Money Management

[shoelessjoe]

Hi All, Im sure Im not the only one that has this problem but my money management really sucks.I feel this is just as important as being able to pick the right pacelines.If anyone has any suggestions on a good book other than the one by Barry Meadows I would like to know.If possible something that's geared to someone with a small bankroll.Someone did suggest Horse Racing Logic by Jones. Thanks Shoeless

[timtam]

Heres a progression you could try

5
8
10
12
14
16
18
19
20
21

with a hit you drop back to the beginning or back a few steps depending

how far down you are at the time

small bankroll with a decent win % you can play for a while and make
it worthwhile

[joeyspicks]

Shoeless: I would highly recommend "Horse Market Investing" by
by David E Schwartz. You can get for about $34 at horsestreet.com

[Overlay]

Along with the titles by Dave Schwartz and Barry Meadow already mentioned, I've also found Commonsense Betting by Dick Mitchell very useful.

[BIG RED]

All depends how much 'action' you want. I like to play 5 trks at a time when I want a lot of action. How I do it can be cheap also, that way, you yourself can see how you do.I bet much more, but, the progression would be:

Per track, I play only the 4 best bets of card. $2, $3, $5, then $10. That's a simple $20 per track to see how you do. Good luck

[BIG RED]

Forgot to say, you stop when you hit. Play only up to the 4 bets per track. A decent 30% win can make this work

[midnight]

Progression methods are doomed to hit the eventual long losing streak that wipes them out.

[Buckeye]

agree with Midnight.

Math is not debatable, "if you want to play a "system" (progression) we will send a car for you!" Plane train automobile, etc. It's been tried before, and it doesn't work, maybe Dave has something to say which could work, but essentially, there is no free lunch. It's been tried before and it always fails. Has something to do with Expectation.

[Dave Schwartz]

...maybe Dave has something to say which could work...


Okay, so maybe it is self-centered of me to consider this was me you are talking about, but "the heard my name" buzzer went off (and ruined a fine Wednesday nap, I might add) so here I am.

First, money management is not rocket science, but risk-reward can be.

Let's start with a couple of absolutes (no vodka):

1. You cannot change a negative expectancy to a positive expectancy with a betting scheme.

2. You cannot change a positive expectancy to a negative expectancy with a betting scheme.


So, what good is a betting strategy?

Well, if you already have a positive expectancy there is more to playing a game than winning and losing. There is also consistency.

While we cannot change a disadvantage into an advantage, we can use a money management strategy to restructure the bets in the game to something that is... for lack of a better phrase... more pleasant experience.

Permit me to site a couple of examples.

Suppose you are a casino owner. (Joe's Casino - take interstate 50 south to just this side of the tunnel, make a left next to the Shell station, then go...) In this casino, you have a roulette wheel. That wheel has 36 numbers (numbered, amazingly, 1 through 36), a zero and a double-zero. A total of 38 numbers.

When one of your suck... uh, players, makes a wager on a number they have one chance in 38 of connecting and you pay them 35-1. For you math whizzes out there, this translates into a 5.26% disadvantage for them. (bet $1 x 38 = $38 bet, return $36 [don't forget that you get your dollar back as well], so you lost 2/38 or -5.26%)

So, what is your advantage? Why it is 5.26%, of course. Because whatever the, uh, customer is going to lose, you are going to win.

Now, that may seem very basic, but one must always bear it in mind. For every winning bet, there is a losing bet as well.

So, imagine that the customers at your table are so tired of hitting only once out of each 38 bets and they begin to complain that the game is too hard. You decide to give them a special wager where they can win twice as often! You call it "Two Numbers Split" and decide that it is going to pay 17-1. Is the customer smart enough to see that your advantage (his disadvantage) has not changed in spite of hitting twice as often?

(bet = $1 x 38= $38; return $36 [$18 x 2; don't forget that you are getting your dollar back two times now], so he is still losing 2/38 or 5.26%.)

Heck, you might even develop a bet that allows the user to play three numbers at once. It pays 11-1, so each time it hits the player gets back 12, he does that 3 times out of each 38 spins. Yup. Still losing 5.26%. Now he gets to win three times out of each 38 spins, or 7.89% of the time.

You could have a wager that allows six, twelve or even eighteen numbers. All with the same mathematical (and financial) outcome.

So, what is the point to allowing the customer win three-times as often while keeping precisely the same expectation? It allows him to be more comfortable while he loses his money. And this is a good thing, don't you think?

But there is an interesting side-effect to this plan. You see, as players come and go, there is still a risk that someone could (heaven forbid) get lucky and, while betting very large sums of money conk you pretty good at a 35-1 clip.

What do I mean?

Well, what you have effectively done by adding these "proposition" bets is to lower the odds hat you have to pay when a player hits and that will usually lower your risk.

If you get a chance, go watch a busy roulette wheel in a casino somewhere. Imagine that everyone is playing the same betting unit no matter what color their chips are. What you will typically see is that in spite of a few big hits where a player has clustered her bets (remember when only women played roulette?) around a single number, most of the time the winners are paid off by the losers.

Same principle in a progressive-slot carousel. There is only one winner for the big hit at a given time.

So, what does all this have to do with "money management?"

First, there is more to a game than the advantage (or disadvantage). There is also hit rate. And one more thing... ruin.

We'll discuss that next.

[Dave Schwartz]

Ruin.

What does it mean?

In our discussion it means, "going broke."

In Alan Wilson's book The Casino Gambler's Guide, (Harper and Row, 1965), he addresses The Gambler's Ruin Problem in detail.

(Sure, you know all about The Kelly Criterion but do you know this one?)

Essentially, GRP answers the question: "What are my chances of doubling a stake with X units before losing the entire stake?"

More specifically, imagine that you are a roulette player. You come to Las Vegas every weekend. You play with precisely $100 each time. You always bet precisely $1 on red, an even-money bet. You play until you win or lose that $100. In other words, you are either walking away with $200 or nothing.

Every single weekend you travel to Las Vegas and bet that $100 one-dollar at a time. (Okay, so you don't have much imagination.) Week in and week out. Year in and year out.

The question is, "How often do you win?"

When I ask this question at seminars, I get all kinds of answers:

"Well, you've got a 5% disadvantage. That means you are winning just over 47% of the bets. 47% of 52 weeks would be 24 weeks, so I'd say you win about 24 times per year."

Or

"No, it would be worse than that. You gotta hit a big winning streak to overcome the losers. I'd say a little less, like maybe 20 times per year."

http://www.horsestreet.com/BBSImages/GamblersRuin01.jif

From Wilson's book:

This is a most important formula! Here, r(a) is the ruin probability when a player attempts to double a bank of a units. S stands for the success ratio, that is the ratio p/q where p is the probability of winning on any single play, and q is the probability of losing on any single play. This formula applies to any game with an even payoff.

So, let us look at our roulette player.

ruin = 1 / (1 + (SuccessRatio)^a)

Let's fill in what we know:

Success Ratio= ChancesOfWinning / ChancesOfLosing
Success Ratio= (18/38) / (20/38)
Success Ratio= 47.3684% / 52.6315
Success Ratio= 0.90000000

a=units = 100

ruin = 1 / (1 + (0.90)^100)
ruin = 1 / (1 + .0000265)
ruin = 1 / 1.0000265
ruin = .9999735

So, our roulette player, who I wrongly identified as you in the beginning of this article; you obviously are way to smart to attempt such a silly thing as trying to beat a game with a 5.26% disadvantage.

Anyway, our roulette player's chances of ruin is 99.99735%. That is so close to 100% as to be considered absolute. But permit me to put it into better perspective for you.

See that ".0000265" up there? That is his chance of winning one of these $100 bills. Look at it as a percentage. 0.00265%

Okay, let's try another way. If we divide 1 by this number we get how often he can expect to win. That number would be 37,735.8. Oh hell, we're all friends here. Let's just forget the point-eight and call it 37,735.

