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