| Most gambling systems fail to produce | | | | |
| positive returns on investment in the long | | | | Position sizing - Percent risk model |
| term, this is mainly down to human psychology | | | | |
| and no real strategy. In this article I will | | | | When you enter into a bet you divide you |
| discuss position sizing and anti-martingale | | | | gambling pot by a % factor, this is then your |
| strategies that will assist and help you make | | | | stake at which you back a horse, If you are |
| a long term profit. | | | | laying a horse this is the maximum you can |
| | | | lose so you need to further divide by the |
| It doesn't matter if you are gambling in | | | | laying odds. |
| horse racing, investing in stocks or day | | | | |
| trading forex you will need to manage your | | | | Dependant on your appetite for risk and the |
| money pot with a position sizing strategy. If | | | | amount you want to win. You will first need |
| you apply this correctly and your desired | | | | to decide a percentage risk, I recommend |
| punts are coming in your money will grow. If | | | | anywhere from 0.25% to 1.5%, this may seem |
| you have no position sizing then you are | | | | quite low, but it ensures long term survival |
| doomed to failure. | | | | |
| | | | Example for backing a horse: |
| What is position sizing? | | | | |
| | | | I have a gambling pot of $3000 I have |
| Position sizing in its purest form can be | | | | determined that for every bet I take I will |
| divided into two areas, martingale or | | | | only risk 1.25% of my money pot |
| anti-martingale, Most casino gamblers will | | | | |
| probably have tried to use a martingale | | | | So my first bet will be 3000/100 x 1.25 = |
| strategy without even realizing it. | | | | $37.50 |
| Martingale strategy increases your bet size | | | | |
| if you are losing, anti-martingale is the | | | | Luckily my first bet came in and I made $150 |
| opposite and you increase your bet size when | | | | profit, so my second bet would now be 3150 |
| you are winning. One works the other is a | | | | 100 x 1.25 = $39.4 |
| total disaster.. guess which one? | | | | |
| | | | Simple, all you need do is divide you pot by |
| Martingale example: | | | | 1.25% for each bet |
| | | | |
| Any game of chance will have losing streaks! | | | | Example for laying a horse: |
| | | | |
| Joe punter places a $1 bet at 2.0 decimal | | | | I have a gambling pot of $3000 I have |
| odds to win, on the horse windjammer at | | | | determined that every bet I take I will only |
| Lingfield it loses he then doubles up and | | | | risk 1.25% of my money pot |
| places a $2 bet on the horse tabadul, this | | | | |
| also loses. Joe continues his unlucky streak, | | | | So my first bet I will risk 3000/100 x 1.25 = |
| doubling up as he goes on. His losing streak | | | | $37.50 |
| is now ten horses, he has to place a $2000 | | | | |
| bet to just win his original $1, that's right | | | | My lay bet odds are 9.0 decimal (8/1) so my |
| he has to risk $2000 to make a dollar. | | | | betting stake will be $4.69 (37.5/8) giving |
| | | | me a bet liability of $37.5 if my bet is |
| To make matters worse Joe is running out of | | | | unsuccessful |
| time as the horse racing track is going to | | | | |
| close and also the horse racing tracks | | | | My second bet will now be 3004.69/100 x 1.25 |
| betting maximum limit is nearly hit! | | | | = $37.56 etc |
| | | | |
| See the problems, as a result Martingale | | | | Benefits of a percentage risk model |
| strategies in the long term do not work | | | | |
| | | | Allows for small and large betting accounts |
| Anti-Martingale strategies do work however, | | | | to grow steadily it also equalizes |
| they call for a larger risk to be taken when | | | | performance by the actual risk. |
| you are on a winning streak! | | | | |
| | | | Finally the percentage risk model is |
| Position sizing systems that work whether for | | | | recommended as the best possible position |
| gambling, trading or investing are based | | | | sizing model for long term trend followers. |
| around increasing your position size when you | | | | It gives all bets equal risk and gives a |
| are winning and making money, and decreasing | | | | steady growth to your betting pot. |
| your position size when you are losing. | | | | |