Okay, so back to the original question:

The question is, "How often does he win?"
Well, if he plays 52 weeks per year then he should expect one win every 725 years.

(Note: In my money management manuscripts, I reported it as 724 years. Calculator rounding will do that to you.)

Shall I go on?

[timtam]

All that math is fine but how many people at the wagering places even

give this stuff consideration? I see guys standing at the machines glancing

over their shoulders at any track any tote pounding out tickets. A simple

progression can make a days wagering fun providing you know when to stop.

Its like playing only the favorite with a mild progression sure you will

eventually lose but probably by the next day your on to something else.

I know keep these guys playing cause they're your competition but they're

always gonna be there.. I think most of the times our biggest opponent

is ourselves.

[douglasw32]

Dave, Thank You !
Very Insightful

[thebeacondeacon]

Hi All, Im sure Im not the only one that has this problem but my money management really sucks.I feel this is just as important as being able to pick the right pacelines.If anyone has any suggestions on a good book other than the one by Barry Meadows I would like to know.If possible something that's geared to someone with a small bankroll.Someone did suggest Horse Racing Logic by Jones. Thanks Shoeless

Are you sure that it is your money management and not some other part of your game that is giving you trouble?

The reason I ask is that the two books you refer to cover very different subjects. Barry Meadow's book, "Money Secrets at the Racetrack", deals with engineering bets and the issues that Dave has raised.

However, Glendon Jones' "Horse Racing Logic" is really about contrarian handicapping and expectation. This is an essential but overlooked aspect of the game, that is sometimes confused with money management. I would think you could go pretty far applying the lessons from this book.

I have just started reading an impressive title, "Ten Steps to Winning", by Danny Holmes (a contributor to this forum), and if his money management section is as good as the handicapping portion, it is quite a gem. Also, there are a couple of books by Jerry Samovitz, mainly "Out of the Red and Into the Black", that you should also find helpful in structuring your bets, although I think his percentage of bankroll recommendations are still too high.

[shoelessjoe]

I have been looking for Horse Racing Logic but the book is out of print .The only copy available I could find was someone who wanted to sell it for 46 bucks not bad profit for a book that sold for 9.95.Shoeless

[hurrikane]

Dave's stuff is great and worth every dime.

Another book is Steve Fierro's 4 quarters of horse raceing.

As for all the people standing at the machines looking around and playing progression systems. That's why we can make money at this game. If it weren't for them it would be a lot tougher than is already is.

[timtam]

But its the same guys I see every day. Either they're independantly wealthy

or they're hitting enough to come back. I always get a kick out of guys with

math formulas that will make Einstein cringe and they have the superior

attitude that they're taking the money from the beer drinking crowd.

Horse racing just ain't that easy !!!

[melman]

Hurricane you hit the nail on the head with your mention of Steve Fierro's book it's The Four Quarters of Horse Investing and sells for $35 which in my view is well well worth the price. Anyone who knows me can say that I am not a big "book" guy but this one is a very good read. Fierro's web site is racedayusa.com which has a 1-800 number for orders. Serious players should want this one for Christmas. Been a long time member of PA's web site so I am not a "tout" for Mr Fierro nor have I ever met the man nor do I know anything about his other services, just saying I loved the info in this book and believe it will help any serious player. :)

[hurrikane]

But its the same guys I see every day. Either they're independantly wealthy

or they're hitting enough to come back.

I know people that bet every day and are big losers. Big time.

Just like the guys with the progressive betting systems that say 'at least you will have some fun'.

Nothing wrong with having fun. I hope all of these people keep going to the track and having fun. Horse racing needs that. I need that too.


I always get a kick out of guys with

math formulas that will make Einstein cringe and they have the superior

attitude that they're taking the money from the beer drinking crowd.


If you are implying that this is me...you obviously don't know anything about me.

And that's good. Let's keep it that way.

[Dave Schwartz]

Before continuing, permit me to tell you that Wilson's book is a bit rare. There are a couple out there now for around $30-40 if you search on Amazon or ABE.com. These are just great prices for this book. Generally, they go for $85 and up. (Okay, so I was considering buying up all the $30 copies before posting the last response, but in the spirit of the season I decided against it. <G>)

So, here we have our casino patron who has no practical chance of winning a session. What can we learn from him?

Well, we can learn one thing that is really important. Get this...

The chances of winning a "session" is drastically different from the chances of winning or losing an individual bet.

This statement becomes more important when you realize that "advantage" is dependant upon two things: Odds and Hit Rate.

If you change either of the two components of the equation, you change the advantage or disadvantage. (Note: For simplicity let us assume that "advantage" can be a negative.)

So, while our casino patron places wagers in the "game" of roulette, he is actually playing a game with a much deeper set of rules; his wagering strategy.

One could logically say that he plays one game per week and that the game is not completed until there is a winner or a loser. This is much like a baseball game. In the 5th inning one team may be ahead, but what matters in the scheme of things is who is ahead when the game is over. The individual innings, the runs, hits and errors, pitching changes, all of this contributes to that single, countable entity known as "the game."

So, we have established that the roulette game that we have devised is not beatable for the player. Ever. But what if we change the rules a bit?

Suppose that instead of playing with 100 $1-units, he plays with 4 $25-units? How often does he win then?

ruin = 1 / (1 + (SuccessRatio)^a)

Let's fill in what we know:

Success Ratio= ChancesOfWinning / ChancesOfLosing
Success Ratio= (18/38) / (20/38)
Success Ratio= 47.3684% / 52.6315
Success Ratio= 0.90000000

a=units = 4

ruin = 1 / (1 + (0.90)^4)
ruin = 1 / (1 + .6561)
ruin = 1 / 1.6561
ruin = .6038

I have bolded what has changed from our original equation (just the units; "a").

So, our casino patron can expect to lose 60.38% of the time, clearly a losing proposition but we knew that going in. But how bad is it really?

Consider the "session" as a single, $100 bet. The chances of losing are 60% and the chances of winning, therefore, must be 40%.

So, if we wagered 100 times we would win 40 times at even money.


Bet = 100 x 1 = 100
Return = 40 x 2 = 80
Result = -20
Advantage = -20%


What is my point? Our player started with a 5.26% disadvantage at a "game" but ends up with a new game that has a 20% disadvantage.

You most certainly can change your advantage or disadvantage with a money management strategy. You do so by restructuring the game you are playing. You just cannot change it from a negative to a positive.

Next, we look at the casino's side.

[timtam]

I never even gave you a thought there zephyr

[socantra]

Wind him up and he spits out a major article!

Seriously Dave, many thanks and keep it coming. Looks like I'm going to have to keep coming back to this thread to complete the next chapter in my book of Dave Schwartz gleanings.

I've got both your money management pubs, but its always nice to see its restated and amplified, with your more recent thoughts.

To everybody else: There's more in the money management pubs, and they are well worth the money, but this thread is a great excerpt, and he's giving it away for free.

socantra...

[Dave Schwartz]

Free? You mean I am not getting paid for this?

Oh, this has got to stop!

[thebeacondeacon]

I have been looking for Horse Racing Logic but the book is out of print .The only copy available I could find was someone who wanted to sell it for 46 bucks not bad profit for a book that sold for 9.95.Shoeless

Here's a URL for a $39.95 copy:

http://www.bookfinder.com/search/?ac=sl&st=sl&qi=rnHUKyTyEiS3.0UBh2q.nksGwu4_5325120495_1:3:18

[shoelessjoe]

Thanks I think I will still pass.

[BillW]

Free? You mean I am not getting paid for this?

Oh, this has got to stop!

I was going to throw a few "picks" your way with a guarantee - if they don't win I'll give you some more to replace the defective ones. :lol:

Thanks Dave, nice post - another "print it and keep it".

