what exactly are ELO ratings? are they good?

[GoodGuy]

i've been wondering about ELO ratings and if anyone knew if they were a good guide to bet. if so how does one use the ratings? thanks

[a1ehouse]

Re: what exactly are ELO ratings? are they good? Elo GoodGuy!! I'd be interested in suggestions how to best use the ratings too having spent a week deriving historical ratings!! Elo is a way of calculating the relative strength (or weakness) of two opponents. A teams rating is derived over time using the Elo formula: R_n = R_o + K × (W - W_e) W_e = 1 / (10^(-dr/400) + 1) (K can be adjusted based on goal difference) Won't bore you too much with the detail you can do a search on the web for that! Basically the ratings go up and down depending on who won the match, what the goal difference was and also whether a team was playing at home or not (slight advantage). e.g. Going off my own calculated ratings from the Villa 1 v 2 Boro game the other day: Pre-match ratings: Villa 1354 pts Boro 1241 pts Post-match ratings: Villa 1331 pts Boro 1265 pts I'd say this would have been a closely matched contest with a slight advantage for Villa. Obviously the ratings can mean diddly squat as Villa lost, but if you're developing a system you'd set exclusion rules (e.g. no less than 200 points difference etc.) This is where back testing and trend analysis comes into play and it all starts to get a bit more complex. Ratings fluctuate after each game, and changes can be quite large e.g. if a high rated team playing at home is beaten by a low rated team the points that change can be quite big and as with any event it may only have been a blip in a team's form. They can be a good indicator of how a game *should* go, but obviously not the holy grail. You could even look at long term ratings (5/6 seasons) short terms rating (1/2 seasons) or even detailed (5/6 games) ratings to derive your own system etc.