Ahhh ..... don't drink alcohol and bet, "the get out stakes" would contain a bigger percentage of booze related money than the earlier races.

Ho Ho,
Your so right Barny.

Much of your original post is relevant to poker also.
I play a lot of holdem and the moment I stray away from these principles, I lose.
Excellent post for those who take gambling seriously.

Hi Paul,
A question?

In the nature of Drawdown Would you agree that 85 - 95 % of the time the Bank would be below its Previous Peak and that 35 % of the time would be significantly lower (20 %).

Cheers
darky

Hi Darky,

Paul is off for a few days.

Essentially what you said there is in the ball park, and absolutely correct! The percentages will vary based on a method/system that one employs, but the premise is;

Most times your bank will be less then its best point, even if you are a winning punter.

The drawdown and ultimately the success of a method depends on a few things;

• The strike rate; the higher the strike rate the greater the chance that your deviation from your bank high will be smaller and easier to recover.

• Punter Risk Threshold; Our Axis program has a betting analysis module that flags the risk to the bank like max and average bank drawdown percentage and many other ways to see the risk involved with the method that one is testing. I have seen successful methods, ones that deliver profit at the end of the test have a max drawdown of over 100%, that means somewhere along the way the bank went bust! Or other times I have seen it at 80% drawdown, still something that is unacceptable to nearly all punters. Knowing the depth of the risk about your method is ESSENTIAL.

• Bet Size; Most of the times conventional software employ one-size-fits-all scenario, leaving punters unaware of the pitfalls along the punting timeline. One thing that one can do with our software is to adjust the bet size to suit the system, and re-test until the risk and reward is acceptable. This may also involve adjusting the bet size up to suit a system that under-utilises the methods performance to balance the reward vs risk scenario. Sometimes it will also mean that you discard a system because the balance is not found.

You have obviously been around a while to know all this anyway, but it is surprising the number of people with rose-colored glasses that put their failure down to bad luck or the forum curse rather then facing the realities of punting. Their misfortune is just the that, the reality of the punt, something that cannot be avoided. That doesn't mean that the drawdown can't be managed and a profit derived from the punt. It is one of the main differences between winning punters and loosing ones.

Just to illustrate some of the points I was making, here is the Favourites system breakdown.

Bets 2791 (3.5 years)
Wins 1296
strike rate 46.4%
level stake profit $137 (based on $1 bets with NSW/SP divs)

Based on this info one would just launch into it and ....
It will be OK ! As the Bet Analysis tells me that with flat bet of 1% of bank $100 ($1 bet size) has an Average draw-down of just 9% and Maximum draw-down of 24% over the sample. So that is a comfortable, no stress low risk betting scenario with nearly 5% POT.

Now lets look at some different scenarios using the same selections, divs and just changing the betting method using a Starting bank of just $100.
Note BR = Bank Risk

1. Level stakes of 1% on best bank. (variable increasing bet size) This produces double the profits $266 but the risk goes up. Avg BR is 10%, Max BR is 40%. That means along the way you are asked to trust the system while 40% of your bank dispersers. Would you continue? Its not a loaded question, if you can manage this then you can use this very profitable method.
2. Level Stakes of 1% on current bank. (variable bet size up and down) this also produces better profit of $205. Avg BR is 10% and Max BR is 42%. It looks like the dynamic of the system is not so kind to this betting method on this system.
3. Proportional constant stake to take out 1%. (variable bet size, based on the selection price) This method produces a measly $16 profit. So obviously it grossly under utilises the method! we need to increase the stake.
4. Proportional constant stake to take out 4%. (variable bet size, based on the selection price) This method produces a $200 profit. Simmilar to Bet scenario 2 but with Avg BR 11% and Max BR 33% it is far safer.
5. Proportional stake to take out 4% or current bank (variable bet size, based on bank and selection price) This produces $396 profit, the best so far BUT, with Avg BR of 13% and Max BR of 68%, would you have the determination to continue? Probably not so we need to see if a better balance can be struck with this betting method.
6. Reducing the above to 3% produces $224 profit with Max BR still at unacceptable 56%.
7. Reducing further down to 2% we make $184 with Avg BR 10% and Max BR 34%. Which is safe and sustainable, but not as profitable however it gives the flexibility of increasing bets when the profits are being made and reduces the bets in the lean period. Further tests will reveal the best take out percentage to use with this system.

I could go on, there are many other scenarios that I could test, however it just boils down to what risk you are willing to take on the way to making your profit. Having the ability to test and evaluate these risks BEFORE they happen will arm you with the right betting method to take the best advantage of the given system.

Looking at the system above, we know that the average risk is around 10% of your bank using any of the methods. The maximum risk to the bank varies, managing this risk in a way that is acceptable to you is THE ONLY WAY that you will actually reap the profits from this system. If you under utilise the system then you will walk away from it thinking that you can't make profits from favourites. If you over-extend your bank threshold and quit you will walk away knowing that you go broke backing faves.

The reality is that when utilised and managed correctly, there is good profits to be made here. It comes down to managing your bank draw-down risk correctly, that is after you have created a profitable system to start with.


Kind Regards

Unless you have a very good strike rate. If your strike rate is up at around 95%or higher then your mostly going to be at your best point most of the time.

A real life example . My bank has been at its highest 155 days out of the last 176 days (days so far this year). That's 88% of the time.

It all depends on your strike rate. Just think how much easier it is for me and how that effects my confidence and morale. I'm up on average almost 9 out of every 10 days.

Hi UB,

Just out of interest; Backing ? Laying ? Trading ?

Both Backing and Laying (no trading at all)

Thank you Michal.
My comfort level is 4% of original Bank of $10,000 betting to available price.

I would say to any budding Punter that if your uncomfortable with the size of your bet then pay close attention to what Michal has just outlined.

Cheers
darky