Fixed %
Minimum Betting
- A proposed betting approach
Perhaps the prime objective for a
horse race bettor
serious about reaching professional status should be . . . finding out how
to best handle losing streaks. Any valid long-term money management
method must take this extremely important factor into account.
The "Kelly"
betting method (to be discussed another article) is optimal for increasing the bankroll during a positive
series of wagers where winners are numerous enough to have produced a flat bet
profit; however, the same method can decimate a race bettor's hard-won
profits during even short losing streaks.
The most used of all
horse betting approaches is
likely the "Fixed Percentage" approach. This is where a fixed
% of the race betting bankroll (example - 4%) is always used to figure the next bet
amount. This approach (which essentially will become "flat
betting" when a 'comfort-level' ceiling has been reached) somewhat smoothes the more radical bankroll
gyrations of the Kelly approach, but it also still cuts deeply into bankroll
profits during losing streaks.
I believe it was James Quinn who, about 20
years back, wrote about a method he called, "Fixed Percentage -
Minimum." This is one of the better money management methods for
lessening the often devastating effects of grouped clusters of losses - i.e. the
dreaded, yet inevitable, losing streak.
A warning: The F%M method performs very
poorly when you are in an alternating pattern. A pattern like this:
w,l,w,l,w,w,l,l,w,l,l,w. But because most players don't come close to hitting
45-50 % of their win bets, for this pattern to last over an extended series
of wagers is rare. The usual win/loss patterns for most players most of the
time settle into clusters of (smaller) groups of wins and (larger) groups of
losses.
Why the F%M method performs poorly in the
alternating pattern runs will become apparent. Here are the
betting "rules" -
You will bet a fixed percentage
of your starting bankroll after every winning race - but you will bet only a
non-changing base amount after every loss.
Let's say you set your fixed
percentage at 5% - that also becomes the non-changing base bet. If your starting
horse betting bankroll is $1000, your starting bet, and
your un-changing base bet then becomes $50.
So you can get a better idea of
this approach, below is an example of the method applied to a series of 15
races. Gold numbers are the races where the base bet minimum was
used after a loss:
