FTS Pod & Blog 10th November – Money Management 2

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FTS Pod & Blog 10th November – Money Management 2

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10/11/2022

If this is the first episode from the series you are reading or listening to, please go back to the beginning and work through them. I try and cover as many topics as possible to help you on your betting journey and get them in an order that makes some sense. To stop the ridiculous notion of people trying to dive in and win at this game and similarly to stop people making it far more complicated than it needs to be, both can be equally damaging.
Please also leave comments below the written version, reviews on your podcast provider if you enjoy this series and feel free to leave feedback positive or negative via email, Twitter or the FTS Telegram group.

In the last episode, I started on money management and ended with my plan for fixed odds betting. A plan I still use to this day.

For me, it is frustrating when you say to people, do this. I win doing this. They then try and tweak it or don’t accept what they are told and, for some reason, feel they have to do it differently. I then challenge them, and they make a ridiculous excuse/reason why they have to do something different.

If I asked a top chef how to make his signature dish, I would follow his recipe and instructions exactly as he told me. I would not alter it and then make an excuse as to why I had done something different when it tasted awful. Why would you do something different if someone gives you a recipe for success? I don’t get it.

In the last episode, alongside my fixed odd plan, which is plenty good enough for people to start, I also talked about variable staking. So, you may be asking if you have a fixed odds plan that you have laid out. How does variable staking fit in?

In the graphics on the written version of the last episode, I showed a sample of bets that were all 2.0 or all 4.0 five minutes pre-ko. It is doubtful that anyone is betting something that relies on such precise odds in their portfolio.

Your system will most likely cover a range of odds, so you may be backing home teams between 1.8 and 2.4.

As percentage chances go on prices, that is (I am using BF prices which are almost 100% to book). I will do an episode on bookmaker prices and remove the bookmaker margin, which is vital if working off bookmaker prices.

100/1.8 = 55.55%
100/2.4 = 41.66%

Our chosen price bands are on the price given percentage chances, therefore of 55% at the lower price end to 41% at the top end of our price range. To win, we need to beat those percentages over time at a rate that would enable us to profit and cover our costs for the activity (commission).

To elaborate on that, Betfair charges a 2% commission as its lowest rate, which you can get on by refusing all the offers. You are frankly nuts if you are serious and operating at a higher commission rate.

If we had 100 bets at 2.0 and lost 50 and won 50

We lose 50 points on our losers.

But we only win 49 points on our winners as we need to pay our 2% commission, 50 * 0.98 = 49, so we would only win 49 points and therefore end up 1 point behind.

If we win 51 bets, we win 51* 0.98 = 49.98
We can only then have 49 losers =-49

So 100 bets with a 51% strike rate would produce 0.98 points profit per 100 bets.

If we could get to 53%, we would have 53 * 0.98 and a 51.94 point return.

We could only lose 47 bets, so we lose -47 points, win 51.94 points and now have 4.94 points profit after commission per 100 bets.

Doesn’t it all sound so easy? As we saw in the graphics in the last episode, when you have periods when you only win 6 bets in 27 at odds of 2.0, a 53% strike rate can prove elusive. Unfortunately, people give up before they let the strike rate take effect, usually bemoaning bad luck but mostly down to not understanding the maths. It is all purely mathematics.

Anyway, a bit off-road there. Let’s get back to betting a system at different prices.

You will not over 1000’s of bets beat the maths of lower prices winning more often than higher prices. In our example of 1.8 to 2.4 bets. In the first 10 bets, we may have three 2.4 winners and a single 1.8 winner and again be laughing all the way to the bank, thinking this is easy. As that plays out over time, I guarantee you that you will not end up with more winners at 2.4 than you do at 1.8. It is simply impossible. Whilst I know the markets can be beaten no matter what the neigh-sayers say, they are not that topsy turvy.

Let’s illustrate that with my exact system for backing Home teams between 1.8 and 2.4

What is the criteria, Ian? I’ll give you a clue – wrongly priced away, teams.

And here are how my live bets break down.

As the price goes up, the strike rate goes down. It is unavoidable and will always happen.

The longest losing run is 9, and only two bets were priced at 2.0 and below in that run. The first observation is that I will have longer losing runs and expect the ROI to fall over time to nearer 8%; it has outperformed what I expected so far, so when the downturn comes, I am not disappointed. I am planning and preparing for it. At average odds around 2.1, I cannot expect a losing run of 9 to be the maximum, and I cannot expect to run at over 10% ROI forever.

I can smooth that run betting-wise. I win 56% of my bets up to 2.0 – I can have more on those bets and less on bets that are running at 50% and more volatile (and that % is likely to fall as we get through another 1200 bets)

My stake has increased to £500 per game roughly.

I could say I will have £500 on the middle range bets, £450 on the higher odds bets that only win 50% of the time and £550 on the lower range bets that win 56% of the time.

I can be a bit more numerical about it. I take the overall strike rate as my whole – 52.33

I then increase/decrease my stake by the strike rate percentage difference of my odds bands compared to that whole number

Odds Range 1.8 -2.0, Strike Rate 56.51% – 52.33% = 4.18%
Odds Range 2.01 – 2.20 Strike Rate 51.37 – 52.33 = -0.96%
Odds Range 2.21 – 2.40 Strike Rate 50.39 – 52.33% = -1.94%

1.8 – 2.0 – Base Stake 500 + 4.18% = 520.9 (521)
2.01 – 2.2 – Base Stake 500 – 0.96% = 495.2 (595)
2.21 – 2.4 – Base Stake 500 – 1.94% = 490.3 (490)

My stakes now vary by £31 depending on which price band they fall in £520 is the top stake on the bets which win more often and £490 on bets that win less often. It simply smooths the ride; if a bad run comes, it is more likely to be at the top end of the prices, so, therefore, the strike rate will come down, and stakes will decrease on that section but likely increase on the shorter prices. I am maximising the bets that win more often and being safer on the bets that lose, and may provide me with a bad run. Remember the last episode? As I keep saying, only 6 winners in 27 bets at odds of 2.0

There is no definitive way. I am sharing what works for me. All staking methods that develop are simply people’s ideas. Never risk more than 5% a trade, and never risk more than 2% a trade. People recite these things as if they are gospel with next to no idea if that is correct – a little knowledge is dangerous, as they say! Ultimately you have to do what works for you. I bet how it suits me mentally. My betting does not suit others, as I have said before – at the forefront, for me, though, are safety and the opportunity for growth. They are my two main driving factors, and I can be patient and let them play out. I have my own goals and aims for my betting partners and me and a clear path to them. In fact, all my work over the last two years has been with those two goals in mind and how I can share it easier with the people I wish to share it with.

Next time I will look at trading staking, Kelly, the 8th wonder of the world, compounding and how, when done correctly, you may start slowly, but then things soon take off.

One Response

  1. Amazing blog again Ian. How to smooth the ride with variable staking was really educational for me.
    Can`t wait for the next episode to arrive.

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