The basic idea is that as football matches are played over a season individual points totals are updated for each team depending upon match results. Rateform points totals carry forward from one season to the next. These points are used as the basis for match predictions.

Rateform points differ from league division points in a number of ways, which have severe limitations as a means of rating teams. Not least of these differences is of course that, at the start of each new football season, football teams have zero league points!
It is also clear that, in their calculation, league division points make effective use of only one factor, that is whether a game is won, lost or drawn. Other important variables, such as the comparative quality of the opposing teams, or whether results are achieved at home or away, do not figure in league points allocation. Neither can league points be satisfactorily used in the prediction of 'cup' games, which frequently involve teams from different Leagues or divisions.
So the 'rateform' approach has several advantages.

These are the main features of the 'rateform' method.....

The precise computations are represented by the pseudocode in figure 1 below. Typically the home and away teams might contribute, respectively, 7% and 5% ( variables x and y ) to the kitty. The difference in these percentages represents the advantage to the home team of playing on its own ground, so if the away team overcomes this disadvantage it gains extra points.

CALCULATING 'RATEFORM' POINTS (1) 
 
The HOME team begins with a points total of htot 
The AWAY team begins with a points total of atot 
 
For each match played the home team contributes x%
of its points and the away team contributes y%
( x is greater than y ). 
 
The actual points contributions of the home and
away teams are represented by hgives and agives
respectively. 

  hgives = x% of htot
  agives = y% of atot 
  kitty = hgives + agives 
 
The number of points each team receives from the
kitty is represented by hgets and agets. 

  If a home win then 
    hgets = kitty      agets = 0 
  If an away win then 
    hgets = 0      agets = kitty 
  If drawn game then 
    hgets = kitty / 2 ( rounded down )
    agets = kitty - hgets 
 
( if kitty is an odd number the away team
   gets the extra point ) 
 
The nett gain or loss to each team is hnett
and anett. 

    hnett = hgets minus hgives
    anett = agets minus agives 
 
Finally new points totals are calculated for
each team. 

 htot = htot plus hnett   atot = atot plus anett 

 

Some specific examples will help demonstrate how the system operates.
Consider three football teams starting out with the points totals shown in figure 2.

Result to points conversion - figure 2

CALCULATING 'RATEFORM' POINTS (2)
 
Starting points ....
 
Blackburn 1232   Each to play Oldham (478 points)         
Man Utd   1804 
West Ham   486 
 
 
Match 1.  Blackburn v Oldham - result HOME win
 
Blackburn ( home )        Oldham ( away )
1232 pts X 0.07 = 86      478 pts X 0.05 = 24
              Kitty has 110 points
From kitty win gives 110  From kitty loss gives 0
Nett gain  +24            Nett Loss  -24
 
Match 2.  Oldham v West Ham - result AWAY win
 
Oldham ( home )           West Ham ( away )
478 pts X 0.07 = 33       486 pts X 0.05 = 24
              Kitty has 57 points
From kitty, loss gives 0  From kitty win gives 57
Nett Loss  -33            Nett Gain  +33 
 
Match 3.  Man Utd v Oldham - result DRAWN game
 
Man Utd ( home )          Oldham ( away )
1804 pts X 0.07 = 126     478 pts X 0.05 = 24
              Kitty has 150 points
From kitty, draw 75       From kitty draw gives 75
Nett Loss  -51            Nett Gain  +51 
 
 
Final points ....
 
Blackburn  1256           Oldham 472
Man Utd    1753 
West Ham    519 
 

Each of the teams play Oldham and match results are as indicated. In match 1 Blackburn are playing at home. Blackburn and Oldham contribute respectively 7% and 5% of their points totals to the kitty. The contribution of Blackburn being more because, not only have they the larger starting points total, they are also the team playing on their home ground. The kitty now contains 110 points. Blackburn win the match and take all of the kitty. Oldham receive no points. The nett gain to Blackburn is +24 points. This is the value of the kitty less the initial contribution. Oldham have sustained a nett loss of -24 points. You will see that the points average of 1000 is undisturbed.
In the first match the overall gain to Blackburn has been quite small. They have won at home against poor opposition. In match 2, Oldham, now the home team, continue to do badly and are once again defeated. In this case both teams began with a low points total, but by winning away from home West Ham have gained extra points.
Finally, match 3 shows one possible consequence of a draw. Manchester United have drawn at home against Oldham, but have actually lost points. It was clearly a game they should have won ! Oldham, on the other hand, have greatly benefited from drawing away from home against top opposition.

So, using this system, the final points allocation is determined by the result, the relative quality of the opposing teams, and whether wins or draws are secured at home or away. The individual team ratings (at least for teams which remain in the same division) are carried forward from one season to the next. How quickly points change over the season depends upon the size of the contributions to the kitty. The lower the percentage contribution the more 'long term' form is reflected.
There is no doubt that the winning potential of football teams varies considerably from one season to another, the form of one year being a poor guide to that of the next. For this reason, as far as relegated and promoted teams are concerned, there seems little use in retaining the previous season's points totals when they move to a new division. It is also clear that, as the years pass, there is insufficient interaction between teams from different divisions to justify this. This leads to the conclusion that it is probably best to allocate an average set of points, approximately 1000, to newly promoted or relegated teams. Such teams are then placed mid-way in their new division.
So, bearing such factors in mind, and the fact that the modern trend is for considerable changes in team personnel from one season to the next, there is need for some re-distribution of points at the start of each new season. In particular certain teams, such as Rangers and Celtic in the Scottish Premier, invariably amass a vast number of 'rateform' points by the close of the season, some of which must be re-distributed to ensure the system remains viable. 

Up to now consideration has been given to the calculation of individual 'rateform' points. The next step is to use these values to predict results. It will probably come as no surprise that points difference, that is home team points minus away team points, is the basic forecasting unit used in the 'rateform' system. (The use of a points differential, the points 'gap' between teams, is a popular approach in many forecasting systems). Figure 3 shows some 'rateform' predictions.

Examples of 'rateform' predictions - figure 3             

'RATEFORM'  PREDICTIONS 
 
Points totals ....
 Blackburn    1256
 Man United   1753
 West Ham      519
 Oldham        472 
 
Match 1.  Man U v Blackburn 
1753 minus 1256 = Points Difference of +497
 .... a HOME is forecast 
 
Match 2.  Oldham v Blackburn 
472 minus 1256  =  Points Difference of -784
 ..... an AWAY is forecast 
 
Match 3.  West Ham v Oldham 
519 minus 472  =  Points Difference of +47
 ........ a DRAW is forecast 
 
( no adjustment has been made for home
  advantage or division difference ) 

 

It can be seen that the size of the points difference determines the prediction category into which each match falls. For example it might be decided that any differences of 100 or more should be classified as a potential home win, and of -100 or less an away win. Any intermediate values to be draw predictions. As it stands this method does not consider home team advantage, which is of course the cause of the larger proportion of home wins compared to aways or draws. The home advantage might be judged to be the equivalent of a bonus of 100 points to the team playing on its own ground.
In practice another adjustment is necessary. Where cup matches are being played in which the opposing teams come from different divisions. This can be done by allocating varying points bonuses to teams depending upon the league or division in which they play.