The best horseracing betting systems (Part 3)
What are the best ways to successfully stake your bets.
Now is the turn to discuss what are the most aggressive (some would say reckless) of all staking models.
They come under the collective term of “recovery staking“… but as we’ll see, one’s recovery is far from assured with these weird and wonderful staking strategies.
When it comes to this type of staking (“recovery” betting)…
The principal factor which determines your stake seems to be whether you’ve won or, more likely lost, with your previous bet. Nothing else matters.
Price. Value. Bank size. In profit. Losing.
And starting this section with the martingale staking plan we have probably the best known of these recovery methods, and the one which attracts the most comment.
Good or bad press aside, what you can’t criticise this method for is being overly complicated. It’s simple… very much so!
Basically, your stakes will double after every loser, in order to win back previous losses (i.e. recovery) with interest…
e.g. your notional starting bank is £1,000, and your starting stake is 5% (£50)
↪ the first bet loses, which makes for £1,000 – £50 = £950 balance
↪ next bet is double the stake of the previous bet (£100), and it loses = £850 balance
↪ so you double-up again, to a £200 stake, and another loser = £650 balance
↪ next stake is double (again!) at £400, but the horse wins at 6/4 (2.5) = £600 win
↪ new balance = £1,250
↪ then revert back to 5% again, staying at this level should you win, but doubling-up on the next bet if you lose
As you can see in a sequence of just four bets, had that 6/4 shot not won, then an initial starting bank of £1,000 would have stood at a mere £250.
Not only would 75% of your original balance be lost, in the blink of an eye, but how would you have funded your fifth bet?
Yes, you could stretch this time period by betting to just 1% or 2% of your bank, it’s a fair point. That said, most backers will have losing runs of, say, 6 bets, maybe 10. Every now and again a horror run of 12, 15 or 20 (depending on prices).
And then you’re in big trouble!!
This is the biggest issue (of many) with the martingale staking plan, the rate it will burn through your bank when you hit a losing run. And you will.
It also can require huge amounts of liquidity, or unrestricted bookmaker access, not to mention nerves made out of industrial-strength steel.
No wonder this staking plan was borne out of a simple roulette strategy (betting on red/black, where the odds are 50/50)… and of course we all clean-up every time we hit the tables, don’t we?!
But despite all this negative press, the martingale method does have one hugely important role to play in the whole discussion of staking plans… it shows us how not to do things.
Fibonacci Staking Plan
Here we have another recovery staking strategy, like martingale, where the principal factor in determining your stake is whether the previous bet won or lost.
And, again, a loser will mean an increase in stakes…
Whereas a winner will see your stake decrease on the next bet you place.
The essence, or attraction, of this approach is that you make-up lost ground quickly, and recover your losses, by staking larger amounts. Thus minimising the length of time you’re in deficit… provided your funds will allow!
Now if you’re a history or mathematical scholar, you’ll know that Fibonacci (aka Leonardo Bonacci) was a 12th century Italian who devised an ascending number pattern which came to be known as the “Fibonacci sequence” – basically where each number is the sum of the two previous numbers.
It goes: (0), 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144…
And this progressive series of numbers is reflected in the Fibonacci staking plan.
e.g. your notional starting bank of £1,000 split into 100 points (£10/point)
↪ so your first bet is staked at £10
↪ this loses, so your second bet is also staked at £10
↪ another loser, causing your stake to rise to £20
↪ a fourth loser makes the next stake £30
↪ the fifth bet loses (this is getting serious!), meaning your next bet is £50
↪ then a winner… relief, and the sequence goes back to the start
Now there are several variations to this strategy. And betting to £10 units, by the time you’ve had 6 or 7 losers on the spin (which can happen), then you stakes quickly become £340, £550, £890..!
Some versions don’t have a double, single point stake to begin the sequence (they simply start 1–2–3–5–8–13–21).
Others state that you only follow the sequence up to 21, and at this point you “max out” and maintain this staking level, until you hit a winner.
There’s also a variation which states that after a winner you don’t go right back to the start of the sequence, you simply go back two places in the series – so after the £50 winner in the above example, your next stake would be £20.
But whichever way you follow the Fibonacci strategy, the essence of the plan is broadly the same… stakes increase when you lose, decrease after a win.
Where this method wins over, say the martingale system, is the rate of growth in your stakes appears more controlled – well, slightly! So it’s not as quick, and should you hit an inevitable losing run, then your funds won’t diminish quite so fast.
Then you hit a winner, and you’ll make up a lot of ground quickly.
It still must be pointed out that being a recovery plan, a user’s success or failure will depend on their bank size, ability to get-on, added to their mental fortitude when things don’t go quite according to the script.
Retirement Staking Plan
The common problem with the likes of martingale and Fibonacci is the seeming avalanche of stakes once a losing run is encountered.