Bill

[joeyspicks]

good stuff Dave! Thanks

again shoelessjoe or anyone else "wondering" about m.m. buy David's books and learn a TON. (its the best 53 bucks you can spend if you get both).

[Buckeye]

Who's Dave? :)

[Buckeye]

Dave Schwartz of course!

Thanks.

Can a money management system method whatever increase a positive expectation?

[Dave Schwartz]

Stay tuned. <G>

[Dave Schwartz]

Sorry, missed the question.

Can a money management system method whatever increase a positive expectation?

Yes, it can.

[Stick]

Dave
By using proper money management how much would you say a winning player could increase his percentage? 3%? 5%?

[cmoore]

Dave
By using proper money management how much would you say a winning player could increase his percentage? 3%? 5%?

So your saying a winning player is making a profit and still spending money frivolously. WOW!!!! Proper money management would probably benefit the winning player more then the losing player. He's already proven he can beat the game. A losing player hasn't proven he can win yet. My answer 5-12%..

[Dave Schwartz]

I don't have a precise answer but I can say that when you combine it with "session play" a realistic session win percentage could be 75%-80%.

In other words, you go out to play with (say) $500. Your goal is to win $500 before you lose the $500. It is reasonable to expect to win 3-out-of-4.

If you look at it from "session advantage" point of view it is just like winning 75% of your bets at even money: a 50% advantage per session.

But remember this caveat: You must have an advantage!"


Dave

[wonatthewire1]

Progression methods are doomed to hit the eventual long losing streak that wipes them out.


What if you were to hit at a 64.8% rate with average odds of 11.3-1?

[Dave Schwartz]

Why would you need a betting strategy at all? You are a wealthy man.

[wonatthewire1]

:)

[BCOURTNEY]

But its the same guys I see every day. Either they're independantly wealthy

or they're hitting enough to come back. I always get a kick out of guys with

math formulas that will make Einstein cringe and they have the superior

attitude that they're taking the money from the beer drinking crowd.

Horse racing just ain't that easy !!!

Actually yes, horse racing is that easy. The multi-million dollar Hong Kong wagering syndicates offer evidence of this as a stark reality for those who want to pay attention.

[BCOURTNEY]

What if you were to hit at a 64.8% rate with average odds of 11.3-1?

This sounds interesting. How often does this opportunity arise in 100 races? I guess I would prefer a 1% return every day of the year on current bankroll.

[BCOURTNEY]

Dave Schwartz of course!

Thanks.

Can a money management system method whatever increase a positive expectation?

When you invest in a positive expectation you actually decrease the return to yourself in american horse racing. We can't lay odds against a horse winning, and in that sense any investment you make actually decreases your returns. So all you can really do is invest, decrease your returns and attempt to maximize your return without exposing yourself or introducting new risks, by the mere act of the investment itself. This of course can be explained in a variety of methods as to the optimal way or solution to bet sizing which was solved over 60 years ago at Bell Labs. Something to chew on.

[BCOURTNEY]

So your saying a winning player is making a profit and still spending money frivolously. WOW!!!! Proper money management would probably benefit the winning player more then the losing player. He's already proven he can beat the game. A losing player hasn't proven he can win yet. My answer 5-12%..

Proper bet sizing can be represented in a variety of optimal strategies, some of which disregard or integrate your level of risk aversion. If you have no risk aversion then there exist well documented methods, if you have level x of risk aversion there exist other methods. The key is to find the method that matches best to you, your goals etc, and impliment it, track it, and adjust as needed.

[BCOURTNEY]

Further reading, non egg head article.

http://www.uncommondescent.com/evolution/gamblers-ruin-is-darwins-ruin/

[Dave Schwartz]

That was a good article, especially as it applied to the movie, 21.

That movie made it look so easy. It's not. (or at least it wasn't. I have been out of that arena for decades.)

[098poi]

(From that article)
The movie “21″ romanticized the advantage skilled players have. The movie “21″ portrayed the MIT students as people who could sit at card tables and bilk casinos like ATM machines. That’s not how it works as testified by one of the more noteworthy members of the real MIT team by the name of Andy Bloch (http://en.wikipedia.org/wiki/Andy_Bloch). Bloch reported that during his tenure as manager of the MIT team, the team was once in the red for 9 months before recovering. Skilled players lose big bets not quite 50% of the time. It is not unusual, on average, to have a losing streak of 8 hands in a row every 256 rounds. Ben Mezrich reported in his book, Bringing Down the House, an incident where the Big Player of the MIT team lost 3 hands in a row in 45 seconds of play for a sum total of $120,000.00! It happens…


Yes crazy stuff happens. I mean what are the chances of a horse winning at 38-1 AND the favorite finishing last (or not finishing) at .3-1?

[thelyingthief]

2. You cannot change a positive expectancy to a negative expectancy with a betting scheme.

this is completely misleading. kelly is all about optimal bet size: bet too little and you fail to capitalize; bet too much and you go broke--it's called gambler's ruin. we do not have unlimited bankrolls, so the assumption is unrealistic.

i bought dave schwartz's money management books, and discarded them as utter nonsense: about the only money-management concept i got from them was, "don't spend fifty bucks on crap". one man's opinion, but there it is.

tlt

[Dave Schwartz]

Wel, Mr. Thief, permit me to challenge your assumption (not about crap) but about over-betting Kelly into a loser.

That is what you are saying, isn't it? That you can take a positive expectancy and turn it into a negative with a betting strategy?

[GameTheory]

We've got to define terms here. Expectancy -- expressed as a percentage -- cannot be changed by a betting system, Kelly, anti-Kelly, or otherwise. (And Dave's systems are not really "anti-Kelly" even though he calls them that -- semantics again.) If you restructure the game as Dave talks about, that game might have a different expectancy (it is a different game, after all), but when you add up all the actual dollar amounts of the wagers along with the money returned, your ROI is going to be the same as your flat-bet ROI. (Given a reasonable number of plays.) It would be interesting to really dissect how his methods work relative to optimum betting (which is very little understood), but to do that I'd have to give away all the details, which Dave might not like considering he sells them.

But I don't understand calling Dave's stuff "utter nonsense" because he offers practical systems. Sure, there is some theory there, but whatever the theory, those methods will either be helpful to a player or not. Nothing can change his expectancy, but you can change how "pleasant" the bettor's experience is, as Dave said above in this thread (2 1/2 years ago). [By the way, how did this thread get going again? Dave said he "missed the question" -- the question was posted in 2005.] Anyway, calling them utter nonsense is sort of like calling a house or a car nonsense. It might not be to your taste, but nonsense?

[thelyingthief]

Wel, Mr. Thief, permit me to challenge your assumption (not about crap) but about over-betting Kelly into a loser.

That is what you are saying, isn't it? That you can take a positive expectancy and turn it into a negative with a betting strategy?

no, i'm not saying that at all. i'm saying that your risk of ruin multiplies as you increase your bet size over optimal. it is obvious that a sane man would not want to bet his 100k house on a 1% chance of winning eleven million dollars (positive expectancy), unless he had several hundred 100k houses, that is, and several hundred chances to make the gamble. at least, it'd better be obvious. i assume you know that expectancy is a product of three components, all of them equally important: how much you lose when you lose, how much you win when you win, and your percentage wins/loses. without infinite resources, yes, you CAN turn a mathematically positive expectation into a real world negative one by overbetting it.

you don't know this? really?

tlt

[Dave Schwartz]

I have decided to avoid confrontation with any insulting, overly-agressive person, especially one who hides behind a nickname such as yours.

Lying Thief... why would anyone choose to use such a name? (That is a rhetorical question. No need to answer.)


Dave Schwartz

[thelyingthief]

yes, you certainly wouldnt wish to conflict with someone when you're overmatched.

this also avoids gambler's ruin. lol.

tlt.

[TrifectaMike]

Did you know that the original Kelly (the original research) allowed for betting on a "slight" negative expectancy when wageringon simultaneous events.

Just me two cents.

