Strike rates, runs of outs and banks
 

Here's one for the mathematically sound -

How do you calculate what's a safe % of your bank to outlay on a system, given it's strike rate, in order to survive any reasonably forseeable run of outs?

Examples:

System A has a 22% s/r, ave div $4.80. What's the % of bank you should outlay and be safe?

System B has a 6% strike rate, ave div $17.20. What's the % of it you should outlay and be safe?

Obviously the % outlay would be less for Sys B than A because it will have longer runs of outs, but how do you calculate it?

Mr Duritz
 

Try this for size.
http://www.online-betting-guide.co..../stake-calc.php

Thanks but that's based around dutch betting, ie having more on the greater the value. What I'm talking about is what is your safe level to be staking given the criteria above, not how much should you have on given the level of overs.

Duritz,

I'd sack both systems as they are almost profitless. The difference between the regarding profit is almost nil.

Working out runs of outs [or ins for that matter] is best understood by understanding the odds for various lengths of repeatability. There is no definitive' exact run of outs for a certain odds. The simple maths of the odds of a coin landing heads twice in a row is a great example in understand the odds of any number of outs [or ins] you like, happening:

The probability of the coin landing head up is 50% and that of tail up is 50%. So if we choose head up and then find that it lands head up twice in a row, this is 50% for the first toss then 50% for the second, so the cumulative odds are 50% of 50%, or 25% (4:1). For further cumulative odds just multiply the odds expected at each stage, so for 8 head up lands for 8 throws we have a probability of 50% * 50% * 50% * 50% * 50% * 50% * 50% * 50% = 0.39% (256:1).

Cheers.

Guess it also depends on what kind of staking strategy you will be implementing.

I've never pretended to be mathematically sound but I'll do what I always do and throw computing power at it until it cracks under the strain.
I wrote a program that used random number generation to return a win according to the percentages you defined, then when a win was encountered paid out the dividend you suggested. I invoked this randomness not once, not twice, not ten times, not..., well a million times actually. And over a series of a million $1 bets I got the following results.

22% strike rate, $4.80 divvy, Profit $56,624, Worst run $294.40
Second time I tried it I got $58814 profit (see Crash, there's nothing wrong with the system if you show a little persistence) and had a worst run of $304.20
If I'm betting a dollar and the worst monetary loss I got at any point was about $300 in a million bet run I suggest a three hundredth of your bank is a safeish amount to bet.

On the other figures I got:

6% strike rate, $17.20 divvy, Profit $26668, Worst run $1369.60
Second time through $36816 profit, worst run $1710.60
Better not stake this one too aggressively.

I'm not entirely happy with the results as all the dividends are the same size which could cause some minor differences. So since you didn't give us a figure governing the variability of the dividends I'm now trialling a new approach involving 1,000,000 worker ants with different sized grains of sand on their backs running against each other up a variable slope. Unfortunately getting results depends on me weighing the resulting piles of sand on the kitchen scales and negotiations with the misses have fallen over on that front. Therefore until I mow the lawn and take the garbage out I can't give you the definitive answer and can only advise caution with staking your new systems.

Best of luck,

KV

Crash, I accept that its 256-1 to throw heads (or tales) 8 times in a row but what confuses me is that each throw even after 7 wins is still 50% isn't it?

On the question of profitabilty seems that many "pros." are working on a POT of 5% or even less what do you reckon to that?

Hi partypooper,

I know a few pros, not many, but a couple of high rollers.

Each has a vastly different method.

While not divulging exactly what they do, they were prepared to tell me how they do it.

Punter 1

He goes to trackwork, every trial in his home State, knows most of the jockey and trainers by first name and has absolutely no inside information, he just assesses good horses and has selective big bets. Maybe 5 on a weekend.
His POT is very high, because his range is 5/1 to 20/1. But it can be a long time between good collects. His $ return is good because he bets big.

Punter 2

He works on 5 to 10% POT, and his bets are usually under 5/1. He knows nothing about horses really, and wouldn't recognize Gai Waterhouse or John Hawkes if he fell over them. He simply works out the horses likely to win under 5/1 based on statistics. His $ return is small, but he has a lot of smaller bets. (smaller in comparison with Punter 1, huge in comparison with me.)
He is happy to have a regular stream of income from racing, without taking the track home.

