One of the biggest mistakes punters make when looking to make a long term profit is not establishing a betting bank with an effective staking plan.
A betting bank is simply a pool of money that you put aside and ring fence just for your betting activities. You keep this money completely separate from your own finances.
The betting bank should only ever be what you can afford to lose in any given period of time. For some this may be £10 and for other is maybe £10,000, regardless of the size of the betting bank the principals of setting it up and managing it should be the same.
To effectively manage your betting bank it is essential you keep accurate record of what bets you have, not just the amount but also the type of bet, the type of system or rating the horse had, the type of race, class of race, distance of races, going for the races. In fact as much information as you can record the better your ability will be to use this information to increase profits over time.
The next key thing to understand is what form of staking plan you may wish to employ. If you Google betting banks and staking plans you will find a wide variety of staking plans. In my opinion the ones to definitely avoid are any that include an element of lose recovery. Loss recover system are basically when you lose on one horse re stake more on the next or next series of horse to try and recoup the loss. Many racing systems are sold on the you can’t lose basis and these usually have some element of lose recovery element. I guess it is true that if you have enough money and hold you nerve eventually you will at least be in a position where you have not lost money.
I believe the correct way to devise a good staking plan is to understand how successfully you are going to be when making selections, or better still how many consecutive losing horses you are likely to pick.
Again it may be strange to think about losing when you aim is to win and make money, but bear with me and I will explain.
If your average strike rate is picking one winner out of every 20 horses you back, you might think it is a good idea to have a staking plan that would allow for 21 bets, but is that the worst case scenario, what if you had a really bad run maybe this strike rate would go out to 1 win in 60!
Establish your strike rate when you are starting out can be very difficult and probably the best way to do this is only bet on paper, i.e., do not stake any real money until you understand how well you are doing. If you are following someone else’s tips then they will often know their own strike rate and average price for a wining selection. I will return to this element shortly.
For example recent stats from one of the UK top tipster “Pricewise” show 288 wining selections from 2169 bets, giving a strike rate of approximately 15%, so using this example you should expect to select at least 7 losing bets before you get a winner. However anyone who has tossed a coin knows although when tossing the coin 6 times you would expect 3 heads and 3 tails it is possible to get 6 heads or 6 tails. Backing horses is just the same so even if you know you strike rate I would suggest trebling your bank to at least 3 time you strike rate to start out with.
Let me give you a worked example using following Pricewise, we now know that it is likely we are going to back 7 losing horses in a row, so we treble this to 21, we can afford to set aside £500 exclusively for our betting bank, so each bet we should pace should be no more than £500/21 = £23.80 for safety. I personally would round this down to £20 for each bet to start with.
As you betting bank grows bigger you might like to increase the actual physical amount you bet on each horse but it should still be worked out by dividing the amount in your betting bank by three times you strike rate.
I said I would revisit the effect of odds, the odds of winning selections are very important, if the above example the average odds we were backing wining horses at what 5-1 but I strike rate was 7-1, we can instantly see however good our staking plan and size of our betting bank we will eventually go bust.
If on the other hand our average wining price was 14-1 and our strike rate was 7-1 then happy days, we could also considering altering our staking plan.
Personally I would still start with the staking plan outlined above until I was truly sure of the numbers and what type and condition of betting events were delivering these numbers on a consistent basis.