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These series of articles could be the most important ones you will ever read.

Betting On Horse Racing ~ Sensible Money Management (Part 1)

Of course I didn't! That would have been complete madness, and dicing withfinancial suicide. Putting absolutely everything you have on one horse is anexample of bad money management – albeit an extreme example, but it got yourattention didn't it?

Yet all too often the average punter is guilty of bad money management. On amuch lesser scale admittedly, but is it any wonder that the average punter losesmoney betting on horse racing? I am often asked by my members “how much”they should put on each bet, “do I have a staking system?”, or “how soon can Igive up my job and just bet on the horses?”.

It seems plenty of people like to pay lip service to managing their betting bank-roll, but it never ceases to amaze me how so many people are still acting sorecklessly with their money when it comes to betting. It strikes me that theperennial losing punter is a little like the over-weight bloke, who sets out onJanuary 1st with every good intention of losing his beer gut. He has a few salads,maybe even pays a visit to the gym. But more often than not come February he isback to his comfortable eating habits, and the weight continues to pile on.

It's often the same with the average punter – he has developed bad habits thathave, over time, contributed to a steady flow of money out of his bank accountand into the coffers of his local bookmakers. To become a winning punter he mustchange his ways.

Let's examine some of the bad betting habits that contribute to an unhealthybank balance:

1. Poor value bets

Let's imagine you go into Tescos and pick up a tin of baked beans from the shelf.At the check-out the spotty 17-year-old scans the tin, and says “four hundred andseventy-eight pounds sixteen pence please, sir. You hand him your debit card, keyin your PIN number and stroll out of the store. Ridiculous? Of course it is – youwouldn't pay whatever price the store decided to charge. So why do so manypunters take whatever price is on offer about a horse they fancy?

The answer is simple – they have no idea what a good price about the horseshould be. We are all familiar with a tin of beans, we have an idea of how much it isworth, and we can make a decision what we will and will not pay. But when itcomes to backing horses, probably the only limit most punters will place uponthemselves is never to back odds-on.

This self-imposed rule can in itself be a fallacy – if you offered me 4/5 odds-onabout a horse with a 4/9 odds-on chance of winning, I would bite your arm off!

The odds about any given horse are a reflection of the weight of money behind it,

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The odds about any given horse are a reflection of the weight of money behind it,and not necessarily a reflection of the true odds of the horse winning. Let me giveyou an example: top trainer Sir Michael Stoute is running a valuable filly for thefirst time in a maiden race at York. Champion jockey Kieron Fallon is in the saddle.The Racing Post has 7 experts tipping this horse to win. There are 11 other runnersin the race. This horse's price is 11/10 – is this a good bet? Do you really think that afilly running in public for the first time with no form to point to has a genuinechance of just under 50% to win the race?

This is a good example of when a horse's price is lower than it's true chance ofwinning. NOT good value.

The only way to make a profit from betting on horse racing in the long run, is toconsistently back horses at prices too high compared to their actual chance ofwinning. This is known as getting ‘value' into your bets. You are paying less forsomething than its true worth. It's stuff you would learn on day one of youreconomics GCSE. Equally, you will profit long term if you consistently lay horsesto lose at prices too short compared to their actual chance of winning.

The lesson to be learned is only ever bet when you have value on your side.Otherwise, just let the horse run. I will continue my examination of the othermoney-sapping betting habits in future articles, but that's all for today.

Betting On Horse Racing ~ Sensible Money Management (part 2)

In a previous article I jokingly suggested I had put all my assets – my savings, thedeeds to the farm, my kids’ Trust fund, and the proceeds from selling one of mykidneys – on a horse at Newbury. I showed this was potentially financial suicide,and an extreme example of bad money management.

I wrote that more often than not a losing punter will find himself saddled with abunch of bad betting habits. It is these bad habits that have gotten him, and hisbetting bank, to where his is now – the Poor House.

To arrive at a change in fortune, and to start making consistent profits, the losingpunter has to be prepared to make changes to the way in which he bets. In theprevious article we talked about the cornerstone supporting my own personalbetting strategy, and that is finding value in every bet you make.

You will only ever make a profit from betting if you consistently back horses atprices too high when compared to their actual chance of winning. This is exactlyhow bookmakers have made their money for generations – they consistently layhorses at prices too low compared to the actual chance of the horse winning.When punters continue to take these low prices day-in and day-out, it will onlyever be the bookmakers who come out with a profit in the long run.