I don't think he ever takes odds on, his range is 1/1 to 5/1.

Both would not divulge exactly how they formulate their bets, but were happy to talk to me for quite some time about my theories as well.

Punter 2 ran my theories over his database and was gob smacked.

Needless to say he bought me a few beers, but that was it ;-(

P.S. My theories relate to Geldings, final sectionals and days since last start.

KV thanks for that informative and funny post. That was the kind of stats I was looking for.

Crash the examples were theoretical.

BJ the staking plan would just be level stakes.

Pretty much what I am trying to ascertain is what is a safe level to bet at, given strike rates, so that anticapated runs of outs can be safely negotiated. It is runs of outs that are the problem, not runs of ins. I want to be able to survive a bad run and still be there to take advantage of the good runs.

Your spot-on Party, regardless of the amount of throws, each throw has a 50% chance if it is the first or 50th. or millionth. I was demonstrating the cumulative odds and chose 8 throws because it is often used as the number of 'expected run of outs' for evens odds. Very few punters understand exactly what 'expected run of outs' mean [mostly nonsense]. Being able to work out the odds for any number of outs puts it in perspective and has meaning that we can relate too. A 256/1 chance of 8 outs in a row has meaning, '8 expected run of outs' has none.

Regarding your second question one must ask 5% of what? On an investment of $500 a week in bets it wouldn't pay my internet and electricity bill for that period, let alone provide profit. 5% on $100,000 ? Yes please.

That's the problem for us poor ************s on the bottom of the food chain. 'Bet 2% of Bank and be happy with 5% profit' is the maxim we have shoved down our gobs. That means for most of us - if we are successful, a free pie and soft drink a week:-)

I'm amazed that no one here has supplied the one and only correct solution.

The Kelly Criterion says Edge/Odds.

If you believe in the long-term consistency of the systems:

System A: Edge=5.6%

Stake = 1.47% (=5.6/3.8%)

System B: Edge=3.2%

Stake = 0.1975%

Hi Duritz,

I'm glad you've raised this type of question as it's something that has bothered me for the last couple of months. In my mind, the first thing you need to do is determine the expected lengths of losing streaks. For this, I've been using a program I found a while ago online called Risk of Ruin. It's pretty simple. You enter your strike rate, length of trials to run it over, and the minimum and maximum number of length of outs to test for, and it estimates for you the probability of the specified number of outs. After looking over the results, you decide on what the best guestimate is for the longest number of outs is.

For instance, in a test over 10,000 trials System A, with a strike rate of 22%, has a 45% probability of having a maximum losing streak of 33 outs. In a test over 10,000 trials System B, with a strike rate of 6%, has a 40% probability of having a maximum losing streak of 114 outs.

To make things difficult though, there's nothing saying that you could have a run of 114 outs, have a small win, followed by another run of say 96 outs! With these lengthy runs of outs possible, it would obviously be foolish to be betting say 5% of the bank as the standard bet size.

As far as staking goes, you obviously need to devise a plan that can sustain these lengthy losing streaks. I like the idea of betting a % of the bank, for instance 1%, so if starting with a bank of $1,000, then you would bet $10 on each qualifying selection. I stick with that $10 bet size for the week (I only bet Saturdays anyway), and revise the bet size based on where my bank stands at the start of the new week. Theoretically, this should help preserve the bank for quite a while in the case of an extended losing streak. For instance, if one had a bank of $1,000, had a 1% bet size, had an average of 10 bets a week and lost 10% of their bank every week during an extended losing streak, here's how the weekly tallies would go:

Starting bank = $1,000
Week 1 = $900 / Week 2 = $810 / Week 3 = $729 / Week 4 = $656 / Week 5 = $590.49 / Week 6 = $535.44 / Week 7 = $478.30 / Week 8 = $430.37 / Week 9 = $387.42 / Week 10 = $348.68 / Week 11 = $313.81 / Week 12 = $282.43 / Week 13 = $254.19 / etc. By this time, the bank has likely endured the longest probable run of outs.

So theoretically, this 1% bet size (amount revised weekly), could sustain System B's initial maximum # of outs, it's just a matter what happens after that. Is it followed by another long run of outs?

