How To Manage Your Betting Bank Efficiently

I’ve been writing about and reviewing betting systems and strategies in a number of places, in a number of publications and on a number of websites, for probably a decade or more now and one of my biggest gripes has always been the bad advice that does the rounds about betting banks and staking plans.

You’ll know the sort of thing… always use a 20 point bank, or use a 50 point bank with a staking plan that attempts to claw back lost profits on the following bet, or worse, systems like the Martingale that double up each bet until you reach a winner. I’ve always been of the opinion that a system should be able to produce a profit to level stakes before you even think about applying some fancy staking plan to it, but even then I’ve got to say that I’m not exactly a big fan of staking plans at all.

The main reason for this is because 95%, if not more, of the commercial betting systems that are sold these days don’t adequately accomodate for the worst case scenario of losing runs.

To put this into perspective for you, please take a look at the chart below. What this will show you is the maximum number of losing bets you can realistically expect to see in a sequence, over the course of 1000 bets, according to the percentage chance of the horse winning…

Average Losing Streaks

Not pretty is it? Even at the bottom end of the odds range, looking at 1/1 chances, where the chance of winning is obviously 50%, you can expect at least one losing sequence of 10. Turn it up a notch and let’s say that the average odds of your selections is 4/1, then you can expect at least one losing run of 31. Or at 5/1, a run of 38. That’s 38 losers in a row backing horses that could easily be in the first three in the betting. Not many would believe it, but these are actually the true odds of it happening!

Of course, this is hypothetical in a way, because horse racing is a random sport and it’s unlikely that you’ll ever be backing at exactly 5/1, or in any other exact set odds range all the time. You’ll have a mix of 1/1 shots, 2/1 shots, 5/1 shots, and likely the odd outsider, all mixed up in the same system portfolio, so how do you manage this efficiently and still maintain your sanity when the inevitable losing runs do appear?

Well, many would say – and I’m not completely adverse to this – that level staking is the way to go. So you ensure that you have a suitable bank to accommodate the worst case scenario and then place a level stake bet on each of your selections, regardless of price. That’s all fine and well, but betting is as much about psychology as it is about money management and a much steadier way to approach it, especially when operating a system portfolio, is to stake according to the percentage chance of each horse winning.

This is the way I would do it:

  1. You set up a 100 point bank and use this same bank to manage ALL of your systems.
  2. For each selection you establish the longest likely losing run according to the odds available.
  3. The longest losing run is then multiplied by 2 and the bank is divided by the resultant figure.

I’ll give you a couple of examples to show you how it works…

In the case of an 1/1 shot where the true odds of it winning are 50%, your stake would be 100 (the bank) / 20 (the longest losing run multiplied by 2), which equates to a stake of 5 points.

For a horse with a 33.3% chance of winning, or 2/1 in bookmakers terms, your stake would be 100 (the bank) / 34 (the longest losing run multiplied by 2), which equates to a stake of 2.94 points.

And for a horse with a 11.1% chance of winning, or 8/1 in bookmakers terms, your stake would be 100 (the bank) / 118 (the longest losing run multiplied by 2), which equates to a stake of 0.85 points.

The reason I multiply the maximum anticipated losing run by two is simply to build in an additional safety net, because probabilities are just that – probabilities – and winning and losing runs can theoretically be infinite, so it’s always better to be safe rather than sorry.

Obviously when you’re researching systems and adding them to your portfolio you’ll be calculating everything to level stakes and as I said earlier, if you have the mental strength to deal with long losing periods and also the willpower to continually place the same stake on an 1/1 chance as you do on an outsider at 10/1 or 12/1, then good on you. The fact of the matter is that most of us don’t.

What I’m showing you here isn’t some wacky staking plan, nor is it guaranteed to increase your profits, but what it will do is let you ride the waves of winners and losers with consummate ease, without going on tilt and blowing your lot when a bad day occurs, so I’m sure for most that it’s a sensible strategy to employ.

To make things easier for you I’ve put together a simple little calculator that will let you play around with different scenarios and see how increasing and decreasing the number of bets in a sequence affects the maximum anticipated losing run and the stake you should be using to accommodate that…

[ Click Here To Download The Free Staking Calculator ]

It’s in OpenOffice format, which you can download completely free of charge, but if you have a reasonably recent version of Microsoft Excel installed on your computer I’m sure it will work fine with that too.

Comments

16 Responses to “How To Manage Your Betting Bank Efficiently”
  1. Bernard Gaughran says:

    Hi Paul,
    I currently use 2 lay bet systems in my portfolio. The first recommends to only back the selections if the Betfair odds are in the range 4.8 to 8.0. The second recommends to only back the selections if the Betfair odds are anything up to 11.5. Can you recommend the stakes I should use for both systems.

    Are you saying all systems should use the 100 point bank? So, in my case the 2 systems should ‘draw’ from the 100 point bank…as opposed to the 2 systems using 2 different betting banks?

    • Matt Bisogno says:

      That’s a great tool, Paul. Really easy to see what you should be betting if following that approach. And a very nice piece too. Top quality stuff!

      Bernard, I think it’s better if I let Paul reply to your questions.

      Matt

    • Paul says:

      I think the best way to look at laying systems is to consider them as backing systems in reverse, which is effectively what they are. So to calculate your stake all you would need to do is reverse the odds and that will show you the likelihood of the maximum number of losers you can expect. 1/1 bets are exactly the same – they’ve got a 50% chance – 2/1 would be reverted to 1/2, 3/1 to 1/3 and so on.