Mike

[GameTheory]

Did you know that the original Kelly (the original research) allowed for betting on a "slight" negative expectancy when wageringon simultaneous events.

Just me two cents.

So does the "current" Kelly. It hasn't changed.

[Overlay]

Did you know that the original Kelly (the original research) allowed for betting on a "slight" negative expectancy when wageringon simultaneous events.

Just me two cents.

Mike

Is that related to the "Group Overlay Method", where you can include a horse with a high probability of winning in a group wager (even if the horse by itself is slightly underlaid), and realize a higher rate of return than if the high-probability underlay were excluded from the group?

[GameTheory]

Is that related to the "Group Overlay Method", where you can include a horse with a high probability of winning in a group wager (even if the horse by itself is slightly underlaid), and realize a higher rate of return than if the high-probability underlay were excluded from the group?Probably. Optimal betting amounts for multiple horses per race are not the same as if you were only betting one horse. So in some cases where you've got some low-probability but positive expectation longshots that you're betting in a race with a strong favorite, it is sometimes optimal to also include that high-probability but slightly negative expectation favorite. Remember optimal betting is about growing the bankroll as fast as possible, so this kind of hedge is sometimes mathematically correct...

[BCOURTNEY]

Is that related to the "Group Overlay Method", where you can include a horse with a high probability of winning in a group wager (even if the horse by itself is slightly underlaid), and realize a higher rate of return than if the high-probability underlay were excluded from the group?

Very important consideration with pick x strategies when your overall outcome might be postitive. e.g. 1.10 x 1.23 x .89 x 1.10 ... What I find interesting and counterintuative is that sometimes the only "overall" postitive expectation wagers that can be found involve using negative expectation horses in the sequence for the wager.

[banacek]

As an extreme example of this: Say you have a 3 horse race - Number 1 has a 50% chance of winning, number 2 has a 50% chance and Number 3 has 0% chance. If #1 is 3-1 and #2 is 0.95-1, it is optimal to bet both because in theory you can bet all of your bankroll. Half of the time you'll double your money, half the time you will lose 2.5%. Sounds like a deal to me!

Now that aint going to happen, but smaller versions of this situation can occur.

[BCOURTNEY]

no, i'm not saying that at all. i'm saying that your risk of ruin multiplies as you increase your bet size over optimal. it is obvious that a sane man would not want to bet his 100k house on a 1% chance of winning eleven million dollars (positive expectancy), unless he had several hundred 100k houses, that is, and several hundred chances to make the gamble. at least, it'd better be obvious. i assume you know that expectancy is a product of three components, all of them equally important: how much you lose when you lose, how much you win when you win, and your percentage wins/loses. without infinite resources, yes, you CAN turn a mathematically positive expectation into a real world negative one by overbetting it.

you don't know this? really?

tlt

The risk of ruin does not imply that someone making wagers have risk aversion or introduce it into their wagering strategy, you almost seem to suggest that it is a needed element or component. Alot of effective strategies recommend betting a fractional portion of the current bankroll as a percentage of bankroll, thus the bankroll can never reach zero, infinite resources not needed.

[thelyingthief]

originally, kelly worked for Bell Labs, and his formula was developed to measure optimal signal transmissions--some degree of degredation or signal loss is irremedial, and the formula stipulates the matimum ratio of sent to lost.

i'm not sure kelly ever involved himself in betting, that came latter, and in the hands of mathematicians driven by market considerations. one of which, a fellow at Bell, named Mandelbrot...

far afield, but interesting.

tlt

[thelyingthief]

The risk of ruin does not imply that someone making wagers have risk aversion or introduce it into their wagering strategy, you almost seem to suggest that it is a needed element or component. Alot of effective strategies recommend betting a fractional portion of the current bankroll as a percentage of bankroll, thus the bankroll can never reach zero, infinite resources not needed.

dude, i really don't know what to make of this statement.

tlt

[rusrious]

I know, Im bring up a old thread.

But I think, with handicappin, and doing it for a job replacement, money management is very important..

AND, to me, progressive betting is the way to build your bankroll, and it can be done quite fast..

Play 2% of your bankroll, if you like, its a safe number, I use 5% though.. So starting with a $100, playing progressively, watch how fast it will grow. Especially if you can pick winners, at least 25% of the time, or you can use PT favorites, or you can use ML favorites. Progressive bet them.. Set yourself up to profit $5 on every bet.. So, you can say, Im 5 bets in the hole, but when the next one hits, Im going to get paid $30 profit.. Your intensions are to get paid, for every bet you make. If you have a large bankroll, you can go 10-12 races and miss, but your still going to profit $50+ when your pick hits. Ive went thru many races, and I have yet to see a PT favorite not win at least 1 race a card. Im sure its happened, but not alot of the time..



Play fast conditions only. Choose a track, that is nice and dry, and fast, Bet the favorite, progressivly, till you hit. You wont come out empty handed..

Like I said, your bets MUST work with your bankroll.. Im doing a progressive system this week.. Everyday Im up, and have a set target profit I want to hit for that day. So everyday, my target is differant. Im trying to win 25% of my bankroll a day.. And keeping 5% profit, OF MY BANKROLL on every bet..

The first day, my target was 25% of Bankroll, or $25 for that day,.. Today, my target profit is $115 for the day. Every 10 days, start over. You can easily clean up for $1000 in less then 10 days.. So, 4 days in, Im almost half way to my $1000, which I will hit in less then 10 days..

At the end of the day, I correct my bankroll, find my percentages and targets for the next day. But always keeping my 5% profit per bet the same..

If you can handicapp well, you can make some real money at it. Knowing your going to hit every 3rd race, and PROFITTING every race, wheather you win or lose, is great..

Take it for what its worth, this is working well for me..

I started with $100 on July 22, and my bankroll has grown to $462 to-date( July25th)

The first 2 days, I was betting PT favorites, the last 2 days, I have been using my picks. 36 bets, 19 winners, $362 profit..

And, Im going to continue to do this.. Im having by far, the best, most optimistic, feeling in years playing the ponies..

Good Luck, and Great profits

[Robert Goren]

The problem with Kelly in horse racing is knowing your chance of success in each race. The reason most gambler end up broke (including some big time poker players and Wall Street bankers) is the that they over estimate their chance of success.

[Robert Goren]

I once had a method that hit 124 bets out of 203! Then it gave me 48 straight losers, 2 winners and then 31 more losers.

[rusrious]

---Start bal $100

7-22--$147.50 ( target profit--$25)--$47.50 accual profit
7-23--$173.10 ( target profit--$36)--$25.10 accual profit
7-24--$274.10 ( target profit--$43)--$101.00 accual profit
7-25--$462.40 ( target profit--$68)--$188.40 accual profit
7-26--$638.40 (target profit--$115)--$176.00 accual profit

So, starting with $100 and running for 5 days, so far, I have profitted $538.00


Progressively build it, Look to gain 25% everyday. Adjust it daily

[Dave Schwartz]

Rusrious,

Interesting thread. Please keep this going.

I have great interest.

Regards,
Dave Schwartz

[timtam]

rusrious,

Are you still play pt favorites?

[CBedo]

I know, Im bring up a old thread.

But I think, with handicappin, and doing it for a job replacement, money management is very important..

AND, to me, progressive betting is the way to build your bankroll, and it can be done quite fast..

Play 2% of your bankroll, if you like, its a safe number, I use 5% though.. So starting with a $100, playing progressively, watch how fast it will grow. Especially if you can pick winners, at least 25% of the time, or you can use PT favorites, or you can use ML favorites. Progressive bet them.. Set yourself up to profit $5 on every bet.. So, you can say, Im 5 bets in the hole, but when the next one hits, Im going to get paid $30 profit.. Your intensions are to get paid, for every bet you make. If you have a large bankroll, you can go 10-12 races and miss, but your still going to profit $50+ when your pick hits. Ive went thru many races, and I have yet to see a PT favorite not win at least 1 race a card. Im sure its happened, but not alot of the time..