Honestly Duritz, as Crash suggests neither System A nor System B seem very strong. System A has a decent stike rate, but it's average return is quite low. Maybe it could be improved by shopping around for better prices, but I suspect it would still be too low. And System B's strike rate is just too low, I would doubt many punters would have the guts to continue betting into a losing streak of over 100 outs. I'm glad you mentioned these systems were just theoretical.

Hopefully, I've been of some help to you. I think you're on the right track in using % of bank to determine betting size. You just need to find a system that has System A's strike rate combined with System B's average dividend (easier said than done).

In case it's of any benefit to you (and honestly to brag a little too), here's how I bet my system:

Strike rate = 23.5%, Average Div. = $7.81
With this strike rate, I can expect my longest losing streak to be roughly 32 in a test over 10,000 races. Decided on a 2% bet size.
My starting bank was $1,000.
Week 1 = Bet size $20, 11 bets for 2 wins returning $37.96 = $539.20 profit, so closing bank = $1,539.20
Week 2 = Bet size $31, 7 bets for 2 wins returning $11.32 = $133.92 profit, so closing bank = $1,673.12
Week 3 = Bet size $33, 17 bets for 5 wins returning $32.93 = $525.69 profit, so closing bank = $2,198.81
Week 4 = Bet size $44, 15 bets for 5 wins returning $48.58 = $1,477.52 profit, so closing bank+ $3,676.33
Week 5 = Bet size $74, 6 bets for 0 wins returning $0.00 = $444 loss, so closing bank = $3,232.33
Week 6 = Bet size $65, 10 bets for 2 wins returning $9.08 = $59.80 loss, so closing bank = $3,172.53
Week 7 = Bet size $63, 13 bets for 5 wins returning $31.20 = $1,146.60 profit, so closing bank = $4,319.13
Week 8 = Bet size $86, 10 bets for 3 wins returning $19.34 = $803.24 profit, so closing bank = $5,122.37
Week 9 = Bet size $102, 12 bets for 2 wins returning $11.91 = $9.18 loss, so closing bank = $5,113.19
Week 10 = Bet size $102, 10 bets for 2 wins returning $26.76 = $1,709.52 profit, so closing bank = $6,822.71
Week 11 = Bet size $136, 16 bets for 3 wins returning $19.78 = $514.08 profit, so closing bank = $7,336.79
Week 12 = Bet size $147, 22 bets for 4 wins returning $24.54 = $373.38 profit, so closing bank = $7,710.17

So after 12 weeks, using a 2% staking plan, my system has experienced an average weekly increase of roughly 18%. The winning horses paid between $4 and $32 for the win. My longest run of outs spread over numerous weeks was 15. I also had 1 run of 10 outs and 2 runs of 8 outs. So far though, these losing streaks haven't seemed to have damaged my bank too much. Fingers crossed my luck continues.

Best of luck to ya Duritz. Hope you find a winner or two.

This has nothing to do with staking but a simple method I sometimes use to control a string of outs. It is used with an automated program when betting on every race.

The idea is to keep betting when you are winning and stop betting as soon as you come up with a loss until such time as another win is detected.

Here is an example:

Win keep betting
Win keep betting
Lose Lost bet (stop betting)
Lose no bet
Lose no bet
Lose no bet
Lose no bet
Win no bet (resume betting next race.)
Win keep betting
etc etc.

It can turn a losing day into a winning day, but it can also be disastrous when there is alternate wins and losses.

I should mention that the program continues making selections and calculating bets even though it may not be making bets

First of all you have to have total confidence that your system is profitable and will hold up in the long term, only you can determine that. Research, a database and filters are all needed to be kept.

If your system is profitable any sensible staking plan will suffice.

Personally though, I am a big advocate of silver and sands system too, 1% of the back then recalculating it each week or month, not after each bet. The account grows as the winners come in, but is also protected as the losing streak kicks in. Hypothetically using this simple staking plan, you can NEVER do the lot.

I am amazed how people sometimes well and truly complicate simple things.

BTW, silver and sand. After 52 weeks, you'll have $5,800,000. Let me know in about 10-20 weeks when you are banned from betting, or if your bets are capped. Personally interested as I am not far away if my systems hold up over the next few months...

