Bet size?

[jackad]

A number of recent posts have referred to a bet size of 2% of bank. If you bet to win, what is your standard bet size as a percentage of your betting capital? Do you deviate from this standard, up or down, depending on your evaluation of a particular race?

Jack

[Bob Harris]

The percentage of one's bankroll which can be safely wagered obviously depends on your hit rate but if you're a "value" bettor, 2% of total bankroll would be financial suicide.

Most traditional "value" bettors who are betting horses in the 5/2 and up range and are playing 3rd and 4th choices if the odds warrant, will usually come in at the end of the month with a win percentage between 14-18% and will have experienced 20+ race losing streaks on occasion. When the racing gods are really cruel, something like an 0/20, 15.00 winner, and then an 0/15 type sequence will hit. Not only would a huge percentage of your bankroll be gone, mentally you would be a basket case and find placing wagers on long priced horses increasingly difficult.

The only way I could ever see playing "value" at the 2% level would be if your bankroll was broken up into sessions...I know Dave has written about session betting in the past and it's actually one of the better procedures for taking advantage of hot streaks without tapping out completely.

For those of you with profitable angles which hit in the 20-30% range, 2% might be perfectly safe...I personally have only seen those type of winning percentages from selection oriented players and since I don't play that way, I will defer any betting advice on that style to those who do it.

[Rick Ransom]

The safety of a percentage (Kelly) money management system is proportional to the odds, assuming the same ROI. So a 2% bet on a 3-1 horse would be as safe as 1% bet on a 6-1 horse. The catch is that it's a lot easier to find 6-1 overlays than 3-1 overlays. You'll almost never show half the ROI on the 3-1 method as you will on the 6-1 method, so you'll make less money even though you can bet twice as much. Your losing streaks will be shorter but they'll involve the same amount of money. And your system or method that did so well in the past is much more likely to win in the future if it's the 6-1 type.

Every winning player I've personally known was winning using low percentage spot plays before they were able to win with higher percentage methods. And if they went to higher percentage methods, they had to accept a lot fewer plays in order to maintain a high ROI. Usually this was accomplished by playing a large number of tracks.

Varying bet size is not a good idea in my opinion, because it assumes that you have a very accurate measure of the probability of the horse winning. Usually this is not the case unless you also include actual odds themselves in the calculation, which is difficult to do even approximately under today's conditions. Most player's ROI will go up with the odds of their selection anyway, which balances out the increased risk you're taking by betting on longer odds horses.

So, I'll repeat something that was said to me once a long time ago: "It ain't rocket science". At the time it irritated me because I'd spent a lot of years doing scientific simulation and thought it was just the usual anti-technology comment from somebody who didn't undestand things. But, it turns out that the real world isn't as precise as we'd like it to be, so the comment does have some truth to it.

[anotherdave]

I start with $10000. I rarely get below $8000 during a meet, so it is just in case. I bet $100 flat win bets. On special occasions - a horse I've been waiting for that I have supreme confidence and good odds, I double the bet to $200. That happens about twice a week. Otherwise it is $100. Even if my bank goes up, I stick with the flat bet. The reason is that this number is the top of my comfort level. I go above that only when I have a great deal of confidence. I used to fiddle with it and bet $50 or $75 on marginal bets, but I decided that if a horse is a bet - it's a bet. And by making that number ($100) a reasonable sum of money, it forces me to think seriously about whether to bet or not. This avoids me chasing bets that are losers.

[Rick Ransom]

anotherdave,

I totally agree that you shouldn't be fiddling with your bet size all the time. Sometimes you have a big edge for a while, then a lesser or no edge later. If you increase your bet size you could be betting more when you should be betting less. The opposite could also happen where you're betting less when you have more of an edge. When I increase my bet size I consider it the same as starting a new bankroll.

[so.cal.fan]

Rick,
What about starting each new meet with a standard flat bet and then increasing if you are winning? Say, 10% of your profits?
If you are going real good, you could get up to your "goal" flat bet real quick. If you are not, you minimize the loses.

[andicap]

There's a good post on the HTR board about low-scope progression betting. Wondering what people think about it. Instead of doubling your bet you increase it in increments of $2.

[Rick Ransom]

so.cal.fan,

I like your idea, because the riskiest time is when you start a new meet. Even if you have done well in the past at the track, they might have drastically changed the surface. Also, it seems to me that the first week and the last week of every meet seems to be riskier for me. Not necessarily worse, just more variance; really good or really bad.

I'm not sure what the percentage should be though. I think the best thing to do is experiment with your own past results and see what works best. Some methods are streakier than others and some are more affected by different track conditions.

I'd also like to develop a good objective rule for when to get off of one track and try another if things aren't going well. I'm switching from Del Mar to Saratoga right now because the first couple of weeks weren't as good as they usually are at Del Mar. Based on historical data though, I may be making a mistake because Del Mar has been awesome for me the previous couple of years. It's nice this time of year to have so many good options though.