There are several gambling systems out there that you can try out. The thing is that on the long run they will usually fail to produce positive returns on your investment. This is not because they are flawed or wrong. The main reason why they do not work on the long run is human psychology.
In this article I will talk about position sizing and anti-martingale strategies that will earn you a nice profit on the long run.
The first thing that you need to take into consideration is your bankroll. Regardless if you are betting on horses, trading stock, or betting on baseball, you need to properly manage your bankroll with a position sizing strategy. You will make money if you apply this correctly and your desired punts are coming in. You will surely waste away your bankroll if you have no position sizing.
What is position sizing?
In its purest form, position sizing can be divided into two areas:
- The martingale area;
- The anti-martingale area.
Let me ask you a simple question. Have you ever gambled in a land based or online casino, and have you tried to recover your loses by increasing your wager? In this case you have used the martingale system without even realizing it.
The martingale strategy is when you increase your wager in order to recover your loses. When you lose a bet you simply increase your wager. The anti-martingale strategy is exactly the opposite. You increase your wager, but only when you are winning a bet. The truth is that one of these systems works and the other is a sure way to losing all your money. The trick is realizing which is which.
Let us take a look at two separate examples in order to understand this better. One example refers to the martingale system, the other example to the anti-martingale system. This way we shall see which system works and which doesn’t.
1. Martingale example
First of all you should note that all games of chance have losing streaks.
Let’s say that George places a $1 bet at 2.0 decimal odds to win. He bet on the horse Lucky Lady, but the horse was anything but lucky and it lost the race. George will then double his wager. He will bet $2 on the horse Manning, which also loses the race. George keeps on doubling his wager, but he never wins. He has now lost ten times and he has to place a $2,000 bet to just win his original $1. Spending $2,000 to win $1 does not sound like a very good idea, now does it?
But there is something else that we did not mention: the time factor. George is quickly running out of time. The track is going to close soon, and if that happens, George will be out a lot of money.
There is also another factor that you must take into consideration. There are betting limits and no track will let you bet huge amounts of money. So if you keep doubling your wager you will eventually discover that you have to bet $5,000 for example, but the betting limit is $3,000.
As we have seen in the example presented above there are some serious drawbacks to using the martingale system. On the long run it will not make you money, instead it will cause you to lose money.
2. Anti-martingale example
As I have mentioned before, one system works and the other doesn’t. Since we have already seen that the martingale system does not work, I am guessing that you already figured out that the anti-martingale system is the one that actually works. The thing is that the anti-martingale system calls for a larger risk to be taken when you are on a winning streak.
Regardless on what you are batting, position sizing is based on increasing your position size when you are winning and decreasing your position size when you are losing
Percent risk model for position sizing
Before you start betting you should first divide your bankroll by a % factor. This way you can figure out your stake that you will use to back a horse. If you are laying a horse this is the maximum you can lose so you need to further divide by the laying odds.
Now think about the risks that you want to take. How much risk is just right, and how much is too much? Set up a percentage risk that you are comfortable with. Personally I recommend anywhere from 0.25% to 1.5%. It is not a high risk percentage, but it keeps me afloat.
- How to back a horse
Let us look at an example on how to back a horse. This is when you bet that a horse will win the race.
Let’s say that you have a bankroll of $3,000. You are willing to take a risk of 1.25% of your bankroll for every bet.
For your first bet you should wager:
3000/100 x 1.25 = $37.50
If you win that bet you should make a profit of about $150.
For your second bet you should wager:
3150/100 x 1.25 = $39.4
The process is actually very simple. All you have to do is divide your bankroll by 1.25% for each bet.
- How to lay a horse
Let us look at an example on how to lay a horse. Laying a horse is when you bet it will not win the race.
Let’s say that you have a bankroll of $3,000. You are willing to take a risk of 1.25% of your bankroll for every bet.
For your first bet you should wager:
3000/100 x 1.25 = $37.50
The odds for the lay bet are 9.0 decimal (8/1). Your betting stake should thus be $4.69 (37.5/8), giving you a bet liability of $37.5 if your bet is unsuccessful.
For your second bet you should wager:
3004.69/100 x 1.25 = $37.56
The benefits a percentage risk model will give you:
- It lets small and large betting accounts to grow steadily;
- It balances performance and the actual risk
- For the long term it is the best choice, the best possible position sizing model;
- All bets have equal risk;
- It allows your bankroll to steadily increase.