What to do when on a winning streak . . . what to do on a losing streak . . . what size of bet should you have . . . how to cope with up and down bankroll amounts . . .

These are just a handful of questions that confront punters in the world of racing. Finding the right answers can be difficult. Some punters never do find the answers.

The chances are that your betting bankroll today is not the highest it’s ever been, even if you are fortunate enough to be a winning bettor. We all learn, often to our horror, that bankrolls grow, or decline, in fits and starts.

To put it very simply and in some perspective, bankroll swings are determined by LUCK. You win some and lose some and never in any precise or truly predictable way. After all, if you could accurately predict your next win, you could simply bet every dollar you could get your hands on and win all the money, but, alas, gambling doesn’t work that way.

Heavy swings mean it’s difficult to predict what your betting bankroll will be on January 1, or June 1, or whatever date you name. You simply cannot say, which is a good enough reason to warn you off using gambling income, or lack of it, for household budgeting!

As punters, you need to confront a number of sobering truths. One is that you never know when a bad losing run is about to start, or when it will end. You can be cruising along in winning mode and then, inexplicably, you can be caught in a losing streak that seems to have no end.

The US expert Barry Meadows has much to say about money management in his books and writings in magazine articles (if you can, get a copy of his best-seller Money Secrets At The Racetrack. The book is a must-read for anybody who considers themselves a good handicapper but has been unable to fully profit from their skills. It is also recommended for casual horseplayers who are considering increasing their level of play. Techniques such as line-making and structuring exotic tickets based on odds lines can only serve to maximise profits and minimise losses in the long term.

Talking about bankroll fluctuations, Barry says: “Let’s say you are a straight win bettor. Do you bet mostly 8/5 shots ($2.60) shots, or mainly 9/1 shots? If you specialise in trifectas, do you go for low-percentage, high-payoff plays? Or do you prefer keying a solid 6/5 ($2.20) chance and using only a whole bunch in the 2nd and 3rd slots?

“Anytime you make longshot bets, you’ll have a low strikerate  percen-tage. And the lower the hit percentage, the greater the fluctuations. Either you hit that $3,400 trifecta or you don’t, which makes a large difference in your bottom line. It’s not the type of bet which makes the difference. A place bettor who bets mostly on 2/5 shots ($1.40) will have only small bankroll fluctuations, while another who looks only for horses that are 15/1($16.00) and up will have much greater swings. They key is the strike rate.

“When horses pay little, each individual result has only a small effect on your overall fortune. When bets can return giant amounts, it’s a different story. Just a single score in an exotic can make your entire year; losing that 5-figure photo might just make it in the opposite direction.

“This goes along with the first factor (odds). If most of your bets are on 12/1 shots, a hot or cold run may result in significant fluctuations. When you’re trying to make big scores, then expect big swings, good and bad.

“Take two punters with $5,000 betting bankrolls. One bets $5 a race, the other bets $200 a race. The latter not only has a much larger chance of going bankrupt, but his fluctuations will be huge as well. One week me might have a $7,000 bankroll, the next only $3,000. If you play high considering the size of your bankroll, be prepared for wild swings.

“It’s all about variation in your bets. The lower the variation, the lower the fluctuation. The higher the variation, the greater the fluctuation. If you bet $20 on one race and $180 the next, the bigger bets will have a huge effect on fluctuation.”

Well, what about bet size? This should always be decided on in the context of what you have in your betting bankroll. Keep your bet size in proportion to that and try to make it sensible against your actual win strike rate.
Knowing the right amount to bet is one of the underpinnings of successful betting. A lot of punters don’t bet enough and so they make less money than they should. On the other hand, bet too much then even a normal losing run  could destroy your bankroll, along with your optimism and confidence.

There is a way to go. You can follow a suitable “bet size range” table.  It’s up to you to determine a bet size that is within what we call your personal comfort zone and your “risk” factor with your bankroll.

If you have a 20 per cent strike rate, then a “safe” approach would be to bet 0.7 per cent of your bank. You may, of course, feel confident enough to bet a little more than that, perhaps up to 1 per cent.

Let’s say your strike rate is a handy 30 per cent. In this case, most professionals will tell you that one per cent to 1.5 per cent of your bank would be a safe, conservative way to go.  If you are astute enough to have an even higher strike rate, say 35 per cent, then your bet size could be anything from 1 per cent to about 1.8 per cent.

You can see from these figures that you should use caution when dealing with this factor of your betting. You are trying to balance both worlds. You don’t want to underbet but you also want to avoid over-betting; it’s a delicate balancing act.

My colleague The Optimist has written extensively on staking. He likes to recommend the “percentage of the maximum size of the bank” as the way to go.

He says: “Take $100 as your starting bank. You decide to bet 2 per cent of the maximum size. It means that you will always be able to have 50 x $2 losing bets in a row before you bow out. But if you get winners, your bet grows.

“Say you have a winner at 5/1 ($6.00). The bank is now $110. The next bet should be $2.20 but of course that’s still $2. But as you go up, another TAB unit is possible. Say you get to $150. The bet is now $3. At $400 the bet is $8. You ALWAYS have 50 losing bets between you and the ultimate wipeout.”

All this may seem like basic stuff to punters who’ve been in the game for a number of years. There are, though, always punters coming in “cold” and who lack experience and they’re the ones who probably need to have good advice given to them.

The 2 per cent of bank approach is basically level stakes by another name. You are having the same amount on each horse in a series. But it’s still an approach that many have yet to try and who may even have trouble sticking to it.

By Philip Roy