Play fast conditions only. Choose a track, that is nice and dry, and fast, Bet the favorite, progressivly, till you hit. You wont come out empty handed..

Like I said, your bets MUST work with your bankroll.. Im doing a progressive system this week.. Everyday Im up, and have a set target profit I want to hit for that day. So everyday, my target is differant. Im trying to win 25% of my bankroll a day.. And keeping 5% profit, OF MY BANKROLL on every bet..

The first day, my target was 25% of Bankroll, or $25 for that day,.. Today, my target profit is $115 for the day. Every 10 days, start over. You can easily clean up for $1000 in less then 10 days.. So, 4 days in, Im almost half way to my $1000, which I will hit in less then 10 days..

At the end of the day, I correct my bankroll, find my percentages and targets for the next day. But always keeping my 5% profit per bet the same..

If you can handicapp well, you can make some real money at it. Knowing your going to hit every 3rd race, and PROFITTING every race, wheather you win or lose, is great..

Take it for what its worth, this is working well for me..

I started with $100 on July 22, and my bankroll has grown to $462 to-date( July25th)

The first 2 days, I was betting PT favorites, the last 2 days, I have been using my picks. 36 bets, 19 winners, $362 profit..

And, Im going to continue to do this.. Im having by far, the best, most optimistic, feeling in years playing the ponies..

Good Luck, and Great profitsGood luck with the martingale system derivative. :bang:

[rusrious]

Hey fellas,


I took yest off because my teeth hurt, and getting them (4) pulled tomorrow,

anyways, thru the 27

---Start bal $100

7-22--$147.50 ( target profit--$25)--$47.50 accual profit
7-23--$173.10 ( target profit--$36)--$25.10 accual profit
7-24--$274.10 ( target profit--$43)--$101.00 accual profit
7-25--$462.40 ( target profit--$68)--$188.40 accual profit
7-26--$638.40 (target profit--$115)--$176.00 accual profit
7-27--$748.90 (target profit--$159)--$110.50 accual profit
This was starting with $100.

I was using PT favorites, and it was working, but I moved to using my own picks, which are posted here in the selections today.

I may be starting my own forum, so if anyone wants to follow, and build a bankroll as a group, Im game.

Of course, anything can happen, its horse racing,lol. but I have ben haveing prety good results..

Im trying a few things out. If you want to use PT favorites, pick fast tracks, start with the first race, and continue till you hit. If you win by the 5th race, call it a day.

Ive always been on the hunt, for a theory that is automatic somewhere along the line.. Sure, horse handicappin can be an enjoyable time, but If you NEED to make the money, it can be done, and it is at that time Gamglin.. Your trying to feed the family, or paying a car note, or strugglin with a mortgage, you have to find a way.. So, you kinda have to be surtain, your going to make some cash. And, it has to be consistantly coming in.

Progressive bets WILL boost your bankroll..

Some are at he track to pass time, Im there to make a living. I spend about 18 hours a day, chunching numbers, reading stuff off the internet, and of course, trail and error..

One thing with me thru the years, was bankroll managment. BUT, in a seriousness, if you cant pick a horse, to make money off of, you shouldnt have to worry about bankroll mamagment, BECASUE YOU SHOULDNT BE BETTING ANY WAYS..

Now, everyone here has seen my picks, Ive logged them here, just about everyday, and hitting 80%ish in the money.. So, I think Im getting the right horses to win me some cash.

The thing I learned is adjusting your bankroll, daily. Have goals, which I use 25% of my bankroll, I want to profit daily. When I hit it, I can call it a day. Not being greedy, because that next run might break ya. Keeping to the game plan is very important.

So, if your "progressively" increasing your target a day, your "progressively" building your bankroll.. Where else can you increase your money by 25% a day? Consistantly?

But, with each bet, win or lose, I want to make money.

So, you increase your bets, after a lose.. If your profit margin is (5% bankroll)$5 per bet, your next bet must have that $5 in the math.

BUT, If you lose 4 bets, your still up $20, because with each bet that lose, your $5 is still there, If you hit on the 5th, you should profit around $25. Then, you simply increase your next day 5% of your bankroll, it will give you your target margin per bet, and you just do it all over again..

The thing with my picks, I might be down $60, after 4 races, but my next horse is PT odds of 6/1--where a $19 will get me all my money back,AND my $25 profit.. If I dont hit, then I will go to my my next, simply cause Im confident, I have a winner coming up..

Every Bet I want money, thats my goal.. OFFFFFF course there are nasayers..

But we are making this game difficult for our selves. Build your bankroll.. Pick the fastest horse every race if you want, somewhere inbetween, he's going to win, and very well could be the longshot of the day.

Set a goal, I want o make $100 a day, thats $700 a week, Thats $36,000 a year. Thats not to bad. Just for starters, cant beat it..

Then, buy some currency, gold, silver, plat, invest long term.

Its no joke out there anymore folks, its crap or get off the pot now-a-days.. And when you got a ATM sitting on your desk, why not use the darn thing.

Call me optimistic, call me a dreamer, but Im confident I figured it out. Im confident, I wont go 5 races without hitting a winner. Im confident, when that money leaves my hand, it will be back very soon..

I dont read books, this is all trail and error, and number crunching.

[rusrious]

I dont really want to jack this thread, but today I will do Monmouth and Saratoga and post results, PT favorites,

[GameTheory]

Progressive bets WILL boost your bankroll..
..
Call me optimistic, call me a dreamer, but Im confident I figured it out. Im confident, I wont go 5 races without hitting a winner. Im confident, when that money leaves my hand, it will be back very soon..
All that is fine, up to the point where you are overbetting your bankroll OR your bet becomes so large that it is hurting your odds in the pool. But what is your plan when you hit that run of 10 or 15 losers in a row?

And if you can afford (truly afford) to make those large wagers WITHOUT overbetting your bankroll (which must be quite large in order to truly afford them), then you'd make more money just by making all your bets large. You're throwing away money on the winners that come after other winners because you're only making the minimum wager on those. The real determinant of a safe bet size (besides the probability and odds of the horse you're betting) is the amount of your current bankroll, not how many winners or losers have come before. What's past is past -- why not just take the situation as it is? If I've got $1000 and I'm about to bet on a 3/1 horse that I make at even money, why does it matter whether or not my last bet was a winner or loser? Why wouldn't I bet the same amount in this situation no matter what?

Progressive betting works...until it doesn't. Then it wipes you out. But if you are raising or lowering your bet while keeping the maximum bet at or below the optimal threshold called for by the objective situation (above which you'd be overbetting), then such raising or lowering your bet within that zone is "safe" -- it is just fun with numbers. But don't pretend you're maximizing your profits -- you're just making the ride more suited to your temperament. Which also has its benefits.

[rusrious]

Your right, no doubt, it can drive you thru the ground,

But I put this in there

"One thing with me thru the years, was bankroll managment. BUT, in a seriousness, if you cant pick a horse, to make money off of, you shouldnt have to worry about bankroll mamagment, BECASUE YOU SHOULDNT BE BETTING ANY WAYS.."


Another thing, is I said to play tracks that are dry and fast, because favorites win much better percentage of the time.

I use my picks, and so far, Im 3 for 4 for the day, and up $22, and that with a $5 profit per race.

Again, im confident in MY picks, so I will use my picks.. I dont lose 3-4 in a row very often,

I do know what your saying tho, without a doubt.. Its gamblin at its edge.

I, myself, enjoy it, and have made over $600 this week, so I cant complain..

Thanks for the Input Game

Also, I would like to add, that after the 4th day, my profits per race were very large, like $30 a race, which IS bad. So, even if you play to gain $5 per race, your still gaining, and not making it hurtfull on your bankroll.

