This is the third installment in a series of articles on profitable betting through smart money management. So far, I’ve discussed the importance of getting value when you bet, in order to maximize the returns you get when your selections win. In the most recent article you should have learned to keep your bets in proportion to the size of your betting bank.
Today I want to examine a common mistake that often gets gamblers into serious trouble: chasing their losses.
I don’t think there are many of us who at some point have not decided to win back what we just lost by betting a little more on the next race. It is sometimes known as progressive participation.
Let’s take a simple scenario: you bet £10 on Red Rum and he loses. What is your job? Perhaps he will continue his selection methods and find another pick in the next race: Best Mate. The price is 6/4F
But, rather than place another £10 bet on Best Mate, he decides to ‘chase’ his loss from the last race. You add another £7 to your bet so that when Best Mate wins you get an extra £10.50 to win back the bet you lost on Red Rum. Good plan? It could be, after all, Best Mate is a sure winner, right? Maybe. Maybe not!
What happens if Best Mate loses? He now has £27 ‘in the hole’. But you still have a plan. Your next selection is a dead certificate winner in Even money. You place your regular bet of £10 plus an additional £27 to cover your losses so far. There is no need to worry. By the time this one arrives you will have recouped your losses and have a £10 profit to show for it too.
Let’s take a step back here. You are betting £37 to make a profit of £10. Think about it: Sure enough, you’re getting odds of only about 1 to 4 odds on a horse that’s even money on the market. It’s a terrific value!
You can escape this time, and your horse may well win. But what if, God forbid, his red-hot favorite doesn’t win? After just three bets, he has a sum of £64 when his normal bet is just ten!
Long losing streaks happen, more often than you might think, and even with short-priced picks.
If you spent a day in a casino at the roulette tables and analyzed how many times you witnessed a series of 7 or 8 consecutive ‘red’ numbers, I wouldn’t be at all surprised if you saw this happen four or five times – in a single day. Here we have a 50/50 bet, even money, that the roulette ball will land in a red or black slot. However, I was surprised to learn that the longest run of the same color (reported) was THIRTY-NINE consecutive reds!
Imagine if you were betting on black and you said to yourself every time “don’t worry, it has to be black next time… right?”
But back to the more common occurrence of a losing streak of 7 even money bets. We will be betting on red.
We place a bet of £1 on the first spin. It is black. We chase our loss by ‘doubling down’ and then bet £2. If we continued in this manner, after 6 spins we would be betting £64 to win our original £1.
I sincerely hope my point is understood. By chasing your losses, you can quickly see your bets rise to absurd levels, to win your original relatively small bet. The risk is out of proportion to the potential reward.
One last example to really drive home the point. The Racing Post organizes a tipster contest. All the major racing journalists are involved, representing the nation’s horse racing newspapers and publications. These are experts in tipping horses. Take a look at the results table any day and see for yourself the longest losing streak. Remember, these are the experts.
I looked today, and Racing Post PostData has suffered a twenty-seven losing streak this season. Twenty-seven consecutive losers from an expert tipster! And believe me, he’s not alone, just the worst offender this season so far.
There is an old saying: “Don’t throw good money on bad.” If your selections don’t make a profit with single tier bets, don’t try to make them profitable by throwing more money at them. You can survive on a profit for a while, but this approach is a disaster waiting to happen. Sooner or later, he’ll blow up your entire bank chasing a disproportionately small profit.
If your selections are not making a profit with single tier betting, change your system.
