Stake to value and confidence. Not price.
Why betting solely based on odds is fundamentally wrong
When it comes to day-to-day betting, here’s one line of thinking that punters commonly employ…
If they’re considering a bet at a big price…
Then the chances are it’s much more likely to lose, than to win…
So they put a smaller stake on that particular player/team/horse or whatever.
Why? Because they’d rather take a £20 hit on a losing bet than £100.
Now that’s a perfectly plausible argument to put forward, and we can all understand why it’s human nature to err on the side of caution when it comes to backing what might be considered “speculative bets”.
And, let’s face it, who hasn’t at some point in their life had a reduced stake bet – a cheeky fiver or a £10 flutter – on something they fancy, but can’t resist, at a big price.
It makes sense. And if you were to ask any sample group of punters down the bookies: “Would you bet a smaller amount on a 6/4 chance than a 25/1 shot?” … the vast majority would surely answer in the affirmative.
But is this the right thing to do?
Or, in other words, does this kind of proportional staking generate bigger or smaller long-term profits.
This is something I’ve heard argued about in betting circles for many years.
Should your bets be staked on a sliding scale?
Many moons ago I worked with a highly successful golf tipster. Someone who regularly advised bets in the Tournament Winner market at odds ranging from, say, 16/1 right up to 200/1 and beyond.
And he had some pre-decimal, quasi-Dickensian, staking plan that was half a point on this, a quarter point each-way on that… a two point saver here, a six-and-a-half point win there.
It was all over the place! And it became a weekly exercise in O Level maths (GCSE’s in modern money) just to settle the bets.
But more importantly, over the course of time it became apparent that the breadth of the staking plan – 0.5 point up to 10 points if memory serves – was being utilised pretty uniformly along the lines of price.
Shorter priced golfer = bigger stake, bigger priced player = smaller stake.
And this got me thinking, back then as it does to this day, about how and why he staked in this way (as many punters still do now).
Now we can all understand the argument that a shorter priced player is statistically more likely to win, or place, than someone at stratospheric odds.
And therefore, the application of this brand of logic would say that your (bigger) stake is at less of a risk.
I get that. Makes sense.
But study those words more carefully…
“Your stake is at less of a risk“.
This statement is concentrating on just one of the two potential outcomes (losing) that can happen when you place a bet (what about winning?).
And remember… betting is more about winning, than it is about not losing!!
What this means in terms of staking
Another betting mantra that was drilled into me during my early years in this business is “you make more profit with big stakes on big-priced bets, than big-stakes on short-priced ones“.
The point being…
When one of these large odds bets wins, and you land the mother-load, these winnings will far outweigh any similar, or even bigger, or more frequent, stakes that you have on much shorter priced bets.
Example… £50 win on a 6/4 shot returns £75 profit. Same stake on a 16/1 shot makes for a £800 pick-up.
But stake “conservatively” and you could easily see someone place just £5 or £10 on that 16/1 chance… and if they do, they’ll collect barely more than a much stronger staked 6/4 winner. Totally negating the value of that big-priced success.
[It’s a bit like some staking systems which suggest you back all bets to win the same amount of money e.g. £100 on something at evens, £50 on a 2/1 shot, £10 on a 10/1 chance… never something that’s appealed to me, I must say]
And this is the point that always troubled me about proportional staking plans, and the practice, conscious or otherwise, of placing your smallest stakes on your biggest priced bets.
It undermines, nullifies and negates the earning power of backing big-priced winners. To the point where the hugely positive impact on your betting bank (the key consideration when it comes to betting) is lost in the wash.
A big-priced winner should sustain your betting, and bolster your reserves (let alone your confidence), to the degree that it keeps you going for months – even if you then encounter any losing spell. It shouldn’t be the case that a 50/1 winner merely funds a handful “lumped on short pokes” before all those gains are swallowed up.
And they will be if you stake very small on big priced opportunities, and bet-the-farm on the skinny ones… which always win – yeah right!
So is this an argument for level stakes betting?
Well, again for a long time, the acid test of any successful betting service has been whether it can cut the mustard at level stakes.
Strip away all the fancy staking plans – ratchet, double-down/up, the 5% rule, Martingale, Fibonacci, Kelly criterion – and just put the same stake on each bet (whether win or each-way). Then see what the results show.
And if a service can make it work on these terms, then it’s not half bad.
But of course what this method of staking would produce, is bets at 6/4, or 16/1, or even 100/1+ in the case of golf betting where the odds are frequently much higher than in other sports, all being backed to the exact same monetary value.
Apply this line of thinking to the “short odds/big stakes, big odds/small stakes” model outlined above, and you have an interesting twist…
Putting the same £100 bet on a horse at 6/4, 16/1, or 100/1… are you over-staking the bigger priced bet, or under-staking the ones at shorter odds?
Depends on which way you’re looking through the telescope!!
Because to some, working backwards from a £100 stake on a 6/4 chance, would mean putting something like £5 on the 100/1 shot…
But conversely, if you have £100 on a bet at 100/1, that should mean you’ll be pawning the family silver to cover a bet at 6/4!
And this is how proportional staking can tie you up in knots.
Undoubtedly, consistently backing to level stakes will supercharge your profit potential whenever these bigger bets come in. However, this is provided you can stomach the proportionately larger impact these bigger priced bets will have on your betting bank (as they are staked as heavily as the shorter ones, but as their price suggests, they will win less often).
Can you handle this in the pursuit of what we all want – bigger betting profits?
Some possible workarounds…
Overall I do advocate betting to level stakes.
For sure, there is an art to staking, and a skilled operator can turn an average set of results into a very profitable group by a subtle manipulation of the staking.
But I still view a set of results shown to level stakes to be an illustration of a tipster’s true colours with all the frippery stripped away.
So if you wish to follow the same path, one option would be to look at the overall performance of a service, calculate what their average stake is, and use this as your level stake marker.
What this will do 9 times out of 10, is raise your staking on the bigger prices bets and lower it on the shorter priced ones (because despite my protestations, you’ll find most services still bet proportionately in this way).
Just look at the longest losing run, and their biggest drawdown, and calculate what is a reasonable level stake relative to your funds (which is usually the maximum drawdown times two or three).
If you select bets for yourself, stake your bets according to value (even confidence) and not price. So the same value = the same stake, whether it’s a 5/1 chance or 50/1.
And this would be my clear advice…
Have the resolve to put the same amount on any bet that carries the same amount of value and/or confidence.
Now these tactics can make your betting more volatile, and see you bank size move rather more markedly. But the chances are, given a profitable set of figures, the long-term gains will be more than if you adopt a graded, or proportionate, approach to your investment.
And at the end of the day, aren’t bigger profits what we’re all after?
OPINION: The study of staking is a fascinating pursuit, and as mentioned above, a clever staking strategy can make a silk purse out of a sow’s ear. However, what most good staking systems or plans require is a degree of faith in the process, and the bottle to stake what is asked for, whenever it is demanded. And that can mean big stakes on big prices (bets which many punters, typically, stake to smaller amounts). But the point is, if you under-stake any winner, however big or small the price, you run the risk of failing to reach your ultimate goal – which is a long-term profit.