BECAREFUL ???
 

Was it BECAREFUL who used to use the KELLY criteria?

Cheers.
darky.

Hi JFC, long time no see[?]

Oh boy. not the Kelly again. Edge = overlay. Must know what the [true]overlay is to use this very aggressive staking plan, True overlay in sports betting? How long is a piece of string?

Rather than anyone suffering this Kelly nonsense championed by someone who never uses it by his own omission [JFC], here is a forum thread on this rubbish before you get sucked in:-)

http://forums.ozmium.com.au/showthr...highlight=kelly

This seems to be the trouble with all the statistics based answers I've ever seen to this question. I know enough basic statistics myself to be able to work out the theoretical maximum number of outs (as per above) but as you point out that figure isn't a great deal of use. Possibly a deeper knowledge of stats would give a value to the worse loosing streak which is the important thing here. The worst loosing streak (as I see it) is the greatest amount of money lost from your bank at any time. So if you start with $1000, build to $1200, then at some point get down to $800 before rising again to $1300 your worst losing streak is $400 (1200 - 800). If you are betting a percentage of bank you must assume this worst run could happen at the start of betting and not after you have some winnings to cushion the fall. Anyway, to stop rambling and ask the question I wanted to ask at the start, does anyone know enough stats to work out this theoretical likely loosing streak? I think that is the answer Duritz' question really seeks.

KV

Kenny,

I agree with you on what is important:

Quote:
"The worst loosing streak (as I see it) is the greatest amount of money lost from your bank at any time. So if you start with $1000, build to $1200, then at some point get down to $800 before rising again to $1300 your worst losing streak is $400 (1200 - 800)." End quote.

Call the $400 'Max. draw-down'. Something real we can work with.

I have already supplied the maths formula in this thread to work out the odds of any run of outs for any winning % [odds]. A formula is what was asked for.

Expected run of outs for 10% = 65
'''''''''''''''''''''''''''''''''''''''''''''''''' '''' 20% = 31

Betting level stakes , bank should be at least 3.5 times the run of outs.
E.g. 10% SR for a run of outs of 65 X 3.5 = 228
Bet $1.00 for a bank of $228

20% run of outs 31 X 3.50 = 109
Bet $1.00 for a bank of $109

Cheers.

Expected run of outs for 10% = 65
'''''''''''''''''''''''''''''''''''''''''''''''''' '''' 20% = 31

Bagman, how did you arrive at the above [what formula] ?

'Expected' [it will probably happen] just doesn't make sense. Have you worked out the odds of either of the above happening ? So why are they expected and why did you settle on 65 and 31 ? Why not more [or less]?

I think it would be a very long wait indeed for either of the above outs to ever happen. They might happen, yet so might 200 runs of outs for either 10% or even 20%. It's seems like nonsense to me to say this is the [definitive?] run of outs you can expect. Please explain, I'm mystified. Thanks.

Bhagwhan THANKS for that, that is EXACTLY the kind of answer I am looking for, now could you kindly tell us the maths used to arrive at those answers, so I can apply it to other examples?

Crash - Grade 3 schoolboys know the maths for working out the odds of a series of outs as in your example. In that respect, with a calculator or Excel I can happily calculate the LIKELIHOOD of any series of outs, which is the maths you provided, but that's not the question I asked. The question I asked is what run of outs should one prepare to expect at some point, given the strike rates, and THEREFORE what is a safe betting level, given the strike rates? That is exactly what Bhaghwan has endeavoured to (and seemingly succeeded to) answer.

No harm though Crash, always do enjoy your electic posts. :)

But, again, Bhagwan, show us the maths please?

Actually Grade 3 schoolboys DON'T know the maths. If they did then what are they still doing in Grade 3?

But Duritz, if you claim to be able to do such basic probability, how can you NOT realise that once more Bhagwan is talking nonsense.

Obviously the largest run of outs increases with the more bets you make.

Anyway here are the maths.

http://mathworld.wolfram.com/Run.html

To paraphrase Groucho, maybe a Grade 3 schoolboy can understand that, but where on Earth am I going to find one.

