TheBetPlan – Analysis
Back in March 2009 I showed how TSM can be used when analysing selection systems. Back then the tipster service I used was punterprofits. It is now time to bring the article up to date with a look at another tipster service that is showing great potential since they refined their selection system last August.
The Staking Machine Software does not tell you what to bet on and how often to bet. It does however tell you how much to bet. The Staking Machine or TSM for short is designed to handle the money management side of betting. Money management is all about managing risk. Managing risk is all about research. And that is where TSM comes in.
The bench mark for all staking plans is level stakes. By this we mean a fixed unit per bet. A selection system that produces a profit to level stakes has a positive edge. You cannot make money from betting without an edge. Before using TSM you must have a selection system that has an edge.
When using TSM and deciding which staking plan should be used there are many factors to consider. It is not all about which staking plan makes the most profit. To highlight some of these factors we shall use TheBetPlan Selection System. They have been up and running for several years now and have been proofing their results to the Racing Index tipster site since 2009. http://www.racing-index.com/tipsters/tipster-performance.php Using the built in Racing Index Tipster parsing feature in TSM we can import any tipster listed on their database directly into TSM.
TheBetPlan selection system was refined in August 2010. I have been told this has meant fewer selections. However a higher strike rate has been achieved. Since 1st August 2010 there have been 345 bets. (As of 26/03/2011) . If you want to have a look yourself please download the TSM File. This is the exact file all analysis has been carried out on. So let’s look at the facts. Before looking at any staking plans, we must first look at all the available data in more detail. If you are following this in TSM, turn on commission and set it to 5%. I have used Betfair SP when extracting the data using the Racing Index Tool in TSM.
The screenshot below is taken from the TSM Quick Stats tab after all the previous bets have been loaded into TSM.
Total Bets is 345. Clearly the higher the number of past bets the better our analysis will be. 345 is a fair amount of past data. Ideally I would like more. But we can work with 345. There have been 168 Winning bets. That provides a strike rate of 48.7%. Average odds are 2.69 whilst the average winning odds is 2.34.
E.L.S. – Expected Losing Sequence – The math behind the formula to calculate this is beyond the scope of this article. It is also beyond me to explain it. However, for those with Microsoft Excel you can use this formula.
=LN(n)/-LN((1-(sr/100)))
where n = number of bets and sr = strike rate as a percentage. So in our TheBetPlan example.
8.8 = LN(365)/-LN((1-(48.7/100)))
You can see further down the quick stats tab that the longest losing sequence was in fact 6 between 328 and 333. 1 or 2 above/below the E.L.S. is fine. Anything more than that indicates that during your losing run, your strike rate was more/less than expected. Note that as the total number of bets analysed increases so does the E.L.S. For the E.L.S. to be accurate you need a good sample of bet data. In TSM there is an E.L.S Calculator that you can use to see how the E.L.S will change in line with an increase in the number of bets.
Using a strike rate of 49% we can see that at 400 bet’s we can expect a losing run of around 9. This increases to 10 after 900 bets. After 2000 bet’s this increases to 11.
When choosing our staking plan we must take in to account the E.L.S. in order to reduce our risk.
The next thing to note is the on the Quick Stats Tab is the Required Strike Rate. This is based on the average winning odds. For odds of 2.34 your strike rate must be at least 42.8% to break even. The selection systems strike rate of 48.7% passes this test.
As mentioned earlier, any selection system worth using must have an edge. TheBetPlan system has an edge of 13.83%.
Edge = ((Average Winning Odds*1-1)*(Strike rate/100))-(1*(1-(Strike rate/100)))
Simplified Edge =( Average Winning Odds – 1 * Strike rate) – (1 – Strike rate)
For every £1 staked you would expect to make a profit of 13.83p.
The next thing to look at is S.D. – Standard Deviation of all the odds. The standard deviation is a measure of how spread out a set of numbers is. A high standard deviation indicates a wide spread range of odds where as a small deviation indicates a small range of odds used. The standard deviation can in one glance indicate the size of the range of odds in the selection system. For a normal distribution of data it is known that 68.27~% of members lie within 1 S.D. of the mean, 95.45~% within 2 S.D. and 99.73~% within 3 S.D. TheBetPlan SD. is 1.17. This is very low. There is clearly a very narrow odds range filter in place in the selection system.