Staking becomes, or seems to become, borderline desperate in terms of recouping losses as quickly as possible.
So there’s the need for a strategy that puts more of a premium on stake retention, and a more measured way of retrieving any losses… and so building profit.
This is where the retirement staking plan comes to the fore.
Yes, it’s based on a recovery model, but the way in which it aims to manage your funds is less severe, and more controlled, than the other methods previously highlighted in this section.
It was devised by Barry Hughes, an Australian racing analyst, and is designed to be a staking model that has plenty of depth (i.e. it can withstand a lot of losers) but still come up with a profit if the performance of the results remains constant.
And this is a link which explains the plan in some detail.
So how does it work?
To paraphrase Barry’s own words, there are three components at work in this method.
(i) Your “stake”. Let’s pretend, given other nerve-shredding recovery systems, that here we’re betting conservatively to 1% of our bank figure.
(ii) Your “divisor” (the average odds of the winners you back, or in the data/service you’re following).
(iii) Your “target”. This represents your stake multiplied by your divisor.
The first bet of the plan is always standard, this is 1% of your betting bank.
Then, ongoing, your stakes will always be determined by the “target” divided by the “divisor”… and if you’re in profit, stakes revert to the level of your opening stake.
Seem complicated? Well, it is a little bit when compared to other plans.
But it becomes more readily understood when you see the numbers worked out with a series of actual bets.
So in practice, we’ll use the example that Barry uses, where the average price of your winners is 3/1 and so the divisor, being double this figure, is 6. His bank figure happens to be $10,000 AUS.
You’ll see the starting stake is $100 (1% of 10,000) and the target is 600 (which is 100 x the divisor figure, which is 6).
And as the first bet loses, the second bet target is re-calculated, adding on the previous losses.
So with a run of losers to start… the target gradually rises 600–700–815–950–1108 and so on as the stakes (100–115–135–158…) gradually increase.
And then when he has a winner (finally!) the profit from that bet 860 (215 stake at 4/1) is deducted from the target (2583 becomes 1723).
Then, after a couple more winners, his betting bank returns into profit.
Now there are a couple of caveats to this plan.
If you go the same number of races/bets as your divisor, without backing a winner, you add “1” to the divisor figure for each subsequent loser (this has the effect of keeping your stakes level after a certain point, and not increasing them exponentially).
So in the table, after 6 losers you’ll note the divisor start to rise 7–8–9–10–11–12, until a winner is backed and the target figure drops.
And if you back a winner, but it doesn’t win you enough money to reset the target (i.e. to return your account to overall profit, or below the original target level) you deduct the profit from the winner from the previous target, and recalculate on this basis – so 2583-860 = 1723.
But note… the divisor figure you will now use corresponds to the same number you employed when your balance was at the same level to what it is currently showing, in the illustration above it drops from 12 back to 8.
Also, when your bank increases by 2% you increase your target figure, which acts as another long-term safeguard.
That’s about it.
Now I have to say, the staking plans outlined so far in these articles, whether cautious or cavalier, have all been pretty straightforward to understand.
The retirement plan seems to represent the first time a staking plan requires an amount of thought! Not to appreciate it’s pro’s and con’s… but simply to comprehend how it actually works in practice. Because it is a little tricky, certainly at first glance.
Admittedly, the plan has been written up in several quarters as being a good way to preserve funds (apparently it can go 48 losers before it breaks the bank), although not necessarily a great way to generate them – and on studying the method, this could be viewed as fair comment.
Hughes himself says the plan, crucially, takes into account the average price of your winning bets… and its these odds which will determine what kind of losing run you will be susceptible to encountering. Vital to any staking plan you ultimately choose to adopt.
The illustration above shows 16 bets and a profit of $172.
The same 16 bets backed to $100 level stakes, for example, would break even.
So like it or not, consider it too fiddly or a tad over-complicated, there’s enough evidence here to consider it as more than just a very slow way to not lose!
d’Alembert Staking Plan
We’ve already seen the application of the working of one famous mathematician (Fibonacci), and here we have another example.
Jean-Baptiste le Rond d’Alembert was a 18th century Frenchman who created what has been more recently referred to as a “pyramid system”.
This is another example of a recovery staking plan, as like the martingale, Fibonacci and retirement methods, it also demands an increase of stakes after every loser (offset by a decrease in stake after each winner).
These plans can be made to look great on paper but, in reality, a losing run of any great consequence can have devastating effects on your betting bank.
Now some have said that the basis of the d’Alembert staking plan is that of the gambler’s fallacy (otherwise known as the Monte Carlo fallacy) which states that current events can be/are effected by previous actions.
e.g. if you toss a coin and it lands on heads 6 times in a row, there’s more chance of the next spin being tails… when, actually, it remains unchanged at 50/50
Hence believing that a roulette wheel is more likely to land on red, after a run of blacks, is wrong. It’s a fallacy.