So, today for instance, I mapped out 37 races, which, if I play to the end, give or take sayyyyyy, 3 scratches, will give me a profit of around $165, of course, thats if the last horse wins. My Goal, Is to clear $100 a day, so Im looking to play 20 races for the day, give or take

[timtam]

Rus,
Can you give us a sample of a typical day (one you actually used)

to explain your betting progession? If you bet favorites some go off at 6/5

so wouldn't that make your NEXT BET higher than if your playing 6/1.

Also, do you have a stop for the day amount where as you mis a few in

a row you finish and start out the next day? Actually is there a difference

between your progression and due column wagering?

[douglasw32]

http://www.horseracinggold.com/Horse-Race-Betting-Article-9.pdf

the above may help you not tap out

[Warren Henry]

Progressive betting works...until it doesn't. Then it wipes you out.
What he said.

Many years ago, I had software that was quite good for its time. I had studies over a couple of years that showed that my #1 selection had never had more than an 8 race run out. Based on that, I took a rather sizeable bankroll and began to bet progressively. My mentor attempted to talk me out of it, but I knew what I was doing.

Except that I didn't. I quit this experiment after 15 consecutive losers. The bankroll took a HUGE hit.

Be Careful!!

[CBedo]

http://www.horseracinggold.com/Horse-Race-Betting-Article-9.pdf

the above may help you not tap outBetter readings would have to do with the linear qualities of expectation and how no betting systems (including progressive) can turn a long term negative expectation into a positive one. Also, as GT stated earlier, if you already have a positive expectation, this type of progressive betting will not maximize bankroll growth while giving the highest possible safety margin.

[rusrious]

Rus,
Can you give us a sample of a typical day (one you actually used)

to explain your betting progession? If you bet favorites some go off at 6/5

so wouldn't that make your NEXT BET higher than if your playing 6/1.

Also, do you have a stop for the day amount where as you mis a few in

a row you finish and start out the next day? Actually is there a difference

between your progression and due column wagering?

Here are a few days for ya,

http://i37.photobucket.com/albums/e52/rusrious/progressive7-23.jpg

http://i37.photobucket.com/albums/e52/rusrious/progressive7-24.jpg

http://i37.photobucket.com/albums/e52/rusrious/progressive7-25.jpg
http://i37.photobucket.com/albums/e52/rusrious/PROFGRESSIVE7-26--1.jpg
http://i37.photobucket.com/albums/e52/rusrious/PROGRESSIVE7-26-2.jpg
http://i37.photobucket.com/albums/e52/rusrious/PROGRESSIVER7-27.jpg

[rusrious]

Something I'd like to add, is the PT odds changed, and some greatly by PT to end of the race, when the odds settled, and that is why, were some you see minimim bets greater then accual bets. So, Im going to start undercutting like for instance, if it 3/1, im going to make it 2.5 for the log in odds.

Today Im having some teeth pulled, and yesterday, I was is GREAT pain, so I didnt do anything..

I did have 37 races lined up,

L-W-W-W-L-L-L-W-L-W-W-W-L-L-L-L-W-W-L-L-W,

My goal was to make 20 bets, but my 20th was a lose, and the 21st was a win, so I was done for the day.

My goal was $100, which I made..

There is no doubt, this is a dangerous approach, but if you can hit winners with few loses in between, you can recoup your loses, and profit per race.

Like I said, even at $5 per races profit, isnt to bad..

So, in about 8 days, im near $900 profit, betting progressivly.

I'll be back on the grind tomorrow probably, and going to start back at $100.

[dutchboy]

Are the screen shots shown from a computer program you developed or did you buy the software?

Appears to me like you have a good thing going at the same time I get the impression from your posts that you are thinking of changing your selection method.

Unless I have misread what your have written why would you change your plan? None of my business what you do but I am just curious.

[rusrious]

Are the screen shots shown from a computer program you developed or did you buy the software?

Appears to me like you have a good thing going at the same time I get the impression from your posts that you are thinking of changing your selection method.

Unless I have misread what your have written why would you change your plan? None of my business what you do but I am just curious.

Hey Dutchboy,

Im using a program I purchased, but dont know if I can post the seller here..

it was cheap tho..

The reason I changed my selection method, is I pick good horses myself, and get some nice longshots in the mix, I think so anyways,lol..

Even tho, longshots arent really a factor in this meathod, a 6/1 horse comin to the line with 4-5 loses makes the original wage a bit smaller. Rather then having a 2/1 horse going for the cycle after 4 loses can get pricey.. Also, like said by a few, you cant be curtain that a favorite wWILL win, like Delmar yesterday for instance, I dont think a favorite won till like the 9th race..

today, i went like this,

L-W-L-L-L-W-W-L-L-W-W-W-W-L-W-L, AND STILL RUNNING THE CYCLE RIGHT NOW,

[PaceAdvantage]

You can post the seller...no problem...

[rusrious]

OK, cool,

http://horses.systemsthatprofit.com/

Its just a simple Excel sheet, just plug in the numbers

I got it from Youtube, here is that link if you want to watch the video for insight

http://www.youtube.com/watch?v=U0Q3g64GJrM

[Dave Schwartz]

Okay, I purchased it. (For less than $8 I can take a look.)

The spreadsheet has flaws in the formulas. Easy to fix but the odds column needs to be odds+1. In other words, if the odds were 2.5 you should neter 3.50.

Also, many of the cells would not recalc until I re-typed them. Not sure why.

[GameTheory]

Okay, I purchased it. (For less than $8 I can take a look.)

The spreadsheet has flaws in the formulas. Easy to fix but the odds column needs to be odds+1. In other words, if the odds were 2.5 you should neter 3.50.

It is set-up for decimal odds rather than American odds, which is what they use most everywhere else.

[rusrious]

Yes, Game Theory is correct. Here is a link you I use to refer to, Pace,

http://www.the-secret-system.com/oddsconverter.htm

Here is what I did for Charleston tonight.

http://i37.photobucket.com/albums/e52/rusrious/PROGRESSIVE7-30.jpg

[Dave Schwartz]

I know that... but it is designed for the odds to represent odds+1!

[rusrious]

yes, if its 3/1, you put in 4

you need to mess with it, it takes some getting used too..

And, you have to mess with the profits adjustments, you will get he hang of it,...

[GameTheory]

But with Betfair, 3/1 American odds would already be displayed as 4/1 decimal odds, so you'd just put in 4/1 as displayed. (Decimal odds include the stake, and so are odds+1 compared to American.) So there is no flaw -- it is just set-up for entering decimal odds because that is what the target audience in the UK looking at Betfair would be seeing.

Right?

[Dave Schwartz]

Since I don't use Betfair I wouldn't know that.

[rrbauer]

What we have here is the "due" system, part deux! (Pun intended)

[dutchboy]

OK, cool,

http://horses.systemsthatprofit.com/

Its just a simple Excel sheet, just plug in the numbers

I got it from Youtube, here is that link if you want to watch the video for insight

http://www.youtube.com/watch?v=U0Q3g64GJrM

I read the pro's and con's on their website.

Line 1 under pro's of the system is "You make a profit on every race you bet on"

Line 1 under con's of the system is "You need a lot of patience, as you can't win every single race"

[GameTheory]

I read the pro's and con's on their website.

Line 1 under pro's of the system is "You make a profit on every race you bet on"

Line 1 under con's of the system is "You need a lot of patience, as you can't win every single race"He is saying you won't hit every race, but you will profit every race. You profit "retroactively" because you make up your losses by hitting the next race (unless you don't, and then you make those new losses, plus previous losses, on the next race, etc.).

Anyway, it won't work, can't work unless those bets are flat-bet profitable to begin with, which favorites (in this country or any other) are not.

ALL BETTING IS FLAT BETTING.

[Dave Schwartz]

ALL BETTING IS FLAT BETTING.

GT,

Boy, you are right about that.

