Does your strike rate have an impact on your bankroll management?

Does a lower strike rate make it more challenging to profit from racing long term?

Does betting proportionally make a difference?

The answer to the three questions above is a definite yes. Below is an old post that I made on the Punting Ace forum.

Hi xxxxxxx

I fully concur that anyone betting proportionally is managing their capital in the most appropriate way. Whilst the profit obtained over a large enough sample will usually be around the same (from either level or proportional betting), the clear advantage of betting proportionally is that your drawdown's are more controlled. This then forms a direct relationship with strike rate in that its impact (relevant to bankroll management and profit) is such that having a lower strike rate makes winning over the long term more challenging.

To illustrate my point I have detailed below the difference between say a strike rate of 19% and 26% using a starting betting bank of $10,000.

Strike rate of 19% (assuming a profit edge of 10% and maximum drawdown of 50% of starting bank)

1. Your average bet size should not exceed 0.68% of your bank;
2. Using 1 line of deviation (68% of the time), you will likely have a drawdown of between 32-61 winners in average bets;
3. Using 2 lines of deviation (95% of the time), you will likely have a drawdown of between 17-77 winners in average bets;
4. There is still a 5% chance that your results will fall outside both points 2 and 3;
5. Depending on how long it takes to wager say 1,000 bets, your results in terms of POT% are likely (95% chance) to be between -4.4% and +24.4% POT after the 1,000 bets have been made and resulted.

EXPECTED PROFIT FROM THIS STRIKE RATE (STRATEGY): $6,800.00

Strike rate of 26% (assuming a profit edge of 10% and maximum drawdown of 50% of starting bank)

1. Your average bet size should not exceed 0.80% of your bank;
2. Using 1 line of deviation (68% of the time), you will likely have a drawdown of between 26-50 winners in average bets;
3. Using 2 lines of deviation (95% of the time), you will likely have a drawdown of between 14-63 winners in average bets;
4. There is still a 5% chance that your results will fall outside both points 2 and 3;
5. Depending on how long it takes to wager say 1,000 bets, your results in terms of POT% are likely (95% chance) to be between -1.7% and +21.7% POT after the 1,000 bets have been made and resulted.

EXPECTED PROFIT FROM THIS STRIKE RATE (STRATEGY): $8,000.00

The realities of betting dictate that if betting professionally, you are likely to experience this type of variance at least 2-3 times annually. The issue is whether you can withstand from an emotional perspective the inevitable losing run when it arrives. I know from my own experience that regardless of how many times it happens and how many times you get through it, it is still difficult to manage.

Using the above example of a punter with a 19% SR and guaranteed 10% profit edge, imagine that person after 1 year of betting, using carefully crafted selections, being behind 4.4% on turnover (approx 30% of their starting betting bank) and reassuring them that they were on a certain long term winner. They may not share your enthusiasm.

You can clearly see from the two examples why having a higher strike rate not only means less drawdown but why it ultimately can mean more profit. This is due to the fact that you can afford to bet more as the strike rate increases without ever changing your risk threshold. Ultimately your actual real dollars profit as a punter is the measure upon which you should judge yourself.

A key point to take out of this is that regardless of strike rate, you will experience variance no matter how successful your system and/or strike rate. In any case knowing how much to bet and how to structure your betting bank is of paramount importance.

__________________
Regards


Paul Daily - Ratings2Win Pty Ltd (Director)
R2W Axis - Axis is Australia's leading horse racing software and database; with sophisticated form analysis tools and accurate performance ratings that include Hong Kong.
http://www.ratings2win.com.au/