Ever wondered how some people can make a fortune from betting on horse racing while everybody else struggles to make a small profit?
It’s the age-old horse racing conundrum.
We’ve all heard the stories of bettors and teams that make millions from betting on horses.
What do they have that you don’t.
You may be thinking they have advanced teams and analysis.
You may be thinking they’ve got inside connections.
And both of those things are probably true.
But they’re not the real reason that they succeed where others fail.
The real reason is mindset.
Their mindset is different because they have money.
In the next few minutes I’m going to show you why your mindset is broken, and how you can fix it.
My inspiration for writing this post came while I was building out a new strategy.
I’ve been looking to create something that has a high strike rate, makes a good return on investment and has around two or three bets a day.
I know there’s a lot of interest in accumulators, Lucky 13’s, loss-recovery and other exotic bets at the moment.
The problem with them is that, generally, they’re not good for the punter. They take short odds horses and turn them into long-shot chances.
But as I get asked about them on a daily basis, I thought it was time I sat down to dig into them.
In order to make them work for most bettors, you need a high strike rate.
That was my starting point.
The strategy that I came up with finds an average of two selections a day and wins 43% of the time.
With a 9% advantage and an 11% return on investment since 2019, it’s a solid method.
But that’s betting horses to win.
The best way to stake them is using proportional stakes, calculating a 1.5% edge on the selections. This would have increased the bankroll 109% since 2019.
Pretty good, and I’m going to come back to that later.
However, I’m trying to find a way to use these selections in more exotic bets.
Even though a 43% strike rate sounds good, it still means losing streaks of nine are likely to be common on a month to month basis, and long-term it could hit losing streaks of fourteen.
The chance of winning two bets back-to-back is just 18%.
Would the profit be more betting on a two horse accumulator?
If we can average odds of higher than 5.55 for the forecast, then potentially the profit could be higher. But we’d expect to having losing streaks of 28 on a month-to-month basis and as many as 52 in the long-term.
That’s a lot of losing bets in a row to be comfortable with.
So I changed my tack.
LOSS RECOVERY STAKING
I don’t advocate using loss recovery staking. It creates a huge risk of losing your entire bankroll.
But, when I’m experimenting, there’s nothing off bounds. So I started digging into it.
I managed to get the result to grow a bankroll to 1156 profit using loss recovery.
If you’re marketing something, that sounds great.
Reality is a bit different though.
When you use loss recovery there are drops of over 200 units, compared to 20 units on the proportional staking.
And that got me to thinking…
WHY DO BETTORS LIKE LOSS RECOVERY?
Answering this question allows us to solve the problem of why some bettors make a lot of profit from their betting while most don’t (assuming that both are using profitable strategies).
Looking at the example above, which is a real example of a strategy I use, at face value it may seem that the loss recovery option is better. After all, it’s generated over 1000 units profit in around eighteen months.
But profit alone doesn’t paint the full picture!
In order to generate that profit we’ve had to significantly increase the risk of losing our bankroll, and we’ve had to increase the bankroll significantly.
Whilst the biggest drawdown is around 250 units, we’d need to be prepared for much more than that, which means you’d probably need a bankroll of around 1000 units to start.
When you look at it like that it’s not so impressive.
So let’s go back to the original proportional staking method, the one that has increased the bankroll by 109% in eighteen months.
If you had £50,000 to invest and you made £54,500 profit over that time, or £3027 per month on average, I’m sure you’d be pretty happy.
I know I would.
But if you had £100 to invest and you’d made £109 profit over the same timeframe, or £6.05 per month then I guess you’d be less impressed.
Making £6.05 per month isn’t exactly a great sell for a selection process!
However, the return is the same in both examples. All that is different is the amount of money invested.
Those bettors with very large bankrolls have a completely different mindset to those with small bankrolls.
And that difference is what keeps most bettors losing.
Large bankroll bettors look at doubling their money every eighteen months as an excellent return.
Small bankroll bettors are trying to double their money every three months, one month or even every week!
That’s nearly impossible to do regularly over an extended period of time.
A small bankroll is commonly confused for selections that are bad, when actually they’re very good, there’s just not enough money available to bet on them to make a return that’s considered worthwhile.
By mistakenly thinking the selections are bad, bettors move from approach to approach always comparing themselves with the bettors that are making thousands of pounds in profit a month, but forgetting that they should also be considering how much those bettors are staking.
In the desperation to turn a small bankroll into a large bankroll quickly, loss recovery staking is used, but it’s used without the right sized bankroll.
As I’ve demonstrated above, you’d actually need a bankroll of about a thousand units to have any kind of safety net using loss recovery on selections that win 43% of the time. But most horse racing fans would use no more than 250 units, and possibly just 50 or 100 units.
The only thing that can result is that the bankroll will eventually be lost entirely.
You may get lucky and make good profits first, or you may lose it immediately. But it’s a mathematical certainty that at some point you will lose it.
The number of units made isn’t important, the growth of your bankroll is the most important because that’s what determines the size of your stakes. The bigger your stakes the bigger your payday!
FIXING WHAT’S BROKEN
Now that we’ve realised the reason we’re not making the profits we want not because of the strategy, but because we don’t have enough to invest, the question is how do we change this?
We have to be patient. We have to be prepared to grow our bankroll.
If you started with £1000 and doubled it every eighteen months, it would take you four years before you had a bankroll of £16,000 and could expect to make an average profit of £1333.
The truth is, not many bettors have the patience to wait four years to be able to make £1333 every month. Would you?