Duritz,

TwoBets gave you a link to PRECISELY answer your question.

If you weren't interested in value why didn't you just say strike rate of 22%, and leave out the $4.80 dividend?

Key those numbers into that calculator and you will get an answer - which fortunately matches mine.

Dutch betting does NOT consider value as you claim.

What you appear to looking for is a "Risk of Ruin Calculator".

Simply google for that (Australia) and you will find a free one.

If I gave you a link directly it would offend the censor.

Hi JFC,

With the aid of my mates twelve year old I attacked the maths in your link and came to the conclusion it only predicts the likely run of CONSECUTIVE outs, not the actual worst run. The worst run being the cumulative effect of maybe many runs of outs and what we really need to know to judge our bet size. (If this conclusion is wrong blame the 12 year old).
As you say knowing the number of bets is essential to working out the likely number of consecutive outs or for that matter the worst run. I suspect the figures Bagwhan provided are based on statistics and if I were at home and had my handy 3rd grade statistics book handy I'd explain how they are derived.
From what I remember integration was required to provide a formula giving the maximum number of outs from a sample size and a hit percentage so the book takes pity on the mathematically challenged and provides a table of approximate values. Using this table you can predict the likely number of consecutive misses at any percentage hit rate and sample size (number of bets).
This again doesn't help us with the calculation of our worst run. I believe this is what Bagwhan is providing when he says multiply the worst run of consecutive outs by 3.5. He does fail to tell us (as JFC point out) what number of bets his figures relate to.

I wonder though if Bagwhan's figures have any meaning without knowing the likely dividend we are going to win. Obviously if we have a 50% strike rate and an average dividend of $1.90 we will always end up losing our bank whatever the run of outs though we may succeed with an average divvy of $2.10.

I still reckon my random number program at the start of this thread takes a lot of beating. It takes everything except variably divvy into account and must be worth a fortune to everyone that bets on horses. When interest is at a fever pitch I might even market it unless that cursed "Risk of Ruin" thing is just as good as it is foolishly underpriced.

O.K. On holidays, starting to ramble, leaving now.

KV

Thank you JFC, I feel vindicated. I also think Bagman's figures say nothing. I had previous stated on an earlier page: 'Expected runs of outs' are meaningless. I did however extent the courtesy for him to explain his reasoning.
I had explained previously [3rd or 4th post here] how to work out [simply] the odds of an any run of outs. The odds of various possible outs happening are more meaningful and useful than 'expected". Surely a grade 3 schoolboy should have been able to take it from there for their betting purposes Duritz ?

Cheers.

Was that:
a) eclectic.
b) electric.
c) epileptic.
d) I should buy a better dictionary.

KV

KV,

This is one big problem I have with Bhagwan's inclinations, he still doesn't seem to understand the insanity of playing negative expectation games.

He's quite content playing Roulette Red/Black which has an expectation of -2.7%. Then he seems to delude himself with some low run-of-out estimates to justify donating money to Casinos.

---

I just ran my Drawdown simulator for 1,000,000 trials @ 22% and $4.80 to contrast my results with your earlier ones.

Profits - Drawdown
$54,964 $226
$57,435 $219
$59,254 $241

Right now I'm unsure of the implications.

Crikey JFC...

that has to be the worst **************isation of the Kelly criterion I have seen in a looooooong time.

Anyone who stakes according to the above Math needs to seriously reconsider their life as a gambler.

Cheers,
Chris.

Well I don't care what you'se say.
JFC is the best,and I love him.
And have you dowloaded and ran "risk of ruin" yet,Duritz?
You must!

Unable to find the Risk of Ruin calculator.

As to the Grade 3 schoolboy (with the guide in his pocket):

Say, for example, you had a method with a 1 in 100 strike rate, but it was beautifully profitable with an average dividend of $1000. Well, you still have to consider money management and prepare for runs of outs. Say your bank is $1000. Even with this superlatively profitable system you can't go having 5% of your bank on them, because at some point you WILL hit a run of outs of 20, destroying your bank. The likelihood of a run of outs of 20 is 82% (0.99^20).