The second ‘bad habit’ I want to examine is the subject of inappropriate staking.What do I mean by staking that is not appropriate? Well, what I am driving at isplacing bets that are generally too large in proportion to the size of your bettingbank.

Before I expand upon this, the concept of a betting bank is a side-issue in itself.You categorically MUST have a sum of money put aside for the sole purpose ofbetting. It scares me rigid when I hear of people simply ‘dipping’ into their currentaccount to place a bet using their debit card.

If you do not have a separate account for your betting activities, you cannot keeprecords, and you will not be able to answer that simple question, “Am I making aprofit, or a loss?”

It goes without saying, that betting involves a degree of risk, and you shouldnever bet with money you cannot afford to lose.

Getting back to inappropriate staking, the idea of lumping all your money on onehorse is an extreme example of over-staking. Of course, on the one occasion thisstrategy may pay off. We had friends round a few nights ago to play one of thoseRace Night DVDs. I was comfortably in front by studying the form before eachrace, and placing considered bets at what I considered to be value prices. As youmight imagine, I had a suitably smug expression on my face as we came to the last

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might imagine, I had a suitably smug expression on my face as we came to the lastrace, and our friends were complaining I enjoyed a ‘professional advantage’.

My wife then decided to put every penny she had left on an 8/1 chance. The raceturned out to be the ‘lucky last’ for my wife, and she walked away with the wholebank!

But seriously, continue with these tactics, and it will not be long before you loseeverything.

Personally, I would never consider starting any betting campaign with a bankroll ofless than 100 points. In other words, I will divide my bank by 100 to arrive at myunit stake. You can see that I will only ever be putting 1% of my bank at risk when Iplace a bet.

This is a very generalised approach, and you might argue that a little moreconsideration should be given to a punter’s typical strike rate. True, if someonehas a strike rate of 50% then it is statistically highly unlikely that he will suffer a runof 100 losers to go bust. So, in this case you might be justified in operating asmaller bank. Bear in mind that when flipping a coin, it is by no means unusual tosee 6 or 7 ‘heads’ in succession, and losing runs in double figures do occur.

Erring on the side of caution, you could foresee two such losing runs occurringtwice in close succession. In which case, I hope you can see that even whenconsidering a system which such a high strike rate, having a bank of well over 20points now seems very sensible.

With my own Redd Racing betting service, we enjoy what I would consider to bequite a healthy strike rate. However, we have experienced a negative swing ofsome 60 points during one particular month a couple years back. The accountrecovered to make a profit by the end of the month, but it underlined theimportance of having a bankroll large enough to absorb the losing runs thatEVERYBODY has to endure from time to time.

Indeed, it would probably be better advice if I suggested members of my servicehad a bankroll of 150 or even 200 points in reserve.

Yet I often receive emails asking me whether it is OK to deposit £100 with Betfairand start with unit stakes of £10.

Betting with stakes too high in proportion to your bank normally comes out of adesire to make money quickly. I think we are all guilty of getting overly greedysometimes, and unwilling to think a little more long-term. People are inclined toset themselves unrealistic profit targets, given the size of their betting bankroll.Having a bank of £100 and expecting to be able to make £100 per month is notrealistic. Get-rich-quick does not exist.

Akin to the Tortoise and Hare story, let me give you an example of where whatmight initially seem like a very moderate return, actually gives surprising resultsover time.

If you started with £100 in your betting bank, and increased this bank by just one-half of one per cent every day, after just 6 months your account would have abalance of £244 due to the compounding effect. You could more than doubleyour investment in 6 months with this seemingly small daily profit return. Takethat to your bank or building society and see if they can come anywhere near sucha deal!

Hopefully this demonstrates how ‘slowly but surely’ wins the race.

To summarize, my advice would be to set your unit stakes at one per cent, or evenone half of one per cent, of your total betting bank. By striking only value bets,and when the odds are in your favour, your betting bank will grow. As your bankgrows, so you can naturally increase the size of your unit stake to make moreprofit – but your bets will still be in proportion to your bank.

In the next part of this Sensible Money Management, I will look at more bad habitsthat suck money from the accounts of losing punters.

Betting On Horse Racing : Sensible Money Management (part 3)

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Betting On Horse Racing : Sensible Money Management (part 3)

This is the third instalment in a series of articles on profitable betting throughsensible money management. So far, I have discussed the importance of gettingvalue when you bet, to maximise the returns you achieve when your selectionswin. In the most recent article you should have learned to keep your stakes inproportion to the size of your betting bank.

Today I want to examine a common mistake that often gets punters into serioustrouble – chasing your losses.

