Are you a clever punter? Or perhaps you're a mug punter? Or perhaps something in between? Melbourne form analyst Paul Segar has advice for all punters in his excellent new book "Horse Racing Theory And Practice". This is an extract from the book.

Why study form? This is an interesting question. There is little doubt that by following the money you will get winners. Your favourite jockey or trainer will also bring in results.

The trouble is often the winners are so short that simply too many are needed to break square, let alone win.

Just what skills does a form analyst need? Well ... he should be a bit of an historian, a bit of an economist and part of an accountant, with a good sense of timing. Form is really history. And the old story about history repeating itself applies no less here than in other areas.

If a horse has won before, chances are it will win again. On the other hand, if it has run badly every time, likewise it is probably going to run badly again. These are the extremes; most horses fit somewhere in between.

What sort of bank do you need to bet seriously? Most experts in any area have tried just about everything and have made all the mistakes possible, usually so many times that finally they get a few things right and move into the 'expert' domain.

In racing, to be a real expert, you would have made innumerable mistakes, time and time again until finally something sticks and you start to improve.

The words in this book are testament to my own mistakes and despite all this theory and practice I still make mistakes nearly every punting day, as do the majority of punters, professional or once-a-year alike (eg, should have taken a different quinella or trifecta, perhaps a running double, or a daily double, and so on).

There are many other punters I know who have similarly made mistakes. I believe in their cases that their failure was the lack of understanding of the notion of a bank. A punting bank, money set aside for punting alone, and not used for anything else.

I believe, to have any stability in your punting, the maximum amount to bet on an ongoing basis has to be 1 per cent of your bank, per horse or per race. For example, on February 25 last year I selected a variety of horses and backed three of them for a win.

None of them won. Betting only 1 per cent of my bank on each horse left only a small, yet still painful, dent in the bank of 3 per cent.

If, though, I had bet 10 per cent of the bank on each horse, almost a third of it would have vanished. It may well have taken three months to build up that 30 per cent and to throw it away in one day is sheer stupidity.

Let's face it, cutting out that stupidity is the key to winning. So think clearly before betting on any horse, whether it be for a win, or in a multiple quinella or field trifecta. If bet size is large compared with the size of the bank, another bet should be considered.

A bank may be made up of theoretical money. Certainly if there is another income apart from racing, no problem. It is possible from other income to save up a bank and then continue punting initially at a larger level.

As I've already stated, a 1 per cent bet is a good size but on a $100 bank a $1 bet hardly enthuses even the most conservative punter!

How much can you expect to win at racing? Most punters are doing quite well if they can make 10 per cent profit on turnover for an ongoing period. If $500 is outlaid the return is $550. On $5000 the profit is $500.

If you can maintain an overall 10 per cent profit on turnover, you will become rich fairly quickly, but not in one year. To increase profits, the stakes would simply have to increase as well.

To help you achieve a profit, you should adopt what I call 'good habits'. As you work your way through my book, a number of these good-habit items will be needed:

Three workbooks to be used for:

(a) writing down rules and exceptions that you may come across during your analysis,

(b) the formation of your own stable (this can be a combination of horses, jockeys and trainers),

(c) writing down every selection made, the amount wagered, results and comments as to how each horse ran.

In this latter workbook, you should include all expenses associated with following the racing, like formguides, etc. This is the accounting part. At worst, write the profit/loss for each day.

This last workbook is vitally important. You may look at punting simply as a hobby, something you do on a Saturday. It is important with any hobby to keep track of just how much it costs you each week.

* Scrapbooks (40cm by 32cm) are also needed. These are for storing photo strip finishes and clippings.

By Paul Segar