So, say you bet 1% of your bank. The likelihood of beginning a run which would wipe it out is still high, at 36.6%. (0.99^100). So, on average, with a s/r of 0.01 you are going to begin a streak of 100 losses every third bet or so. Not sustainable at 1%.

All right - 0.1% of your bank is the bet. In order to wipe it out, you need to have 1000 losses. Chances of that - 0.004%. (0.99^1000)

@@@@!!!!!!!!!!!!!!!

That's a massive difference!!! Suddenly, with this, your chances of wiping out your bank are merely 1 in 23,000 or so!!

So, is that the right bet size? 0.1%? Or is it something slightly more, or less? WHAT FIGURE IS THE RIGHT FIGURE TO BEGIN BETTING WITH???

That is the essence of the question I am asking. It is merely what is sensible, given a strike rate, to use as an outlay figure, given a strike rate. I think perhaps what people are forgetting is that this question is not entirely mathematical. In working out what is "sensible", part of the consideration is determining what you as a punter can handle losing of your bank before you strip off and start pacing the living room, bottle of scotch in hand, quoting from Kerouac's On the Road.

We need to consider the psychology of it: ie, what can we handle, before we do our banana?

In that respect, I again applaud what Baghwan said, for in that is some truth. He said that your bank should be 3.5 times what you can reasonably foresee as a losing streak. I myself had been thinking along the lines that if my worst losing streak only wiped out a quarter of my bank, I'd be fine. THAT'S the logic behind figures like the 3.5 of bank etc. This is what I mean when I say it's NOT a purely mathematical question. People forget that we are humans with human frailties and the best test and strain of these frailties is a long losing streak. Trust me, like no doubt all of you, I've been through them. The biggest test of a method is how is stands up while the selections are falling down.

So, like the Castle built on the hill for extra fortification, I only want 25% of my bank to be lost in the longest forseeable losing streaks.

In that case, if your bank is $1000 and your longest forseeable losing streak (LFLS so I can stop typing it) is 50, then your bet size $5, or 0.5%.

Problem is, HOW does one calculate the LFLS??? What is reasonably foreseeable?

I take Crash's and others' point that the LFLS depends on how long you bet, so in this case let's say 10 years. We live under the decimal system, everything is 1's and 0's, so let's say 10 years.

With that in mind, next thing we need to quantify is number of bets in the 10 years, so - 200 per week, strike rate 10%, let's work it out on that. (I know, 200 per week, shock horror, let's just go with it).

Therefore, 200 bets per week, lets round that to 10,000 per year, 10 years, 100,000. It all fits nicely in the decimal system.

So, strike rate 10%, 100,000 bets, what are the chances of a run of outs of 100?

Well, the chance of a run of outs of 100 at any given time with a strike rate of 10% is 0.9^100, or 0.002656%, or 1 in 37648. So, reasonably, you can expect 3 of these such runs in a 100,000 bet run. In that case, if that is the maximum run of outs you can "reasonably" expect, then your bet size should be 0.25% of your bank, given that you only want to lose 25% of you bank in this longest run of outs.

But can you expect worse than that?

What's the probability of a run of outs of 200? It's 0.9^200, or 0.00000007055079%, which is 1 in 1,417,418,550 bets.

Now, maybe the pessimists out there wills say, "yeah, I expect that, just my luck. First bet I have, and wouldn't you know it, a 1,417,418,550/1 shot will get up by me having a run of outs of 200." Well, we'll just rename you Neil from the Young Ones.

From my point of view, I don't think that's a reasonable run of outs to expect, therefore reasonable is somewhere in between.

How about 125? - Maths is 0.9^125, or 0.00019068374812%, or 1 in 524,428.

110? - 0.9^110, or 0.00092613871310%, or 1 in 107,975. This means you could expect one of these runs in your 100,000 bet run.

Maybe it's 110. Maybe you have to find the figure whose likelihood matches your anticipated run of bets. In this case, that would mean betting 1/440th of the bank, so that in the event of that run, only 25% was knocked out. Of course, 1/440th of $1000 is only about $2.20, so you'd want to have a big bank.

I don't know, this is why I posed the question in the first place - to try and find the way of working out what is a SAFE level but not a DEAD level at which to punt, given a method's strike rate. Perhaps I just answered my own question?

