Betting Banks
Whatever your long term aims from betting, if you are here reading this article in the On Course Profits magazine, I have to assume that you have some desire to put your betting on a professional footing and, ultimately make some money from it!
That being the case, you need to get the basics right.
I’ll be writing a series of articles on the things you absolutely have to have in place to get the basics right and in this first one I’ll be focusing on your betting bank.
Too many punters try to wing it on a betting bank, thinking bank advice is too cautious and will hold you back. That’s the kind of thinking that will have you jumping from one strategy/tipster to the next, chasing from one losing run to the next, never giving any strategy the full crack of the whip it deserves if you have researched it properly.
If you truly want to bet professionally you MUST, I repeat MUST, have a dedicated betting bank and you MUST keep it separate and ring fenced from your everyday funds
It should also be an amount that you can afford to lose – painful to lose for sure but ultimately an amount that you can live without if forced to do so. If you follow the steps I’ll outline in this article, you are unlikely to lose your entire bank at any point but you should always be prepared for that worst possible outcome.
The size of your betting bank will be dictated by the amount of money you are willing and able to dedicate to your betting. It will also be dictated by how much you are prepared to lose if the unthinkable happens.
Guard your betting bank jealously – it is the most important tool you have.
Best practice is to place your betting bank into an entirely separate bank account set up for this purpose alone. It’s so easy to open an account online these days, there is no excuse for not getting it set up properly.
I learnt this the hard way. When I first started betting seriously and with the intent to make money and hopefully a living from it, I followed through and had a dedicated betting bank set aside but I stupidly kept the funds in my personal bank account.
It got very messy and had a seriously adverse effect on my betting psychology.
When you encounter a long losing run ( and you will – and it will be worse than you anticipated, guaranteed) it really doesn’t help you to stay objective if you can see funds being drained from the account you use to pay your mortgage.
It becomes very much more stressful than it would be if you were losing investment money from an account solely dedicated to your betting activities.
On the flip side of that coin – and equally as damaging – is the temptation when you’ve had a good win or a good week, see an extra chunk of money cluttering up your current account and decide to up your standard of living a bit! Before you know it, your local Michelin starred restaurant is flush with your betting funds.
Please don’t underestimate the importance of keeping your bank ringfenced. Once I realised the importance of totally separating my betting finances and my personal finances, my betting became significantly more profitable.
It eased the psychological pressure and made me more aggressive in both my selection and my staking.
How Many Points Should My Bank Be?
You will, of course, require a separate betting bank for each strategy/method/tipster you are following (a single bank can be leveraged for several services as you become more experienced but when first setting up, you should on the basis that you are using an entirely separate bank for each one of your strategies.
The number of betting points you require in your bank will be dictated by the expected/observed strike rate of the particular strategy.
If you are using a method which has a long term win strike rate of 40% you will need to break your bank down into far fewer points than if you were using a method with a 15% win strike rate.
Always be cautious when deciding this and split your bank into considerably more points than you ever feel you will need. The example below should help you when making this crucial decision:
You are following a selection process which has shown itself to have a long term win strike rate of 30%.
Your bank should be broken down into a sufficient number of points to weather your longest statistically likely losing run. There is a formula for calculating the longest losing run you are likely to encounter but for ease I have put the results in a table below:
As you can see, with an expected 30% win strike rate, you are likely to encounter a run of 19 consecutive losers at some point in your first 1000 bets (and this expected consecutive run will gradually grow larger as the number of bets in your sample grows)
You also need to remember that it is perfectly possible that two or three such losing runs may occur in quick succession creating a much larger drawdown to your bank than just the largest expected losing run.
With that in mind, I urge caution when deciding how many points would be required I believe a safe rule of thumb would always be to have a betting bank broken down into a number of points equivalent to 5 times your longest expected losing run.
So in the 30% strike rate example, my advice would be a minimum bank of 100 points (5 x 19 then rounded up to 100 for additional security)
For more detailed calculation of largest expected drawdown in a set of bets I always advise carrying out a Monte Carlo simulation to get a really good handle on what you can expect with any given strategy. There is an excellent Monte Carlo simulator here:
So now, the expanded table below shows the minimum bank points required for each expected win strike rate percentage:
It will also help your long term betting psychology if you go into your betting ventures with a very clear plan as to how you will manage profits from your betting. Are you going for capital growth with no profit taking at least initially? Are you looking for some regular income from your betting investments?
Be clear on what you are trying to achieve before you start.
Personally I always have the hybrid goal of long term growth of the bank alongside some profit taking – it’s good when things are going well to see some tangible results in your life from your betting. Don’t be afraid to take some profit and buy something that you would normally think too profligate to spend your money on!)
To Summarise:
Set aside a sum of money that you can afford to lose that will only be used for betting.
Keep that money entirely separate from the rest of your money in it’s own bank account with a debit card for easy deposits and withdrawals.
Get clear on what your longest expected losing run and drawdown are likely to be and use that to decide how large a bank you will need.
Get clear on your long term money management strategy and what you are ultimately trying to achieve. That clarity will be invaluable when the road gets rocky.
Kieran Ward