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:-)