Before we place a bet, each one of us goes through a mind game in determining (a) which horse or horses to back and (b) how to back them. It is a mind game of sometimes infuriating complexity, and one that can be frustrating and, yes, soul-destroying.

If you can win this battle with your own mind, you are well on the way to winning at punting. (Philip Roy addresses this subject in his excellent article on Pages 4/5 of this issue).

In my series of three articles, I am going to look at the linked psychological and financial aspects of following various money management ideas. First question to be posed is this: Do you have the right psychological make-up to follow certain staking approaches, and are some of these approaches worth all the trouble?

Let's look firstly at level stakes betting. On the surface of things, this would seem the easiest and most stress-free way to bet. Each selection carries the same amount of money. You know exactly how much money you can lose over a given period, and if you strike a losing run it doesn't matter to the staking because you continue to bet the same amount each time.

If you were to put forward a method as being 'ideal' for the cautious punter, then surely this would be it? Well, maybe. I say this because, unfortunately, level stakes betting operates on the basis that each bet is actually WORTH the same amount of money.

It takes no account of each horse's actual (true) chance in a race. For example, if you assess Horse A as having a 'true' 6/4 chance, you are saying it has a 40 per cent chance of winning, or that it would win the race 40 times in every 100 times it was run. You assess Horse B in the next race at 3/1, which means you give it a 25 per cent chance of winning.

With level stakes betting, you would place the same amount on each horse. But if you look at how you have assessed their individual chances you would immediately realise that you are underbetting the 6/4 prospect and overbetting the 25 per cent chance.

This is the tricky mind game you have to confront. Is level staking so smart when you consider this further factor of true worth, of looking at the true chance in comparison with the financial outlay you are making?

It would seem prudent and sensible to bet more on the horse with the greater chance, wouldn't it? Yes, you might say, but then we strike another problem of the mind. Can you handle differing

stakes between horses? Would it upset you if you were to have to place bigger bets on some horses and lower ones on others?

The fact is that most punters feel safe, more secure, betting the same amount on each horse, irrespective of what its true price, or true chance, might be. A common complaint among small punters who bet haphazardly is that they have too much on the losers, and not enough on the winners.

Betting on a level stakes basis takes away this particular frustration - only to let in another one. The frustration of having only your usual level stakes amount on a big winner.

A friend who bets level stakes remarked to me only recently: "I can't handle progression staking, so I stick with the flat bets, but I do get annoyed when I haul in a big winner and realise that I haven't really capitalised on it as I should have.

"All I've done is had the usual $10 on it, the same amount I had previously bet on horses at 2/1 and 5/2, that sort of price range. I always have the feeling that I've missed the boat with my big winners."

This punter is echoing the complaints of many level stakes punters. While they find the rigid formula comforting, they have to contend with the fact that progress is slow. How slow depends on their tipping skills.

What all punters are up against is the 'take' of some 15 per cent of every dollar invested. On average, even the most judicious amateur punters stand to lose 15 cents in every dollar they bet; many lose even more. A minority of punters are good enough handicappers to break just about even.

But to break even, betting mainly on favourites, a punter would have to average around 35 to 38 per cent winners at around $2.60 per return (average 6/4 to 13/8 winners). Thirty-eight winners per 100 bets would give a total return of around $99 – the brink of break even. And, believe me, it's not easy to score 38 times in every 100 bets, even with solid plays!

The punter who goes for 'easier' horses in the betting, say 5/1 shots, will probably win about 12.8 per cent of the time if he's a sharp handicapper, but just to break even he needs an edge that will enable him to hit almost 17 times.

Remember facts like these when you are planning what ever betting approach you decide on. As far as level stakes are concerned, what do you have to do to make a decent profit? Well, it's a hard road.

I'll assume you're betting mainly on solid chances, and that you can average 5/2 about each winner, and you can score with 25 winners per 100 bets. This leaves you in a loss situation, with a total return of only $87.50 per 100 bets (assuming $1 win each). To reach an acceptable 15 per cent profit level, you will have to increase your strike rate, or increase the average price of your winners. No easy task!

A strike rate of 30 per cent at average 5/2 winners will haul in a small 5 unit profit. Only when you can lift the strike to 35 per cent can you achieve a decent profit – about 22 per cent. That's something like what you would aim for, but isn't it a tough assignment?

Maybe, then, level stakes betting isn't such a bright idea? It can be a long, painful haul to the paradise of profits. So what can you turn your mind to in a bid to alter the chips stacked against you?

Next month, I'll be taking a look at some of the more intricate money management ideas - ones that require determination and intelligence to pursue, but which can be most profitable with the right selections.

Click here to read Part 2.
Click here to read Part 3.

By Ted Davies