Russell Clarke is one of Britain's most successful professional punters. He writes for the popular magazine Odds On and runs his own Internet site. In this special article, he gives his views on betting psychology and comes up with the Power of 3 theory.

The vast majority of newcomers to either the stock-market or the racing betting market suffer losses. A stockbroker friend of mine insists that most private investors lose money. How can this be?

I firmly believe the answer lies in the psychology of winning. I have come to the conclusion that only a small number of people are psychologically able to make money in the long term via any form of speculation.

A good example of this comes from an American named Victor Sperando, who made his name on Wall Street as a trader on the futures' market. His methodology is quite specific and in the '80s he taught 38 people his 'secrets', yet all but five of them went on to lose money as traders.

Vic believes all the 38 were capable of playing the market, and all could recognise when they violated a rule, but most of them continued to make mistakes. To determine why, Vic turned to psychology and the answers he found are equally applicable to horse-racing.

Consider weight loss. Most people who set out to lose weight know HOW to achieve the aim but few succeed. Independent statistics I have seen show that of 100 people beginning a recognised diet plan, only 25 lost weight within three months, and the figure drops to a depressing five people after 12 months.

In England, my private telephone service was making 50 units profit halfway through 1997, yet only 15 per cent of my clients decided to renew their subscriptions. In 1995, my service recorded a profit of 399 units, yet half my subscribers never renewed.

I think the reason is that punters tend to be dismayed by losing runs. They lack a certain emotional discipline. But the good news is that this emotional discipline can be self taught. I have personal experience of this discipline and can assure you it is possible.

Failure in betting, dieting or any other area occurs not because you cannot do it, but because you lack the will to do it. True motivation is not present.

The chain reaction you must break is the following: You want to lose weight, but to do so means experiencing pain rather than the pleasure of eating your favourite fattening food. In your mind, then, dieting is associated with pain. You want to make money from betting but following any 'proper' approach means you will have losing runs and that means experiencing pain.

Our first reaction is always to avoid pain and so we falter and fail. To break this chain you must view the good as pleasurable; you have to convince yourself, quite genuinely, that weight loss is a pleasure and so is betting
profitably and experiencing losing runs.

In racing terms, the first step is to set up rules for yourself. Following the rules leads to pleasure, breaking the rules leads to pain.. This is what your mind-set should be. Now I come to what I call the Power of 3 - the three factors that can break any betting psychology negativity.

'Get a plan and stick to  it'

POWER FACTOR NO. 1: You must recognise that profitable betting is an immensely difficult task. Anyone can have a winning day, week, month or even year, but to consistently win money is a major achievement. Therefore, you should not set unrealistic targets.

If you have 100 bets a year of $10 each and make a profit of $2000, you have an exceptional betting year. Your betting bank of, say, 50 bets (50 x $10) is $500, so the profit of $2000 is a return of 400 per cent in a year ... exceptional by any standards.

And yet even rational, intelligent people expect far more from their betting. It seems that when it comes to betting, most punters lose all sense of financial reality.

POWER FACTOR NO. 2: You must divorce yourself from financial pressure when betting and the only way to do this is to set aside a betting bank. You must do this physically. That is, actually open a separate bank account, or tote account, or bookmaker account, and mentally write off the money deposited.

The bets can then be regarded as just numbers on a piece of paper. If you do not do this, you will soon find yourself considering that the $50 you have just lost could have bought a bike for your son or daughter, but instead you BLEW it on the horses!

This leads to guilt and depression and your betting strategy starts to falter.

POWER FACTOR NO. 3: Once you have decided on a profitable strategy, make a mental decision to stick to it. Remember, the ultimate outcome of sticking to your guns is profit and if you jump ship it will only cause you pain.

Adopt these three simple factors the rules of your betting life - and you should be able to create the emotional discipline required to bet profitably.


Even a losing year can be accepted using the above strategy. For example:

Starting bank: 50 units.

Year 1: +20 units bank 70 units.
Year 2: -10 units bank 60 units.
Year 3: +20 units bank 80 units.

The bank has grown by 30 units. That's an increase of 60 per cent or 20 per cent a year. And you had a losing year in between the winning two years.

To sum up: You will not master the psychology of betting simply by reading this article. After all, you may have heard the advice before. The difference now should be that you adopt my three Power Factor rules before you place your next bet.

You will then have a mind-set that associates betting with profit and, therefore, pleasure! Losing bets and losing runs (even losing years) can be accepted and not associated with pain.

Even the late, great betting master Phil Bull had losing betting years. So do all professionals. It's that kind of a business. But you must keep your emotional balance right.

Keep the 'fun' in your betting and treat yourself to the odd accumulator bet, the occasional Yankee ... after all, with luck on your side, this is the only way you are likely to win that elusive fortune!

Don't forget, too, that while your staking approach is all-important, so is your choice of horses to back. In this respect, always accept that form, especially current form, has the single greatest influence on the outcome of horse races. The vast majority of punters recognise this and it is reflected in the odds on offer about these so-called 'form horses'.

To statistically measure the impact of current form, I use two basic measures. Firstly, I look at horses that won last time out and then I look at horses that are top-rated on collateral form ratings.

Last-start winners may be a crude measure of current form, since there is no allowance made for class and weight, but it is, at least, unambiguous. Collateral-form ratings are a more accurate measure because they do take into account class and weight, but they are, of course, the subjective opinion of a private handicapper.

I have found that last-start winners repeat at approximately an 18 per cent strike-rate, roughly twice the strike rate of horses selected at random. Therefore, this is clearly a useful tool of analysis.

Backing all these last-start winners won't make you any money. In fact, you will lose around 18c in every dollar, also roughly twice as good a result as you would get from totally random backing.

The conclusion is that recent winning form has important predictive powers that are reflected by the odds on offer.

In the January issue of PPM, Russell Clarke continues this theme with an article on 'the influence of form’ in which he spells out his thoughts on last-start winners and the collateral-form horses.

Click here to read Part 2.
Click here to read Part 1.

By Russell Clarke