Winning and Losing Streaks…

Following the last posting about Probability and Price, it’s probably wise to consider winning and losing streaks.

Winning streaks are good, yet the caution is – every winning streak comes to an end. You see, it’s tempting to believe a winning streak will continue, and as a result of this belief the undisciplined punter will parlay larger amounts in an effort to win big.

I ran a test simulation several times to see if 1,000 bets over time would yield an encouraging winning, or discouraging losing streak.

Why does it matter?

Because, for one, I am certain that I love winning streaks more than losing ones. I am also certain there are professional punters out there who are not discouraged by long losing streaks so long as they know their system is statistically expected to return a profit over the long haul.

Three different sets of Prices and Strike Rates for each test follow:

Test Price, Strike Rate, Max. Win Streak, Max. Losing Streak

1. $4.00, 25%, 5, 35

2. $2.00, 50%, 11, 11

3. $1.33, 75%, 35, 5

Note: The price and S/R relate to a 0% Profit on turnover – a break-even situation. In a future posting I’ll explore what different prices do to POT.

If you love winning streaks then you’ll love the 75% strike rate test.

Does the 50% S/R and Max. Losing Streak of 11 sound right?

If you’ve ever observed a roulette session, or know of a roulette player, I’m sure they’ll tell you of even bigger win / losing streaks on the red / black or odd / even.

The perception of the ultimate outcome, in my opinion, rests with how great or devastating the game was – hence the biased view of the player.

When considering any strategy where chance is involved (and can be qualified, eg. 20% or 60%) it’s important to look also at the potential for winning and losing streaks, and especially your ability to withstand them.

Probability and Price

How do Bookmakers set their prices ?  How do insurance companies set premiums ?

The ultimate answer:  demand.

To begin with however a bookmaker must have an opinion, or base it someone elses opinion who has a good track record, as to the way an event will run.

Theorectically (at least in my opinion), a 20% chance should be fairly priced at 4-1, a 50% chance 1-1, and 80% chance at 1-4 on.

In order to win long-term, a premium needs to be added to the price – let’s say a 50% premium. So a $5 fair price needs to be listed at $7.50 to make the betting proposition worthwhile. In the case of insurance companies, they are the bookmakers and in this case charge a premium of $7.50 (or more, depending on demand).

In his book titled ‘Money Secrets at the Racetrack’, Barry Meadow puts it this way:  Analyze chances, rather than attempt to pick winners.

The ideas presented in this book has changed the way I view all betting propositions, whether it be on sport, horses, or trading options. Given a set of circumstances that you understand, what is the probability of it going the way you want it to based on experience, and / or statistical data, and / or supply and demand.

Whatever factors you decide on to include in your assessments, you can then determine from historical data how accurate you are and this becomes another factor to consider in future decisions.

Welcome to PuntersDigest.com

Thankyou for visiting this site. Over the course of the next few days and weeks, I'll bring you the strategies & methods I use to make money on horse racing & sports betting – in most instances risk-free and guaranteed.

If you want to read specific topics which are not covered here, please drop me a note. That goes for interviews as well – let me know who you want to know about.

Enjoy!

Aaron Hay