I don’t think there can be many of us who have not at some time, decided to getback what we just lost by betting a little bigger on the next race. It is sometimesknown as progressive staking.

Let’s take a simple scenario: you bet £10 on Red Rum, and he loses. What do youdo? Perhaps you continue with your selection methods and come up with anotherpick in the next race – Best Mate. The price is 6/4F

But, rather than putting another £10 bet on Best Mate, you decide to ‘chase’ yourloss from the last race. You add another £7 to your stake so that when Best Matewins you will pick up an extra £10.50 to recover the bet you lost on Red Rum.Good plan? Could be, after all Best Mate is a sure fire winner, right? May be. May benot!

What happens if Best Mate loses? You are now £27 ‘in the hole’. But you still havea plan. Your next selection is a dead cert winner at Even money. You place yourusual £10 stake plus an extra £27 to cover your losses so far. No need to worry.When this one comes in, you will have re-couped your losses and have a £10 profitto show as well.

Let’s take a step back here. You are staking £37 to win a £10 profit. Think about it –you are effectively getting odds of only around 1 to 4 odds-on about a horse thatis Even money in the market. That is terrible value!

You may escape this time and your horse may well win. But what if, heaven forbid,your red-hot even money favourite fails to win? After just three bets, you aredown to the tune of £64 when your normal stake is just a tenner!

Long losing runs do occur, more frequently than you might think, and even withshort-priced selections.

If you spent a day in a casino at the roulette tables, and analysed how many timesyou witnessed a run of 7 or 8 consecutive ‘red’ numbers, I would not be at allsurprised if you saw this happen four or five times – in a single day. Here we havepretty much a 50/50 bet, even money, that the roulette ball will land in either a redor a black slot. Yet I was amazed to learn that the longest run of the same colour(reported) was THIRTY-NINE consecutive reds!!

Imagine if you were betting on black, and saying to yourself each time “no worries,it’s got to be black next time…. Surely?”

But let’s go back to the more common occurrence of a losing run of 7 even moneybets. We will be betting on the red.

We place a £1 bet on the first spin. It’s black. We chase our loss by ‘doubling up’and next bet £2. If we were to carry on in this manner, after 6 spins we would bebetting £64 to win our original £1

I sincerely hope my point is getting across. By chasing your losses you can veryquickly see your stakes climbing to preposterous levels, to win your original,relatively small stake. The risk is way out of proportion compared to the potentialreward.

One last example to really ram the point home. The Racing Post runs a tipstercompetition. All the leading racing journalists are involved, representing thenation’s newspapers and horse racing publications. These are experts at tippinghorses. Take a look at the results table any day, and see for yourself the longestlosing run. Remember, these are the experts.

I looked today, and Racing Post PostData has suffered this season a losing run of

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I looked today, and Racing Post PostData has suffered this season a losing run oftwenty-seven. Twenty-seven consecutive losers from an expert tipster! Andbelieve me, he is not on his own, just the worst offender this season so far.

There is an old saying – “Don’t throw good money after bad”. If your selectionsdon’t make a profit from simple level stakes betting, don’t try and make themprofitable by throwing more money at them. You may survive with a profit for awhile, but this approach is a disaster waiting to happen. Sooner or later you WILLblow your entire bank chasing a disproportionately small profit.

If your selections don’t make a profit from simple level stakes bettingFeatureArticles, change your system.

Betting On Horse Racing : Sensible Money Management (part 4)

In Part One of this series of articles on sensible money management, I said thatmuch of the reason people will lose money through betting is because of badhabits. How do you overcome bad habits? Discipline, of course!

If you were running your own business, you would treat it as a business and not ahobby. You would get to your desk on time each morning. As well as doing thethings you enjoy about your business, you would attend to all the mundane tasksnecessary for things to run smoothly. You would file your tax returns on time. Youwould have a business plan and you would set budgets for attainable growth. Youwould aim to make a profit by earning more in revenue than you spend in costs.You would not continue to sell a product at a loss. Etc., etc.

To run a business takes a lot of self-discipline, and so it is with making a long-termprofit from betting. It is not as easy as some people would have you believe. If thiswere true, then tens of thousands more people would be placing bets from theirlaptop by a pool in Spain, and there would be no more bookmakers in your localHigh Street!

If you are prepared to discipline yourself, then you are far more likely to elevateyourself from the 98% of punters who continually lose money through gambling.

