lucky and the law of large numbers is waiting around a dark corner with a cosh, to mug them of all their winnings.

If the idea of sitting in a chair all day long, looking at screens and making money appeals to you then I suppose sports trading is as good as any other job but for one difference. In any other office job (with the exception of proprietary financial trading) you are being paid by someone else to do the work. As a trader you are being paid by yourself and if you have no talent then you are going to lose money. That talent might be inate or it might be created through study, of which mathematics will play a part.

Recently, there was a short series of programmes on UK television about Corals, a bookmaker. One episode showed one of Corals' high street betting shops and the people that go there to bet. Betting shops in the UK are now permitted to have gaming machines in them. As if fleecing people with overround sports books wasn't enough these gaming machines offer video roulette and other such casino games with which to demonstrate negative edge games to the public. One visitor to the bookmaker wasted his unemployment benefit on a video roulette machine. His lack of simple mathematical skills probably kept him drawing benefit and heading to the the machine. Unfortunately, many people do not understand the concept of edge and lose heavily (what else are they supposed to do?) to these machines.

Recently, there was a short series of programmes on UK television about Corals, a bookmaker. One episode showed one of Corals' high street betting shops and the people that go there to bet. Betting shops in the UK are now permitted to have gaming machines in them. As if fleecing people with overround sports books wasn't enough these gaming machines offer video roulette and other such casino games with which to demonstrate negative edge games to the public. One visitor to the bookmaker wasted his unemployment benefit on a video roulette machine. His lack of simple mathematical skills probably kept him drawing benefit and heading to the the machine. Unfortunately, many people do not understand the concept of edge and lose heavily (what else are they supposed to do?) to these machines.

However, I am not sure that a basic understanding of maths will help those people who gravitate towards gaming machines. As discussed by myself and Casini in Perpetual Change, for some people the laws of probability do not matter to them. Luck will conquer all. It would appear that Steve Jobs is not the only one who enjoyed a reality distortion field. Seeing as these machines only take £1 bets you would have to have an enormous reality distortion field to give you a winning run long enough to make you seriously wealthy. Even in sports trading it is easy to create a spreadsheet showing you how your winnings are going to ramp up and dump you on a sun drenched island in the Pacific. Reality is never like that. All the blogs I come across (including this one) are written by people plugging away in their spare bedroom under dreary UK skies.

I guess the best kind of maths to learn is the kind that shows you what a bad bet looks like. I can't teach anyone how to become rich but I can stop them from losing money. After that it is up to you to decide what you want to learn, depending on the kind of betting/trading that you want to do. I wrote an article on edge, Edge, Expectation and Kelly Criterion, which should explain, in simple terms, how to determine a good bet from a bad one. You can ignore Kelly Criterion, for the time being, as that is more to do with money management.

When building and evaluating systems, a useful book to have is Joseph Buchdahl's, How To Find a Black Cat in a Coal Cellar. Ostensibly, the book teaches you how to evaluate other people's systems but the mathematics within can help you to evaluate your systems too. The particular branch of mathematics used by Buchdahl is statistics and probability theory. If you want to read up on maths that is of use to a sports trader then that area of maths is the place to start your reading.

Any books that take you up to what we would call in the UK an A-Level standard (pre-university level) in statistics and probability would suffice. I don't think that not having a mathematics qualification as a school leaver will stand in your way, if you are really interested in becoming a sports trader. We have all wondered, as school children, what the point was of learning maths that had nothing to do with the world around us. Eventually, though, some of us will want to fill our world with things that have mathematical properties and maths is the tool that helps us to understand those mathematical properties.

The things you need to learn are :-

- How do markets work? The battle between backers and layers. Each side wanting to make money, tugging prices one way and the other.

- Price oscillation as the market determines the price through the Wisdom of the Crowd. Trends created when prices relax as the book becomes less overround or as momentum is created through new information entering the market.

- The effect of late breaking and inside information on prices.

- The roundness of the book. Odds can be converted to probabilities - 100% is a round book. >100% is overround and erodes betting profitability.

- Determing when you have an edge. When betting, is the price right? When trading, is the price going to move in the direction you think it will move?

- Mathematics for system building. Charting, simple statisitcs for building your own metrics. A few select charting techniques used in financial trading -

*e.g.*the moving average and volume analysis.

- Money management. Making the most of an edge. Losing as little as possible when that edge turns negative. Now you can learn about Kelly Criterion.

Your interests will determine what you want to learn. Gathering data, spreadsheeting and charting it will make you ask questions. Those questions might require you to research on the web for a mathematical skill or tool to help you answer the questions. Research plays a large part in sports trading. An enquiring mind and a search engine can go a long way.

As far as programming is concerned, it always annoys me when someone asks, "Which language do you like/usually program in?" It's a silly question. If you can program then you shoud be able to program in any language, after suitable conversion. All pogramming languages are based on logic and so I would recommend a basic understanding of predicate calculus. That's rather old school and probably today's programmers learn Python, have no idea what predicate calculus is and refuse to program in any other language.

Still, thinking logically is the only way to write a computer program and not a course on a specific language. Programming is an art, more than a science and whatever programming your teacher teaches you then you will find another way. If you have never programmed before then you can't go wrong with Visual Basic and any beginner's book. However, like carpentry, you don't go to college to learn hammers or chisels. You learn how to be a carpenter, develop skills and use the appropriate tools.

i 8 sum pi and it was delicious

**Further Reading**