Compared to any other major sport, baseball is thought to be a game of streaks. The 162-game MLB season constantly produces both individual and team streaks, with players and ball clubs going hot or cold for multiple games.
Naturally, actors in the sports betting market try to capitalize on this and find ways to make money off of streaks. This has led to all sorts of people hyping up their betting strategies, and you could think that there’s a simple way available to win with investing in MLB streaks if you did some searching on the topic.
But is there really money to be made here? And how real is the hot hand in baseball? Read on to find out.
MLB Myth Busters – Is riding streaks a profitable sports betting system?
Enter the search term “how to bet on streaks in baseball” to your favorite search engine, and you’ll quickly find a ton of simple strategies that come with the promise of positive returns.
“Always ride a streak of five or more wins until it ends” or “go against teams on a losing streak” are examples of some of the “winning systems” that various people are touting. It almost seems to have become conventional wisdom that riding streaks is an easy way to make money in baseball.
Here’s the thing though – and this applies to basically any approach in the sports betting market, not just streaks in baseball. If such a simple system had once worked and absolutely everyone now seems to know about it, guess who has been aware of the trend a lot longer than you? The bookmakers, of course. And they’re extremely good at adjusting to these types of beliefs to make sure that they get their money.
So, most of the time, if you crunch the numbers and do research on how these types of simple strategies have performed historically, you’ll notice that they would have ended up losing you money.
Why is it so easy to get caught up in the idea of making a quick buck with investing in streaks then?
One explanation could be that it’s just so easy to see in hindsight how profitable it could have been to capitalize on a streak. Of course you should have started putting your money on team X at the early stages of their ten-game tear – it was clear that they were going to do it, players Y and Z had been on fire the whole month!
But the fact is that we most often recognize a streak when it’s already close to ending. And when we act based on emotion in hopes of making some easy money, we end up making silly investments.
How should sports investors approach streaks in baseball?
Let’s take a step back and talk about streaks in baseball in general. For a long time, there have been discussions and arguments within the sabermetrics and advanced analytics communities on whether or not streakiness or having a hot hand is actually a thing at all in baseball.
In regard to individual player performance, research results from recent years seem to point in the direction of streakiness being a real phenomenon.
For example, Brett Green and Jeffrey Zwiebel found strong evidence in their research for the existence of hot streaks. Their findings pointed to a significant effect that hot streaks have on player performance:
”Strong recent performance relative to being in a neutral state corresponds to roughly a one quartile increase in the distribution of present performance. Thus, a 50th percentile hitter will hit like a 75th percentile hitter following strong recent performance.”
Another example is a research piece from Rob Arthur and Greg Matthews, who examined the performances of the top 50 starting pitchers during the 2016 MLB regular season.
They found out that on average, “the typical pitcher goes through 57 streaks in a season, jumping between hot and cold every 24 fastballs”. Between being in a hot or cold state, the typical pitcher had an average of about two miles per hour difference in the velocity of their pitches.
But team streaks are, of course, highly contextual. What does it really tell us that a team has won four in a row? Why should we think that that’s enough data for us to predict that they’ll win their next game as well?
In reality, a short streak like that could be caused by a lot of factors outside of a team finding their rhythm and individual players getting hot. Maybe the streaking team just had a four-game series against the worst team in their conference. Maybe an opponent was weakened due to injuries. Maybe there were some lucky breaks and close calls. Maybe their next series is away against the toughest squad in the league.
To conclude, throughout our years of experience and research in finding sports investment systems that produce high returns year after year, one constant theme has prevailed: Systems that have a simple hypothesis and broad parameters always end up failing. We’ve even written about some of our failed experiments, which you can read about here and here.
The lesson here is that streaks are a real thing in baseball and they certainly can be capitalized on by sports investors. But you’ll need to dig in a lot deeper and find the very specific cases where riding streaks is actually profitable in the long run. Making money in the market is rarely very simple.
To learn all the basics of building sports winning investment systems, check out our head trader John Todora’s new book – “Zero Correlation Investing – The Score Metrics Secret”, which is currently on sale for a limited time.
The ScoreMetrics Lab is the engine that runs the Sports Trading System operation, consisting of a team of researchers and writers who are constantly testing and retesting algorithms. They work hand in hand with our Head Trader and Creator of ScoreMetrics, John Todora to help find new breakthroughs and develop new systems.