Formula for POT

[hermes]

I lifted this from a turf website and reduced it to point form.

Formula:

P = A x (B - C)

P = Long term POT
A = Long term strike average
B = Long term average dividend
C = Long term average bet.

To turn losses into profits or to increase profits there are only four possible strategies:

1. Raise the long term strike rate.
2. Increase the long term average dividend.
3. Increase the average win bet size.
4. Decrease the average loss bet size.

Does this overlook anything? It seems to me that it puts the task at hand succintly. Every punter and plan on these pages is grappling with this formula and searching for ways to do one or more of points 1. to 4. Typically, my strategy is to try to increase strike rate (without upsetting dividend). Probably the least effective of the possible approaches.

Perhaps this formula is common knowledge. New discovery for me and provides some clarity, so I thought it might be useful.

Hermes

PS: Where does Burt's scheme fail by this formula?

[Placegetter]

Hermes,

Bert's system falls down on point 4 in my opinion, as does any loss chasing plan.

My own strategy for increasing profits has been to work on point 2, coupled with a staking plan around point 3. The more you bet the more you win, but it depends on who's money you are betting.

Placegetter

[becareful]

Hermes,

I don't think that is quite correct - I think it should be:

P = ((A x B) - 1) x C

This gives you the average profit PER BET. So if A= 40%, B=$2.70 and C=$10 then

P = ((.4 * 2.7) - 1) * 10 = $0.80


I prefer the following formula to give you average weekly profit:

P = ((A x B) - 1) x C x D

P = Ave. Weekly Profit
A = Long term strike rate in dec. form (35% = .35)
B = Long term ave div
C = Average Bet size
D = Ave no bets per week

A couple of examples might help.

Lets say strike rate of 40%, Ave div = 2.70, Bet size = $10 and 10 bets per week.

Ave Profit = ((.4 * 2.7) - 1) * 10 * 10 = $8

Now if you can maintain the strike rate but increase your ave div to $3 then you get:

Ave Profit = ((.4 * 3)-1) * 10 * 10 = $20

Now suppose you want an ave income of $100 per week - you can get this by either increasing the number of bets per week OR the average bet size - eg. if you can do 20 bets per week and increase bet size to $25 then you get

Ave Profit = ((.4 * 3) - 1) * 25 * 20 = $100

To turn losses into profits you MUST work on part A or B (ie. strike rate and average dividend). If you have a profitable system then you can increase profits by changing C or D (ie. Bet size and number of bets). There is NO WAY you can make an unprofitably system profitable in the LONG RUN just by changing the bet size or number of bets.

Of course the trick here is you must be careful when increasing bets or bet size that you don't decrease the strike rate or ave div otherwise your profit may go the wrong way.

You asked where Berts scheme fails by this formula. By his own admition his strike rate and ave. div multiplied is less than one. So in the above formula the (A*B)-1 would then be negative (lets say A*B is 0.95). If his ave bet size is $5 and bets per week is 100 then we get:

P = (0.95 - 1) * 5 * 100 = -$25

So IN THE LONG RUN the system would lose $25 per week (this is just hypothetical - you would need to go back through all his spreadsheets and work out the values for A, B, C and D to get the correct figure).

You may have seen in another post of mine that one of the dangers of loss chasing staking schemes is that they can "hide" losses in rare events. Berts system is a perfect example of that - 99% of the time his system will make a profit so if you don't look at the underlying maths and probability you can believe that the system will be profitable in the long run. The problem is when you hit that 1% event and have a losing day you end up losing more than you have made in the last 6 months.

This is why you should ALWAYS evaluate any system based on level stakes first - if it makes a profit at level stakes THEN you can start playing around with the bet size (ie. staking plans) to give higher dollar profits. If you look at Berts system in this way it is obvious that it will lose in the long run.

As always if you have any questions I will be happy to try to answer them.

By his own admition his strike
rate and ave. div multiplied is less than one.
=====
That's NOT right , be careful, I only admit to the strike rate not making a level stake profit.
everything else is good.
regards bert

[becareful]

Bert,

By definition if Strike Rate * Ave Div is greater than 1 then you are making a profit at level stakes. If you make a loss with level stakes then Strike Rate * Ave Div is less than 1.