Must run now, my Grade 3 class starts shortly, teacher said we're learning about the Magic Faraway Tree today.

My 2 cents worth which is probably worth about that (2 cents) as I have only been betting for 42 years, but I still contend that you have to be prepared to lose at least 1 bank! E.G. AT THE PRESENT I have a plan that is showing 86% POT on total stakes BUT, without going into details is showing one maximum bank wiped out in the last 2 years and another that is looking VERY serious , in fact it all depends on 2 races next saturday!
BUT, even with 2 banks wiped out I am still showing a reasonable profit overall, puts a slightly different angle on things though, don't you think???

Duritz,

You seem to be looking for a formula to guarantee you'll never lose more than a certain amount of your bank. It's a crock and no such formulas exists except beating the bookie over the long term. OK, so you want to make sure you can only ever lose a 1/3rd. of your bank? When you do, what then? Walk away from punting?

Most punters who just enjoy a punt on Saturdays, allow so much per week to punt with and divide it up for the amount of bets they have [don't knock them, it's cheap entertainment if the betting allowance is within their budget].

If however, the goal is to beat the races and using a betting bank, forget all the maths formulas and runs of outs garbage and leave it in the hands of the mathematicians here [there is at least one in this thread I know of ..Stebbo], or would be mathematicians here who enjoy that stuff. Just bet 2% of your bank each bet. It's a fairly acceptable and common percentage among Pro's and serious punters for very good reasons. $20 bet for $1000 bank and $2 bet for $100 allows for an awful lot of outs. Just round down to the nearest $1 or $5, depending on your bank size.

You'll either [very] slowly get rich ....or poor :-(

Perhaps you should offer your juvenile paternalistic advice to Dr William Ziemba, who I presume recently co-authored a pertinent book with William Benter.

I'm prepared to bet that Benter is not the most successful gambler in the world as whoever that might be would probably shun publicity, but most people would be content with Benter's Powerball equivalent a year.

http://finmath.stanford.edu/seminar...emba2004Win.ppt

Sing it with me...

"Duritz is always running around, trying to find, certainty..."

Mr Duritz,
 

Re your post #30,
Risk of ruin calculator can be downloaded at www.twonix.com under the heading "punting articles" at left of page.

JFC,

does your simulator give you the longest run of outs as well? Putting that figure alongside the drawdown (which I shall assume is the maximum drawdown) might lend some credence or otherwise to Bhagwan's figure of 3.5

Cheers,
Chris.

Duritz,

my experience is that you simply can't use the longest run of outs (your LFLS) as a basis of deciding your stake. As I mentioned in the other thread, if your longest run of outs is 10, you might get 10 outs, get a $1.80 winner, and then get another 10 outs. You're now 18.2 units out of pocket, but your longest run of outs is still only 10.

If you do use the figure of 10, then your idea of only losing 25% of bank is remarkably similar to Bhagwans 3.5 figure... but I can tell you that you will very likely push the boundaries of your entire bank, not just 25% of the bank.

If you use a Maximum Drawdown figure, then you can safely bet to lose a much larger percentage of bank than your suggested 25%. IMHO, if you have a good idea of your expected MaxDD, then only banking to lose 25% of your bank is a little too conservative.

Cheers,
Chris.

Duritz,

Horse racing is part of the futures market. Not a place for the faint hearted and although we do our best to protect ourselves, certainty against failure will never be part of that market unless we never bet on it.

jfc and Dr Z
 

Hi jfc,
here is a spreadsheet you might find interesting, while your on the subject of Dr. Z.
If your interested the sheet can be adjusted to Aussie racing by deleting the bottom half and making a few adjustments in the top half of the sheet.
If you understand his work on the Golden section you'll get great benefits from the sheet.

Hmm, I'll check mine out tomorrow and put a longest run of losses into it, I've just finished a 1000Km drive so I'm not functioning well at the moment. I would have expected better agreement than that between our figures. But then after 1,000,000 bets with an expected return of 105.6% I would have expected the profit to have been closer to 56,000 each time.
How does yours work?

KV

Ah, I just got a maximum drawdown of 378.4 with yours on the fifth go and figures of 332.4, 260.4 and 255.6 with mine on three consecutive goes. Must be the random element.