The very first task you should undertake is to set up a separate account for yourbetting funds. It is essential you keep your betting activities separate from yourother financial affairs, otherwise you will find it very difficult to see if you aremaking a profit, and how much return you are getting on your investment.

No-one needs to be reminded that you should only bet with money you canafford to lose, but the more money you can set aside for betting purposes, themore likely you are to see any worthwhile gains. You should view your bettingbank as working capital, and an investment you have made in your own business.

Do not be tempted to place a bet using your credit card, or the debit card on yourcurrent account.

Anyone following my betting advisory service will know that I am alwayspreaching about getting value when you bet. My philosophy makes perfect senseto me, but then I’ve been trying to drum the principle into peoples’ heads foryears! But going back to the analogy of running a business, you wouldn’t pay £10for a product from a wholesaler if you couldn’t sell it for any more than an averageof £5. You may make the occasional sale at £15 or even £20 but if the averagereturn is only £5 then in the long run you will lose money.

The same principle applies when backing a horse – don’t accept a price of 5/1 whenthe real chance of the horse winning should be represented by a price of 10/1

If you fancy a horse to win, but you cannot get the price you want, then have thediscipline to let the horse run without your money on its back. Horse racing hasbeen around for more than a century -- there will be other opportunities. Youshould not be betting purely for the thrill of risking money, and only putting yourinvestment at risk with the potential of a good return.

Take the time to review how your strategy is working (or not). How much profitare you making? Which systems or tipsters are making you the most? Withoutcontinual review, you will not be able to maximise your returns (nor indeed limit

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continual review, you will not be able to maximise your returns (nor indeed limityour losses).

Your betting bank should be large enough to absorb any losing runs you willencounter from time to time. This is akin to managing your cash-flow of yourbusiness. Having a “large bank” does not necessarily mean having a lot of moneysunk into your betting account. Moreover, it means you should be staking only asmall proportion of your bank on each bet.

The same £1,000 bank fund could be divided into a large bank of 1,000 points, ie £1per bet. Or it could be divided into a relatively small bank of just 10 points, ie £100per bet.

As your bank grows, then the same small percentage of your total funds willrepresent a higher monetary value.

Do not be tempted to increase your stake on any particular bet. Set yourproportional stakes plan and stick to it. Yes, review your stakes from time to time,but never alter your stakes on a whim, on hearsay of a strong bet, or for any otherirrational reason. Be wary of getting greedy.

This is a good time to warn you of the perils of betting whilst under the influence.Never bet after having a drink. The reasons should not need further explanation.

If your method of selection is losing you money, then stop betting.

Allow me to expand upon the last statement. If you have a losing day, do not bequick to toss your system in the bin or cancel your subscription to your favouritetipster! Everybody has losing days, indeed everyone has losing weeks and badmonths. However, after a reasonable period of time you will be fairly certainwhether or not a particular source of bets is returning worthwhile profits.

Discipline will play a big part in managing your portfolio of systems. On the onehand you should not be too hasty to give up on a profitable system, if it suffers adownturn in performance. At the same time, you should be prepared to relegate asystem from your portfolio if it is consistently losing money.

Always ‘paper-trade’ a system or tipster over a significant period of time (I wouldsuggest at least two months) before actually committing any of your bettingfunds. If you are then confident enough to risk your own money on a system, thenequally you should be prepared to endure two losing months before dropping it.

If you do find yourself starting to lose money at any point, never be tempted tochase your losses. Do not increase your stakes in an effort to re-coup what youhave lost, as you may well find yourself with even greater, unnecessary losses.

To summarise, treat your betting activities in a business-like fashion. Develop aplan and have the discipline to stick to it. Below is a list of Do’s and Don’t’s. Forthose who need help to adopt a disciplined approachFind Article, stick by theserules and you will not go too far wrong!

DO’s and DON’T’s

DO have a separate account for your betting funds DO try to get value in the priceof your bets DO keep records DO take the time to analyse your betting DO bewary risking a high percentage of your bank DO operate with a bank of suitablesize DO change or drop a losing system

Do NOT bet when you are drunk Do NOT get too greedy Do NOT bet withoutpaying consideration to the price Do NOT bet if you cannot get the price YOUwant Do NOT try and get rich quick Do NOT chase your losses

Betting On Horse Racing : Sensible Money Management (part 5)

If you fail to manage risk effectively, then you will most likely never make a profitfrom betting. In this article I will reveal some of the killer mistakes most losingpunters make, day-in, day-out.