Permit me to quote an old sage I know from his money management system, HorseMarket Investing:

So what promises can I make? First of all I promise you that this is not a "something-for-nothing" approach to wagering. If you are a player that loses consistently because you are incapable of showing a flat-bet profit, I promise you that you will continue to lose.


However, if one IS capable of being flat-bet profitable, a money management system can improve your lot.


Dave

[GameTheory]

GT,

Boy, you are right about that.

Permit me to quote an old sage I know from his money management system, HorseMarket Investing:




However, if one IS capable of being flat-bet profitable, a money management system can improve your lot.
Yes, absolutely -- it can help your BANKROLL grow faster, but it can't help your ROI. Your ROI is what it is. A lot of people seem to think some sort of magic happens when they start raising and lowering their bets, break things into sessions and sequences, etc etc. And then they look at their results on that basis -- each sequence, each session, whatever -- and they say, look at my ROI, it is through the roof for this session. Of course they ignore their losing sessions as if they don't exist.

Compare apples to apples. If you start betting at $20, and go up to the $100 level, and back down again, and then up again, and then you take profits and reset -- now you're back at $20, then you dip to $10, blah blah. Take ALL those results and put them in a table sorted by bet size -- you'll have some $10 bets, some $11 bets, some $15 bets, some $20 bets, some $30 bets, etc etc. If you have enough in each group, the ROIs of each group will be about the same -- there is no magic way to "bet more on winners and less on losers" unless you know who the winners & losers are beforehand. And the global ROI will of course be about the same as it would if they were all $2 bets. This is what I mean when I say all betting is flat betting. The ONLY way to bet more on winners and less on losers in the long run is to keep raising your bets and NEVER EVER lower them (or even level off) -- you've got to keep raising your bets after losers FOREVER and NEVER RESET. But in the real-world, eventually you're going to lower your bets and you are going to hit a winner at that lower level, and you'll be filling up the slots in your table as above at different flat betting levels. And at each level, as the number of bets for that level grow, your win% and ROI will be about the same in each group. This all assumes your selection method is not permanently trending up or down for some reason. So I guess I have to retract my above statement -- there is one other way to bet more on winners than losers in the long run -- your handicapping must improve every day, FOREVER.

So whether it be HMI or the Opponent Method or Kelly or whatever, you can't change your ROI, period. Not in the long-term. You can make your bankroll grow faster by betting aggressively but not overbetting. And if you find that the ups & downs of that are too much for you, you can use an HMI type system or a mild progressive system to smooth out the ride. But with any progressive system, you just end up lowering your minimums to keep your maximums in line, because there is NEVER a good reason to overbet. It hurts in all situations. And so you raise and lower your bet, keeping in the safe zone (if you're smart), but at the end of the day if you sort by bet size, you'll find all those groups performed the same. And why wouldn't they?


--------------

Ok, now to argue with myself a bit -- there is actually a reason why your groups of different bet sizes might perform differently, but on analysis we find that it is a handicapping issue rather than a money management one. And that is if you let the "edge" of the situation affect your betting size, (which in theory you should, if you can identify your edge for each individual bet). Then you might consistently find yourself betting more on low-odds horses and less on high-odds horses (or vice-versa, depending your handicapping), and then you might find that those two groups do perform differently. So you might find your big bets seem to make profits and your smaller bets don't (or vice-versa). But what is happening is that those two groups now do really represent two different types of selections, and what you need to do there is identify what is really a HANDICAPPING weakness and eliminate those bad bets.

[Dave Schwartz]

Yes, absolutely -- it can help your BANKROLL grow faster, but it can't help your ROI

GT,

I must disagree.

Since you can change the structure of a bet, the resulting ROI can change.

Permit an example...

Suppose you own a casino. In that casino you have a roulette wheel. If a player wagers a color (red or black) they have 18-out-of-38 chances to win. This results in a 5.26% advantage for the casino.

Suppose that the casino installs a new wager called "color parlay" where you can wager on red or black but it must come up twice in a row to win, and the payoff is 3/1. That is, if the player wins a $1 bet he gets back $4, of which $1 was his.

Please compute (and illustrate) the casino's ROI on this wager for me.


Dave

[GameTheory]

GT,

I must disagree.

Since you can change the structure of a bet, the resulting ROI can change.

Permit an example...

Suppose you own a casino. In that casino you have a roulette wheel. If a player wagers a color (red or black) they have 18-out-of-38 chances to win. This results in a 5.26% advantage for the casino.

Suppose that the casino installs a new wager called "color parlay" where you can wager on red or black but it must come up twice in a row to win, and the payoff is 3/1. That is, if the player wins a $1 bet he gets back $4, of which $1 was his.

Please compute (and illustrate) the casino's ROI on this wager for me.

Sure, you can change the ROI with a totally different wager. Just as you can change your ROI by betting exactas or parlays instead of win bets. Of course. Those are different wagers with different risks and different payoffs. Apples and oranges. And I agree with you (even if you didn't bring it up here) that you can "create your own wager types" -- you aren't restricted to what the track offers you. But you're still making up a new wager, with a different probability of winning that wager. That's not what I'm talking about. HMI, Opponent Method, Kelly betting, Progressive betting on favorites as above -- all of them assume you've got a bet you want to make, they just tell you HOW MUCH to bet on it based on your current bankroll, what happened last bet, etc. What I'm saying is that none of those methods are going to change your ROI -- the ROI will be the same with any of them given the same series of base wagers as long as the sample is big enough. You can't change your ROI on the same wagers by altering your bet size depending on wins or losses (or for any reason), or with any *betting* scheme.

But if you change the RISK involved in whether you win or lose (not monetary risk, but the probability of winning), you can also change the REWARD. That's different.

[Dave Schwartz]

I am glad to see that you agree with the above example.

Many supposedly learned people do not.


And "changing the risk," as you so succinctly put it, is precisely what a good money management scheme does.


Dave

[GameTheory]

I am glad to see that you agree with the above example.

Many supposedly learned people do not.
Many supposedly learned people use their supposed learnedness as an excuse to stop thinking.



And "changing the risk," as you so succinctly put it, is precisely what a good money management scheme does.I think we need a new term for that -- risk profile management or something. (Another sign this area is underdeveloped -- fuzzy terminology.) It is quite apart from money management as I see it. You could make up those new wagers with different risk/reward profiles and still only bet $2 on them (or some small minimum depending on what the wager allowed) and still see the benefits of that alternative wager. What you're really doing in that case is using an advantage and LEVERAGING it so you get more bang for your buck -- like a parlay does (assuming you've got edges on the component win bets). You don't even need to discuss money directly to talk about risk profiles -- you talk about probabilities and rewards in the form of altered odds (money indirectly).

Whereas money management is about money -- how much are you going to bet in this situation -- the situation being defined by the parameters: current bankroll, probability of winning the wager (however the wager is defined, and no matter if it contains multiple components), and the odds (odds maybe actually impossible to precisely know in many cases, but an estimate anyway).

[sjk]

If you bet more on the races where your edge is greater than on the ones where your edge is less you will increase your ROI.

For example if you sit at the blackjack table counting the cards but make flat bets you will have a negative expectation but if you use the count to adjust the bet size you can have a positive expectation.

[rusrious]

Great insight,

But does a handicapper EVER have the edge? How would one truely know?

[sjk]

If you are on the right track after thousands of races bet the larger bets should be giving you a better ROI than the smaller bets by a significant margin.

[positive4th]

If you are on the right track after thousands of races bet the larger bets should be giving you a better ROI than the smaller bets by a significant margin.

why??? They might give you more $$$, but the ROI should be constant......your return is the same, regardless of how much you bet, b/c the odds determining your ROI are the same whether you bet 2, 200, 2000, or 2 million

[Dave Schwartz]

What you're really doing in that case is using an advantage and LEVERAGING it so you get more bang for your buck

GT,

Exactly!

