We all know what it’s like to win and of course, we all know what it’s like to lose! But what about stake sizes?
The latter is one of the hardest things to come to terms with when betting on the horses and the most commonly heard complaint is that “the jockey put in a very poor ride“.
I still blame the jockey to an extent even now, and I’ve managed to remove all emotions from my betting. It’s human nature that when things aren’t going to plan we need to shift the blame.
When I started out betting on the horses I only used the Postdata section of the Racing Post. When it won I was a genius, and when it lost it was the fault of “that bloody newspaper!”
Accepting losing streaks was going to be a part of my life was the hardest part of turning into a full-time professional with my betting. It’s a classic punters dilemma that when we’re losing we don’t want it to be our fault. We want it to be the fault of the sources or methods we’re utilising. Realising that there are so many variables when selecting your winners that when you get it right those variables have been relevant but when it loses they haven’t. To make things harder no one will ever know which variables are relevant before the race!
Of course there is good news, if you choose the correct betting bank you’ll ride out the losing runs and still have money to bet the winning ones!
Different pros have different ways of calculating the size of their bankroll but below is the approach that I personally use.
Let’s assume that I’ve developed a new method/approach to selecting my bets. I paper trade them until I have 100 results and they’re showing a profit. Now I can work out my strike rate. For example let’s say that I’ve had 20 winners from those 100 bets, a 20% strike rate.
If we place the below calculation into an excel table we will arrive at our expected losing run:
We use the LOG formula twice. The first LOG contains the amount of bets we have paper traded after it in brackets. Then the second LOG, which is a negative, we put in 1 minus our winning probability.
Probability is very simply to calculate, if you have a 30% strike rate then your probability of winning is 0.30. If you have s 25% strike rate then your probability of winning is 0.25. In our example we have a strike rate of 20% and so our probability is 0.20. This means we put in 1-0.20 in the brackets after the second LOG.
The result of this formula is 20.63 and this means that over 100 bets we can expect to have a losing run of 21.
The idea behind this formula is that if you were to have £20 in your pocket and bet £1 per selection on your new system and hit the losing streak straight away your betting bank would be wiped out.
What I do is multiply my betting bank by 3. So in the case having a 20% strike rate on any given angle I would start with a betting bank of 60 points. For example if I were to have £600 to start I would then bet £10 per point. If I hit the losing streak straight away I would still have two thirds of my betting bank left to then inevitably hit a winning streak.
Have a look at some of your systems or approaches and work out if you’re using the correct stakes to ensure the safety of your bank.