Punt to Win
What is a Safe Betting Bank?
Let us give an answer by looking at the bank size needed when playing blackjack and card counting.
When the card count is positive - there are considerably more high cards than low cards remaining to be played, the player has slightly better than a 50% chance of winning each hand played.
You would think a maximum, non-reducing bet of 1% would be safe. Yet despite having an advantage with every hand played, only having to beat the dealer's hand, and not another 10 or so horses, there is a very realistic, mathematical chance, around 3%, of losing 100 maximum betting units. That is, losing your entire bank.
If the maximum bet is 2% non-reducing, the chances of losing the entire bank at some stage increase to 10%. Of course, in both these examples, the chances of losing 50% of the bank are substantially higher.
1. The majority of horses backed do not have a better than 50% chance of winning the race.
2. There will be substantially increased losing runs compared to playing blackjack.
Now we can see why many punters who otherwise are disciplined, lose at horse racing. They are undercapitalised in relation to bet size. The selections they use may be fine but as soon as a normal, statistical, losing run occurs they see their bank rapidly disappearing and assume the selections are no good.
Some years ago I saw a successful punter go through a horror run with very strong selections - only three wins from over 50 bets. These were not horses at double figure odds - they can have even bigger losing runs. These were horses that usually had a 33% to 50% chance of winning each race. Many of them were heavily plunged in the betting ring as well.
There was nothing wrong with the selections or the prices obtained. But there was a lot of bad luck in running - horses getting held up for a run, being trapped wide, getting injured or being headed on the line. Then there were the poor rides by normally reliable jockeys. Of course there were also inexplicable form reversals - racehorses are equine athletes, not machines and do have off days like human athletes. Just as human athletes get injured you can guarantee when you are having a bad run you'll be backing horses that pull up lame. That's racing.
Because this punter was betting a very small percentage of his bank the bad run was irrelevant. Betting 2% non-reducing, he would have been wiped out. Betting 1% non-reducing, he would have been extremely uncomfortable.
A worthwhile betting/staking method to consider is backing your strongest selections with a maximum 1% of your current bank. (If possible use an even smaller percentage. Lower strike rate selections should also have a smaller percentage of your bank bet on them or alternatively use a separate bank for them.)
After each bet on your strongest selections you keep the stake at 1%.
If you were using a $10,000 bank and your first bet was a winner at $11.00 your bank would now be $11,000. Your next bet would be $110. Should your next $110 bet lose your bank has been reduced to $10,890, so staking 1% your next bet would be $109. For practical purposes you might round up or down the bet size to the nearest five dollars.
The advantage of a staking method like this is that you do not lose your profits faster than it took to get them.
Most punters who operate with betting banks, should they be fortunate enough to make profits, then lose those profits quicker than they got them when a bad run hits.
That is because they made their profits on a good run with smaller, increasing bets as their bank increased but when the bad run hits they lose their profits (and their confidence) with their biggest bets. They increased the bet size as the profits increased, but never adjusted the bet size downwards as losses started to mount.
Even worse, plenty of punters then become emotional and undisciplined. A common ploy is to increase bet sizes on a losing run because that winner "must be due". It doesn't work that way.
This edition of Punt to Win:
2005 Melbourne Cup Carnival Winners
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