So far everything is looking good and it looks like we should have a reliable selection system. We can expect a losing sequence of 9 at any point. As the amount of bets is relatively low at 365, I will take the assumed E.L.S. at 2000 bets. As discussed earlier this is 11. Therefore any staking plan we use MUST be able to allow for 11 losses in a row.
Going through the back staking plans we have on offer in TSM – Level Stakes, 1326, D’alembert, Fibonacci, Percentage, Parlay, Pro, Secure, Fixed, Kelly, Square Root, Labouchere, Retirement, Bookies Bank, the infinite settings of XYZ, Up X Down Y, L.P.28, Stop at a Winner, Recovery, Rolling Doubles and Recovery Type2.
When comparing staking plans, there are always several problems. Clearly to increase profits over level stakes, increased stakes will have to happen. The question is how much of an increase is safe. How much risk do you want to have?
The rest of the article is subjective. It is my own opinion. It is up to you how much risk you wish to expose yourself too. You may or may not agree with the rest of the article. But hopefully it will give you some ideas.
How much of our bank should we be using as our initial stake?
This is my own method of deciding on my initial stake. The ELS is vitally important here. Assuming your starting out with a betting bank of £200 your stake needs to allow a losing run of 11 and more. Just because a losing run of 11 has occurred does not mean that it will not happen again after just one winner. I always like to have a betting bank that can cope with the ELS multiplied by 4. By that reasoning your initial stake needs to be -
Start Bank / 4 / ELS = 200/4/11 = £4.54
To work out your percentage to bet we do 100/200 * £4.54 = 2.27%.
The bench mark to all staking plans is Level Stakes – TheBetPlan results in £36.43 profit to £1 stakes with a Return on Investment of 10.56%.
We can safely use a start bank of £200 and an initial percent to bet of 2.27%. This produces a profit of £165.5. A further take on level stakes that I like to use is to increase the percentage to bet after x amount of bets. Using a start bank of £200 and an initial percent to bet of 2.27% – If we increase/decrease the stake after every 50 bet’s we can actually achieve a profit of £209.55. The ROI decreases slightly to 9.66%
Remember that any selection system that does not make a profit at level stakes does not have an edge. You are on dangerous territory if you are trying to make money with no edge.
1326, D’alembert and Fibonacci are all designed for use where odds equal 2 i.e. games of 50/50 chance. So in selection systems that produce low odds they can be useful to look at. All these staking plans rely on a sequence of results. The next stake is determined by the previous result. Sometimes shuffling the sequence of results will highlight serious flaws.
In TSM there is feature called the confidence test. This does exactly as discussed above. It shuffles your data several times and records the Cumulative total and ROI on each occasion. An average is then found.
Using a start bank of £200 and a percent to bet of 2.27% we have the following results for 1326. A profit of £508.5 and a ROI of 10.15%.was produced. I ran the confidence test several times. On each occasion TSM told me that I had better than expected results. Also note the largest stake was £113.24. If that occurred at the beginning of the sequence it could put a very large dent in your pocket.
The D’alembert Staking plan is great to use as long as you have a realistic reset limit. Let’s look at using a reset limit of 9, a start bank of £200 and an initial percent to bet of 2.27%. A profit of £689.47 and a ROI of 12.27% were produced. At first glance this looks great. But note the largest stake here was £36.32. This is just under 1/5 of your entire betting bank. For me that is simply too much. If you had that losing run at the beginning of your sequence you would become bankrupt. Let’s look at what happens if we reduce the reset limit to a more reasonable 3. A profit of £278.68 and a ROI of 13.23% are shown. The largest stake here is only £9.08
Fibonacci staking plan – Using a start bank of £200. And initial percent to bet of 2.27% and a Fibonacci sequence of 1, 2, 3, 5, 8, 13, 21 and 34 shows a profit of £776.58 and ROI of 17.97% Note the largest stake of 21 units or £95.34 in this instance. This could well be nearly half you betting bank.
We now move on to Percentage betting. This is essentially level stakes however the stake is relative to the cumulative total. The beauty of percentage staking is that you should not ever become bankrupt providing you have your settings right. Using a start bank of £200. And an initial percent to bet of 2.27% produces a profit of £195.61 and a ROI of 8.35%.