Now when applied to betting, the logic of this misguided thinking dictates that after a loser (or a run of losers) you’re more likely to back a winner.
Therefore, a more aggressive stake next time will more than recover losses.
Again, great on paper. But what if your cash, or your nerve, run out before the winners start to flow..?
In theory d’Alembert method is quite simple.
e.g. you start with a standard stake, say 1% of your £1,000 bank (£10)
↪ upon every loser, you increase your stake by one unit
↪ so your first bet loses, your next stake is £20, another loser and it’s £30
↪ this continues (£40, £50, £60…) until you back a winner
↪ after a winner, you reduce your next stake by one unit…
↪ so after four losers (£10-£20-£30-£40), you win on the fifth bet (staked at £50)…
↪ which makes your next stake £40, and so it goes
Not too sophisticated.
Similar to the martingale system, and Fibonacci, for sure, and with some features also in common to the retirement plan.
The increase in stakes is a little less severe than some other recovery plans, and advocates of d’Alembert would say that it provides greater depth to your betting bank.
But it remains a highly aggressive way to stake your bets… especially if your strike rate is variable, let alone low.
And this seems to be a common theme, or weakness, with recovery staking models, they would appear to work best with a high strike rate – similar to the roulette wheel, or any other betting medium which has a limited number of outcomes.
Even so, because d’Alembert and others are underpinned by a belief that “the winners will come” so keep on staking to ever-greater sums… this theoretical assumption is often undermined by a lack of cash, chips or capital.
Labouchere Staking Plan
This is another recovery method which bears the name of its creator, Henry Labouchere.
The system also gets referred to as the Cancellation System, the American Progression, or even the Split Martingale.
But whilst several of its fellow progression models have a quite simple blueprint (like the martingale with its basic “doubling stakes” format), the fundamentals of the Labouchere staking plan are rather more complicated… like we find with something like the retirement plan.
In other words, it takes some explaining!
Simply put, and taking it back to the reason for its inception (roulette) the staking plan centres around having an overall target profit in mind, and then how you go about reaching that target.
Now your overall target is determined by a sequence a smaller targets added together. And it’s this sequence which will instruct the user on how much to stake on each bet.
Let’s take the target as being 21 units, made up of six smaller targets 1–2–3–4–5–6 (and here I’m going to use an illustration taken from the excellent Staking Machine website).
Basically what happens with Labouchere is that your first/next bet is always the sum of the first and last target numbers in the sequence, here 7 (1+6).
Now if this bet wins, you cross out the two numbers (making your sequence x–2–3–4–5–x)
So your next stake is again the two end numbers, now 2+5 = 7
But if this bet loses… you add this number (7) onto the sequence (x–2–3–4–5–x–7)
And your next bet will equal the last two number (2+7) = 9
This loses, so you add the 9 to get x–2–3–4–5–x–7–9
But your next bet of 11 (2+9) wins, to make the new sequence x–x–3–4–5–x–7–x
And on it goes…
You add and subtract numbers off the sequence…
Until you manage to cross off all the numbers, by backing winners.
And when you do, if you add up all the profit and loss figures from every bet placed… hey presto, the sum will equal your initial target.
Here it was 21 (the sum of 1+2+3+4+5+6) after the placement of eight separate bets this is what you’d end up with (7-7-9+11+10-9+13+5 = 21).
So provided you land enough winners, you will eventually end up at your target profit.
However, back a number of losers and your target becomes further, and further, away, as your stakes start to mount up.
And this is a common feature/failing of all these recovery plans… the way in which stakes can rapidly increase whenever a losing run is encountered.
It’s no wonder that the likes of martingale, Fibonacci, d’Alembert and Labouchere have gained popularity by their application to roulette… where betting on red/black or odd/even will deliver a close of 50% strike rate, and so limit the length of losing runs.
However, what many backers forget, is that even with a controlled environment like the casino table, where the odds seem to be the toss of a coin (50/50) each time… the statisticians will tell you that play out this sequence of bets long enough, and the law of probability states that eventually you will hit a losing run of 10 (over a 1,000 bet sample size).
And even though this might not sound much… 10 straight losers, when your stakes are increasing (and sometimes doubling) each time, will decimate any betting bank – however big it is, or however small your starting stake.
So once again, recovery staking plans are good to know, and important to understand, if only to make you cautious about using them without being fully aware of their inherent weaknesses.
OPINION: Whilst trying to keep an open-mind, the conclusion drawn from studying various “recovery staking plans” is almost inevitable… they are to be handled with care! In fact, you could almost go as far as saying they only appeal to two categories – mathematicians and mug punters! There are honourable exceptions. Take the example of the retirement plan – there are elements in this which make sound sense. But treated as a whole, recovery models offer reward but substantial risk in equal measure. Next time we’ll go to the opposite end of the spectrum with a discussion about dutching or dutched betting – click here to read on