      None of this is an exact science though, so I wouldn’t be too concerned about getting into the fractions too much. Even if you’re level staking what I posted should be useful to you, because if you have a system where the odds range from 4.8 to 8.0 and you know from past results that the average odds are 6.0 then when backing you’ll know that the worst case scenario should be a run of 38 and when laying then the maximum you should expect to have to cope with is a losing run of 4.

      As for banks, I’ve never operated with multiple banks, because I flip between betting exchanges and bookmakers all the time in an effort to get the best odds, so to manage multiple banks would just – in my opinion at least – be an admin nightmare and not the best use of my time. I’d be comfortable operating multiple systems with a 100 point bank using the method I posted here.

      I’ll try to write some more about this in future and will likely put together some other little tools for you to use. At the very least I think it should help with your research.

      ~ Paul

  2. Roderick Bridger says:

    Hi Paul,
    The losing streaks are based on actual odds, but, hopefully, most value punters are betting on their selection because they believe the odds they are getting are longer than they should be.
    Assuming we can find a reliable forecast, to maximise profits, should we be using our odds to decide the bet or the actual odds.
    All the best, Rod.

    • Paul says:

      Hi Rod,

      You’re absolutely right. What I’m talking about here is basically like a coin toss. It’s straight down the line probabilities, but it doesn’t take into account that if you come up with a system that produces a profit, then you’re betting over the odds and therefore you’ve got an edge at the true odds.

      On the whole, I’d be tempted to say that you should always err on the side of caution. However, that said, if you’re a good judge and you think a 12/1 chance should really be 5/1, or a 4/1 chance should be 2/1, then it would be folly not to bet it accordingly.

      I’m going to write another article soon as a follow-up to this one which will get into the concept of value. To start with I really wanted to explain about the probabilities though as those are quite factual, whereas the concept of value is open to intepretation and misintepretation, so I felt it was a good move to do the groundwork first.

      Hope that makes sense… it’s getting late now 🙂

      ~ Paul

  3. Roderick Bridger says:

    Hi Paul
    With the possiblities opened up by this site it’s easy to get so buzzzzzed you forget the time.

    I’ve just had a look at the Adrian Massey site – looks brilliant.
    Assuming the stats are accurate (why wouldn’t they be!?) the ratings would be a fantastic starting place for a Betting Forecast as well as future systems.
    These are the overall stats for Clear top, second top and third top rated selections.

    Rank Bets Win Place Return Win Place

    First 89797 26% 53% 105% 103%

    Second 87134 18% 44% 96% 97%

    Third 85630 14% 37% 90% 92%

    If these stats are correct it’s quite an achievement to make a profit from ALL clear top rated selections regardless of any other selection criteria.
    Rod

    • Paul says:

      I’ll be perfectly honest with you…. I haven’t done nearly as much research into Massey’s ratings as I probably should have Rod. I used it for lots of things a couple of years ago, and for some time before that, but then I had a few family things to deal with and it all kind of fell by the wayside.

      I think it’s quickly becoming evident that a lot of very good ideas are going to come out of this now though, even if the site is only a couple of days old. Matt and I are buzzed about it too.

      Great to have you onboard!

      ~ Paul

    • Anthony says:

      My experience is that the return on Adrian Massey’s clear top rated selections has reduced significant over the last several years as people have jumped on the bandwagon and the value has disappeared because the top rated horses have been over-bet. The figures you quote go back earlier than 2004 when the ratings were more profitable. Here are the figures from his custom report generator which show a £5.90 loss per £100 staked from 2004 to date.

      Bets Wins Win Strike Rate Win % Return at SP
      51455 12569 24.4% 94.1%

      That said, it’s still a great resource and I do admire Adrian and his efforts for charity.

      Anthony

      • Roderick Bridger says:

        Hi Anthony
        Thanks for the update.
        If the ratings are as good as in the past and the Top Rating is being backed down, is there a better return for the second and third top ratings?
        It would be interesting to see the ratings made into a Betting Forecast and the returns on the top 3 or 4 when bet over or under the forecast price.
        Rod

  4. Toby Drysdale says:

    Nice tool Paul. For those wanting to keep track of their bets, whether it’s tracking a system or your day to day betting – you can download the Bet Tracker we have just published on Bettrick sister site Betcritique. Now it’s normally for members only, but the link is here

    http://www.betcritique.org/docs/Betcritique-Betting-Tracker-1.2.xls

    I know a few of you signed up to the Bettrick site to use the calculators – thank you – hope they are of use to you. If any of you want to sign up to either site, it would be appreciated (and it’s free) but entirely up to you. Hope some of you find it useful 🙂

    Toby

  5. Toby Drysdale says:

    http://www.betcritique.org/docs/Betcritique-Betting-Tracker-1.2.xls

    Helps if I put the correct link in 🙂

    Done in Excel, but will also work in Open Office

  6. Toby Drysdale says:

    No problems Matt. We are hoping to get this online as well at some stage, but we’ve got Chris (our programming monkey) busy with a couple of other projects which will keep him busy for the next 6-8 months LOL

  7. brendan kelly says:

    Hi Paul, I downloaded the staking calculator but I find it doesn’t work. Maybe I’m doing something wrong myself but when I enter my own odds no other figures change. I am using excel 07.You might tell me what I need to do to operate it. Thanks

    • Matt Bisogno says:

      Hi Brendan

      This file is designed to work with Open Office, not Microsoft Excel.

      That said, it worked with Excel 93, but is not working with my own 07 version either.

      You can download Open Office here: http://download.openoffice.org/

      Matt

      ps when you download Open Office, note that you’ll also need to save the document as something, because by default it’s read only.

  8. brendan kelly says:

    Thank you Matt. Got it done ok.

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