Everyone knows that gambling is a business of risk. Professional gamblers will

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Everyone knows that gambling is a business of risk. Professional gamblers willsuccessfully manage their risks and make a profit, whilst 98% of punters whoconsistently lose money, also consistently fail to manage risk effectively.

This is the concluding part to this series of articles, where I have explored the keyreasons most punters lose money, in a vain attempt to make money throughbetting.

We have seen the importance of always getting a value price when you bet. If youfail to strike bets which offer a satisfactory return on your investment, thenultimately you will lose money.

We have learned why you should have a sensible approach to staking. Never puttoo much of your betting bank at risk in one bet, in an attempt to get rich quick.

I pressed home the dangers of chasing your losses. Experienced gamblersappreciate that you will more often than not lose more bets than you win. Losingis part of gambling – accept this fact and you will not be tempted to compoundyour losses by trying to re-coup them by deviating from your staking plan.

In the most recent article, we looked at discipline, and why it is critical to treatyour betting like a proper business if you want to achieve business-like results.

In this final section, I want to conclude by further exploring the topic of riskmanagement, and developing a profitable portfolio of betting strategies.

Ask any number of professional gamblers and the vast majority will tell you theydo not rely solely on one betting strategy alone. They spread their risk byemploying several methods, and constantly reviewing the performance of eachmethod. In effect, this is much like an investor managing a portfolio of stocks,shares, and investments. This echoes back to a previous article where I likenedbetting for profit to running a business.

The disadvantage of relying on just one betting method or system or tipster, isthat if the strategy is not currently returning a profit, then you have no income.It's the classic "eggs in a basket" scenario!

If you look at the Stock Market, the value of individual shares goes up and downon a daily basis. Whereas, over time, the value of the market as a whole hashistorically risen.

So it makes sense to have a number of betting strategies running concurrently. Ifduring one particular month Tipster A is losing money, then probably System B isreturning a profit. Your aim should be to manage your portfolio such that yougenerate a net income every month.

Developing a portfolio raises a number of questions:

1) Which strategies should I employ?

2) How many betting systems/tipsters should I have in my portfolio?

3) When should I relegate a system from my portfolio?

Developing your betting portfolio

To answer the first question – the obvious response is to follow profitablesystems. But this is much easier said than done. Where do you find profitablemethods, systems, and tipsters?

It will take you time to develop a good portfolio, but a good place to start is withyour own methods. If you can read form, and you understand the concept ofvalue, then you can develop your own methods of making good selections.

Whilst you are developing your own methods, you can employ the skills of one ormore tipsters, and/or buy some ready-made systems. Before rushing out to buy acopy of the Racing Post and looking in the classified advertisements for tipsters, Irecommend you search on Google under ‘tipster review’ or ‘horse racing tipsterreview’ or ‘betting tipster review’. Adverts will always say their tipster or system isthe best, and makes amazing profits. But this is your money you are investing, andyou owe it to yourself to do some home-work.

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Look for a forum or discussion board where tipsters and systems are reviewedobjectively by customers or people who have actually used the service.

How big should your portfolio be?

This is a question only you can answer really. The more strategies you have, themore your risk is spread across a number of income streams. You could alsopotentially earn more money. However, the more methods you employ the harderyour portfolio will be to manage, and the more of your time will be taken up.

You will need to strike a balance where you are comfortable with the time-inputand the return from the portfolio.

A sensible portfolio may have five or six strategies, with another two under reviewat any one time.

Managing your portfolio

In a previous chapter I suggested ‘paper-trading’ a method for at least twomonths to test its profitability. This means you should follow a method or tipsteror system for two months to see if theoretically you would have made a profit.Once you are happy with the performance of a particular method, you can proceedto award it a place in your portfolio, and start trading with actual cash.

If the strategy doesn’t make the grade, then ‘file’ it for future reference.

You will have heard the old saying “If it ain’t broke don’t try to fix it” so you shouldnot be too hasty to discard a particular betting method if it returns a losingmonth.

However, there is also the teaching “Don’t throw good money after bad”. If asystem has earned a place in your portfolio by performing well for two months,then it makes sense to allow it two poor months before even considering itshould be relegated. That said, if you are not happy with a system and it is losingmoney, then get rid of it!

Summary

Develop a portfolio of betting strategies to spread your risk and maintain a regularnet income. Use a combination of your own personal methods, purchasedsystems Business Management Articles, and subscription tipsters. Constantlyreview your profitability to highlight any under-performing strategies.

About the author: Max Redd has been making a living betting on horse racing forover 10 years. He runs the Redd Racing betting advisory service.

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