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?

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

__________________
"Not winning on a horse that came first is one thing.....Losing on a horse that didn't come first is something else entirely!!!"

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.

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 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.

__________________
...time held me green and dying, though I sang in my chains like the sea. - Dylan Thomas

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...

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