If it doesn't fit into the strategies of Tsun Tsu it probably won't fly in the long run anyway. <G>


Dave

[positive4th]

why??? They might give you more $$$, but the ROI should be constant......your return is the same, regardless of how much you bet, b/c the odds determining your ROI are the same whether you bet 2, 200, 2000, or 2 million

obviously 2mil is an exaggeration as you'd depress the entire pool with that

[GameTheory]

why??? They might give you more $$$, but the ROI should be constant......your return is the same, regardless of how much you bet, b/c the odds determining your ROI are the same whether you bet 2, 200, 2000, or 2 million
He is right in the sense that the wagers you label "big bet", if you are doing so because of a greater edge, will have a greater ROI than your smaller edge bets, but that's because those two groups have a different expectation to begin with, not because of any bet sizing tricks or progressive wizardry. It can all be boiled down to the phrase:

THERE IS NO SUCH THING AS A FREE LUNCH.

[sjk]

why??? They might give you more $$$, but the ROI should be constant......your return is the same, regardless of how much you bet, b/c the odds determining your ROI are the same whether you bet 2, 200, 2000, or 2 million

I see that Gametheory has already answered your question addressed to me. My statement probably only makes sense if you had read my comment on another thread that I scale my bet sizes based on a couple of factors one of which is the edge I believe the bet provides.

If I am correct that the larger bets have a larger edge (expected ROI) than the smaller ones after a significant number of bets the group of larger ones should appear to be from a different statistical population than the group of smaller ones and that should show up as a larger actual ROI.

[positive4th]

I see that Gametheory has already answered your question addressed to me. My statement probably only makes sense if you had read my comment on another thread that I scale my bet sizes based on a couple of factors one of which is the edge I believe the bet provides.

If I am correct that the larger bets have a larger edge (expected ROI) than the smaller ones after a significant number of bets the group of larger ones should appear to be from a different statistical population than the group of smaller ones and that should show up as a larger actual ROI.

yeah, that makes sense, and I didn't see the other comment.......I just wasn't able to see how betting more = a higher ROI, but you're right in the sense that the bigger bets should theoretically be made with a bigger edge and hence they return more per dollar.

[castaway01]

I'm glad someone brought back this old thread...great posts here guys.

[Space Monkey]

4 year old thread. Lets go back to the basic question. What is the best book available NOW on Money Management?

[Dave Schwartz]

Rarely to I beat the drum of my own products here, but for that question I have to say that HMI is the best I have ever seen.

I have actually been working on some new twists and and may re-write it to take into consideration rebates and simulcasting (which has the potential for so many plays).


Regards,
Dave Schwartz

[pktruckdriver]

Rarely to I beat the drum of my own products here, but for that question I have to say that HMI is the best I have ever seen.

I have actually been working on some new twists and and may re-write it to take into consideration rebates and simulcasting (which has the potential for so many plays).


Regards,
Dave Schwartz

As some one who bought it, Dave is right, his system is worth looking at, it is simple and easy to understand, and that from someone who used it briefly.


Patrick

[GameTheory]

As some one who bought it, Dave is right, his system is worth looking at, it is simple and easy to understand, and that from someone who used it briefly.
I actually prefer Dave's other one -- The Opponent Method. Using HMI, I found myself moving this to that, taking from reserve, updating columns, whatever, and then ending up with the same bet all the time plus/minus a couple of bucks. It was very complicated flat betting. You'll get different results with different parameters, so that might not be the case with you.

What I like about the Opponent Method is it is real simple (with a spreadsheet) and it makes it real tough to lose if you are at least breaking even flat betting. Good for high-volume selection methods that only eek out a few points profit -- straight percentage betting or parlay methods tend to take you on an unpleasant journey with those.

[Robert Goren]

The real question is How is Rusrious doing?

[Robert Goren]

Since I have a hard time passing a race(there is at least one winner in every race), I have this little system. basic bet amount X the square root of the odds. That way I don't bet too much on the 3/5 shot but have a decent bet on the 8/1 shot I like. It seams the better price horses I like win just about as often as the short priced ones. The problem is just don't like very many long shots.:bang::bang: :bang:

[DanG]

I actually prefer Dave's other one -- The Opponent Method.
Agreed; it’s excellent. Even if you don’t wind up using it verbatim; it can get you thinking in terms of a hybrid approach that will fit your needs.

[castaway01]

4 year old thread. Lets go back to the basic question. What is the best book available NOW on Money Management?

You think money management changed that much between 2005 and 2009, or 1985 and 2009? These are some of the sharp guys on the site in this one, you can learn something here. Don't troll---use common sense and read.

[Space Monkey]

Castaway, I'm an older guy and I admit I'm not totally up on all message board vernacular. I do know that a troll is someone that basically attacks a person or an idea on a thread with nothing positive to say. They hit and run using insults as their main form of expression. When they are identified they are usually warned by the moderator and then banned if they continue. What I meant by my question was if there were any new or current books on the subject. Castaway, I do believe that people can come up with new ideas. New theories. How do you know that I didn't read the thread and haven't read any of the books suggested?

I submit to you, Castaway, that if there is a troll on this board, it is you!!

[Space Monkey]

PK, I read your posts with Dave over your experience with his program. I commend you for your honesty. You seem like a pretty stand-up guy. I attended one of Dave's Webinar's and am intrigued by his program and strategies, but like I told him, I don't have the time to devote to his high hit/low profit, multi win bet approach. In a few years , when i semi-retire, maybe, but right now I want more excitement in my play. I guess what I'm saying, is unless I'm missing something, Dave's books aren't what I'm looking for. Correct me if I'm wrong.

[rusrious]

The real question is How is Rusrious doing?


Heyyyy, doing great.. Been very busy with my side job, so had to step away for a few days, or week,lol.. Going to hit full stride probably Monday. Got the plan, got the numbers Im looking for, and ready to get that money.

Ive fine tuned my picks, 16 races yesterday, 8 wins, 3 place, 2 shows, 3 scratches, 0 loses.. That includes a $17.80 win at Fingerlakes, a $10.00 win at Suffolk, Just dont have the time right now, to progressively bet, because of time restraints. Im very confident with this angle, cant wait to pick up steam..

Keep an eye open, I will be posting picks, and results for the angle, probably for only a week or so..

Great luck today

[punteray]

I have coded 3 programs of interest. The first is a stand alone 'dutching/hedging' program. The second one is a stand alone BB+SR(Base Bet + Square Root) concept Douglas32 referred too. The third is a combination of the first two with the BB+SR modified to accomodate dutching, and it is the only program I Know of that allows money management for dutching 2 to 4 horses.

These programs are FREE for the asking, all that I ask is that you make a small donation to a Cancer Society of your choice. (I have cancer)

Send your requests to : punteray@yahoo.com

[Niko]

I haven't read this whole thread, busy with other stuff but this may be or may not be of help to you.....


http://www.paceadvantage.com/forum/showthread.php?t=58916

[Triopstor]

Hello Rusrious and others,

I'm willing to look deeper into the "Rusrious" staking plan. Could be very useful to use for say 10 days to make $1000.00 and then re-start at a lower 1/10th or $100.00 stake again. And repeat the process ever 10 days or every $1000.00 made. Thus if a total wipeout occurs $100.00 is lost but hopefully $900.00 is still around to try another 9 times. Needs paper testing.


Some matters I don't understand about the "Rusrious" staking plan:

1. Why on certain days did Rusrious keep wagering when the daily 25% profit was already made? I have a guess but rather listen to Rusrious' reply.

2. I would like to know why Rusrious didn't go for the full $42.00 and $33.00 wagers? But rather wagered $21.00 and $19.00 instead?

3. I don't understand why Rusrious is eye-balling to wager 20 to 37 races a day in terms of making $5.00 per race profit? Ie. you need $125.00 profit so that is eye-balling 25 races for the day. I thought this is a progressive tactic that keeps increasing till 25% daily profit is made?