Last month I wrote that believing in the Law of Averages is the worst possible practice we can undertake. Belief in it can lead to - and usually does - total disaster. As correct and indisputable as the theory behind it is, in my opinion, it should be totally disregarded by punters.

No matter what kind of betting you do - especially on games like two-up and roulette - make your first objective to totally disregard it.

There is another law, however, which many gamblers confuse with the Law of Averages, but which is one upon which all your punting should be based. I call it the Law of Frequency.

It is easy to confuse the two, so what is the difference between them?

The Law of Frequency relates to trends and patterns - in other words, what is happening now. The Law of  Averages has a lot of reason - undeniable, absolute reason - but no rhyme, no rhythm. It is impossible to predict its timing. Endeavouring to do so usually will eventually lead to massive losses.

An unwise punter will rely on the Law of Averages when he believes a long string of winners, or losers, is about to be halted.

A wise one will use the Law of Frequency when he considers the present trend will continue, or to make the most of it when it is continuing.

As examples: a two-up player will increase his bets if he keeps on winning, thus placing his faith in the Law of Frequency.

Another player, a disciple of the Law of Averages, will switch to backing tails after heads has come up a number of times in succession and will, generally, increase - even keep doubling - his bets, believing that the number of heads and tails will equalise.

They will equalise eventually but there's no rule to say when.

The punter who places faith in a head arriving soon, as part of the equalising process, and starts doubling his  previous bet, stares disaster in the face. He will, at some time or other, be a victim of the Law of Loss!

It is the same with what we so liberally refer to as turf investment, where, absolutely, there is no such thing as the Law of Averages, and equalisation operates in exactly the same manner as it does in any other form of gambling.

Every aspect of racing can suffer a run of 'cuts'. No matter whether you follow favourites, a leading jockey. a master-trainer, topweights, numbers, barriers, guru-tipsters or 'unbeatable' systems, sooner or later you will end up on the wrong end of the Law of Averages.

Each of them can go - and have gone - dozens of races without producing a winner. So forget about trying to get rich by following any of them through their bad periods with undying faith until they hit their sunny patch.

It's almost a foregone conclusion that when they do, your betting bank will be six-feet under that patch. If Lady Luck has her way, your money will have run out just one bet beforehand.

Your punting bank will have disappeared at an increasingly faster rate as your staking plan carries you to a wipe-out. Chances are that your confidence, too, will have disappeared along the way, meaning that your last few bets are nothing more than misery.

To sum up the difference between the two laws:

Punting on the Law of Averages, one never knows how many bets will be required before a winner is struck.

Punting on the Law of Frequency, one always knows the maximum number of losers that will be struck in a sequence. That number is one. A winning streak will come to an end with just one loser. A losing streak can run on interminably.

Many punters believe that a good-sized bank roll is the first requirement to make them a winner. They reason that with so much ammunition to fire they must eventually hit the bullseye and regain all past losses -and finish up with a handsome profit.

If you are Kerry Packer, that may be true. But for an ordinary punter that is the worst attitude you can have. It is just as easy to lose big money at the races as it is to go through small change.

There have been many instances of men of unlimited wealth losing everything through gambling, be it at cards, the races, the stock exchange, poker machines or casino games.

Their huge capital didn't help them; maybe it had the opposite effect - it tempted them to believe that a change of fortune would have to eventually come. But it didn't.

Others gambled badly because their wealth made them careless.

I read once that the famous American gambler Nick The Greek said that you bet best when you have to win in order to eat- I go along with that, although it may seem to contradict my axiom that you should never bet more than you can easily afford, or money that should be ear-marked for some other purpose.

'Frightened' money never wins so, if ever you're frightened that you might lose, don't bet.

When we go against that rule, we find it isn't long before we're losing, then we begin chasing our losses with even more money that we can't afford, and every decision we make becomes the wrong one. Well, not exactly wrong, but unlucky. However, only just unlucky. We're always nearly right, but never exactly so.

We become members of that group I call 'Nillies'. They're everywhere and identifiable by such expressions as, "I nilly got out", "I nilly got the trifecta", "I nilly backed that winner".

On the other hand there are also instances of gamblers who started with nothing and finished up with fortunes - men who understood the value of a dollar and played the percentages wisely and with an eye to the future, the long term.

If a punter with plenty of capital runs into a real slump, the fact that he has a Substantial "bank" will not be sufficient to pull him out unless he has commonsense and bets to some planned method which will cope with the Law of Frequency.

To show that, on good selections and during a winning cycle, a punter with limited capital can build it considerably by using a staking plan based on the law of frequency, it is worth recounting the story of an American turf writer of some years ago, Les Conklin.

Conklin had developed a system of picking winners in certain types of races and, reviewing his results over a considerable period of time, he found that he averaged about two winners in seven bets.

Now, I'm sure you will be thinking that is far from spectacular. It is no better (and, indeed, perhaps worse) than the average of winning favourites and about the same as our average newspaper tipster in Australia achieves.

You have learned from bitter experience that following either of those forms of selection will send your money on a detour, fir from the road paved with gold. There is probably not a staking plan ever been created that will develop you a satisfactory profit overall by investing via either of those two selection methods, producing such a low average of winners.

Yet, from his own method of selection, with such a poor winnerratio - just an average of two winners from every seven bets - in over just 30 meetings Conklin turned $2 into a large five-figure sum.

Admittedly he hit a streak of more than 50 per cent winners for a short period but we all do that from time to time - the operative words being "short period". But that's what the Law of Frequency is all about. It allows us to strike while we're running hot.

The trouble is, when such a time comes, most of us consider we are just on a "Lucky Streak" and don't capitalise on it. The run is often over before we even realise that it has begun, but as Les Conklin proved, it is the time we should take in the palms of our hands and use to do most of our winning.

Strangely we always seem to realise quite early in proceedings when we are on a "Losing Streak" and most of us tend to take immediate steps to make it worse: we chase our losses, we lose confidence in our selections, we change our philosophies, we switch from one plan or selection to another, we start to "run with the mob" even though we don't normally, believing they must be right because we are so out of form we couldn't even pick a flower.

We do at least one but probably all of those things. And we start doing them as soon as we start losing.

Doesn't a review of those bad habits make it easy to see the sense in going the other way?

Click here to read Part 4.
Click here to read Part 5.
Click here to read Part 6.
Click here to read Part 7.
Click here to read Part 8.
Click here to read Part 9.
Click here to read Part 10.
Click here to read Part 1.
Click here to read Part 2.

By Ben Richards