Wednesday , 26 November 2014
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The Truth About Purchased Betting Systems

Some of our loyal readers have got in touch and said that I should write a little bit about betting systems.

When they first began to bet they started with systems. A lot of these systems failed and the few that worked then began to fail just a few months later!

What is the truth about using purchased betting systems?

Like all forms of betting methods there are pro’s and con’s to betting systems. Generally speaking the positives are:

  • Easy to use
  • Quick to find selections
  • No handicapping needed
  • No research needed on the day of racing
  • No ambiguity over the selections

Some of the negatives are:

  • Easily back-fitted
  • Low ROI
  • Complex systems take time to implement (making speed a problem)
  • Edge easily eroded
  • Don’t know if the system seller is honest or scamming

There are of course many more but these are some of the main positives and negatives of system betting.

I don’t think there is any reason to go through the positive reasons as these are why you may want to purchase a betting system to begin with. It is the negative reasons that we need to focus on.

It is important to start by answering the question:

Can betting systems make a profit?

The answer to this is definitely a ‘yes’. Betting systems can make a profit. The majority of betting systems that I have seen being sold don’t but this does not mean it is impossible.

The first problem with betting systems is back-fitting. It is very easy to make a system profitable by fitting it to past results. To build a betting system it has to be created using past data. If the system creator does not understand how to build systems properly then it is very likely that they will back-fit it. This is the process of creating a system that makes huge profits historically (because it has been built around those historical results) but when it is put to work on new races it makes a steady loss. You can quite often see signs of these systems because there are rules in the systems that do not make logical sense. For example a rule saying ‘Remove all horses beginning with the letter A’ would show likely back-fitting.

I can already hear you laughing but I can show you a system where horses that don’t begin with the letter A show a significant profit historically. The important question is ‘Will this work in the future?’ and of course our example would not.

As a general rule most bought systems that show a profit have a fairly low ROI. I don’t know why this is but I would guess that it is because creating a high ROI system requires a lot more time and skill than creating a low ROI system. The problem with low ROI systems means that just a slight change in conditions means that it could be pushed into a losing method.

This brings me on nicely to eroding the edge. Because the edge (and ROI) is low in these systems it can be easily eroded. Simply having too many people betting on the selections can reduce the odds enough to turn a profitable system into a losing one. This is especially true for systems that find selections in the higher odds ranges. Some systems that are profitable when you first get them then become losing because the edge has been eroded by to many people using it.

How can we find the systems that work?

Once you have decided that you are going to purchase a system then you should test it thoroughly by paper trading before placing any of your money on it. A good rule is to have a minimum number of 100 qualifying bets before you start to use it. If you really want to make sure that something is going to work then you should be using 3000 selections before use but sometimes this is just not possible. I have seen methods make a huge profit over 2000 selections but lose over 3000. I have never seen a system win over 3000 selections and then go on to lose. Of course you can always run the system through a database to see if it works well which can speed up the process of trialling.

You should run a portfolio of systems. Never put everything into one pot. It is advisable in any form of risk investment to spread your risk over a portfolio of investments and this is no different in sports betting. You don’t have to use just one system, you can use many systems. This has the benefit of evening out the volatility and increasing your profit. Initially you are going to need more money to bet on multiple systems (or use smaller stakes) but as you build up the portfolio you can begin to merge your banks together so that each system is utilising the power of one bank. Let me know if you are interested in this method of staking and I shall write a separate post on it.

Never throw away a bought system. Anything you purchase that gives you an idea is worth the money. These ideas can come together to form profits. The systems may not be profitable in their own right, or they may have lost their profitability, but you can still look at what went into them and adjust them to make them profitable. In fact the first consistent profit I made was done by adjusting other people’s methods to create my own. Of course some purchased systems are never going to be profitable but you will find some good ideas in a few that may lead you down a different path to a self-built system.

The key to any form of betting is to be imaginative. You need to be one step ahead of everyone else in the market to make a profit and to do this it is important to continually develop your ideas and try new concepts. It doesn’t matter how crazy and idea may be, always check it out. Even if it doesn’t work, by researching it you may find something that does!

About Michael Wilding

Michael started the Race Advisor in 2009 to help punters improve their betting profits and think outside the box with their betting strategies. To date he has written over 450 articles on the site and recently started UK Racing News which has become a leading news site for horse racing in the UK and IRE. Check out my personal blog or my Google+

8 comments

  1. Thank you Michael. I have a question though regarding systems that you buy outright as compared to tips where you have to pay a monthly subscription. Mostly tipsters just show their profit/loss without factoring in the monthly subscription. Of course they would not be paying the subscription themselves, but they should factor in that cost while accessing whether their tips would be profitable to their subscribers. So, my question is about how I would access profitability of Tips, while taking into consideration that there is a subscription attached as a fixed cost?

    And, yes, it would be good if you could write about the staking method where various systems feed off the same bank.

    Thank you again Michael

    • That is a very good point, and one that a lot of people brought up in the post at http://www.raceadvisor.co.uk/why-you-can-never-make-a-profit-from-tipsters/

      The best way of factoring this in is to look at the return on investment based on 1 unit bets. You know the cost of the service and so you can work out the minimum stake size needed to, on average, cover the cost of the service and make the profit you are happy with. Remember that you will get losing months and you still need to pay for the service during those months.

  2. Hi Michael
    How right you are.I recently bought a system and found a big improvement simply by omitting handicaps from the systems selections
    John

    • Well found John, keeping an eye out for these sort of things is a very effective way of building a system portfolio quickly.

  3. Hi I would like to point out that having purchased systems and tipster tips I do not do this any more. I also totally ignore any that boast big profits or make huge claims using past history. I am at present paper betting approx 14 tipsters this is over the last 3 months. I keep a record of the results on my computer and as these are all free there is no outlay to take into consideration. My other biggest problem is that most tipsters work on at least £10.00 per point. Ok it dose not sound a lot until you have a losing run, also you would need a betting bank of £1000.00. This in my opinion is unrealistic and as to a suggestion of £100.00 a point who has £10000.00 available. The other point is the once in a life time fee, of usually £20.00 or up to £50.00. They usually shut down after a couple of months or so..

    • Thanks for the comment Alex, some excellent points. As you say £10 a point would normally require a £1000 bankroll, 100 units is a good baseline for a bankroll if you’re unsure about any bets. As you’ve pointed out, it’s important to beware of any tipster offering a lifetime fee whether it’s £20 or £200. There’s no way that a good tipster would be able to make this work for them financially, so there’s no way it can last.

  4. Hi another one for you and your readers etc. Just received an email from free sporting tips to which I receive reasonable regular tips mostly concerning football all over Europe. However this tipster has sent me info on joining Mark Johnsons Tennis tipster service for £19.00 for a lifetime fee. It states a 30 day challenge to find 10 big priced winners. On clicking on the link provided and scrolling down to get my membership it states you have 60 days to get a full refund via Click Bank. Click on get my membership it goes to Paypal. Also FINESSBET LIMITED is at the top. From previous experience with Finessbet and Jack Baron I would not touch this with a barge pole. I will send a message to Free Sporting Tips but I doubt if it will get through let alone be answered.

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