Moving on to the Parlay Staking Plan – The problem here is the maximum stake. Realistically what is our maximum stake? £200, £400 or £1000? With this staking plan your stake can increase in size dramatically as your winnings are rolled over continuously. Sticking to a parlay reset limit of 2, a start bank of £200 and an initial percent to bet of 2.27% produces a profit of £220.54 and a ROI of 10.07%. The largest stake here is £33.01. The difference here is that this is profit you are betting and not your bank. The parlay staking plan is also subject to the sequence of data. After running the confidence test there are no concerns. Interestingly a parlay reset of 3, a Start bank of £200 and an initial Percent to Bet of 2.27% produces a loss overall.
Moving onto the Pro staking plan – This is one of the most aggressive staking plans there are and is ideally suited to high strike rates. With an initial start bank of £200 and an initial percent to bet of 2.27%, the staking plan at first glance looks good producing a profit of £1534. But look at the graph below -
There are several large downward troughs. These indicate large stakes. At one point you would be staking half of your betting bank in one bet. The largest stake was £211.38. I am not a fan of the Pro Staking Plan on any level.
The secure staking plan is low risk. However on this occasion as all the odds are in such a narrow odds range we can ignore this staking plan as it does exactly the same as the Fixed Staking Plan.
Fixed staking plan – This sets a fixed target per bet. This is great for larger odds but when betting on odds on favourites, the stakes can increase massively. In TheBetPlan selection system there are 3 bets that are less than 1.2 in odds. Using a start bank of £200 and a target of 5% (£10) then your bet would be £50. That’s 1/4 of your entire start bank.
The Kelly Staking Plan is always controversial. Some hate it. Some love it. The Kelly Staking Plan only allows you to place a stake on bets that offer value. We discussed edge earlier. The Kelly Staking Plan only places a bet where there is an edge. In TSM even if no stake is offered, a bet is still listed. The stake is shown as zero so that direct comparisons between staking plans can still be made.
Using Kelly Settings of 49.7% as our expected strike rate and a divisor of 4 with a start bank of £200 the profit shown is £346.34. Interestingly it also shows a ROI – Return on Investment of 14.41%. The largest stake was only £20.67. There is of course the danger of bankruptcy still early on if you get your expected 11 losses at the beginning of your sequence. The cut off point for a value bet is around 2.1 using TheBetPlan data. Anything under 2.1 is a no bet. Roughly 125 bets were no bets because of this.
In the Square Root Staking Plan when the cumulative total is in profit, the profit is square rooted. This is added to your initial stake. With a start bank £200 and an initial percent to bet of 2.27% produces a profit of £267.95 but a low ROI of 5.54%
The Labouchere Staking Plan – The general accepted sequence of numbers used is 1, 2, 3, 4, 5, and 6. This shows a profit of £233.92. The beauty of the Labouchere staking plan is you know what your highest stake will be. (£20) as there is a cut off.
The next staking plan is the Retirement Staking Plan. This is designed to make use of your Average Winning Odds. The Retirement Staking Plan stakes are kept in check by using a divisor of twice your Average Winning Odds. This is based fractionally so our average winning odds of 2.34 becomes 3.34/1. The initial divisor is therefore 7. In TSM you enter 3.34 as the average winning odds. The stakes increase but they remain relatively stable. The shortfall in the retirement staking plan is when we get 2 or 3 long losing runs right next each other. The stakes can continue to increase and our bank can take big hits.
With aggressive recovery Staking Plans I also decrease my initial stake. Remember we use Start Bank / 4 / ELS = Initial Stake. On this occasion I like to use Bank / 6 / ELS = £3.03. Our initial percent to bet is therefore 100/200 * £3.03 = 1.51%
Using a start bank of £200, initial percent to bet of 1.51% and average winning odds of 3.34, the profit shown is £139.36. The ROI is 11.04.
Bookies Bank is next on our list. I have always liked this staking plan. It is a gentle loss recovery staking plan. As with the Retirement Staking Plan our initial stake is adjusted. With a start bank of £200 and an initial percent to bet of 1.51% the profit is shown as £120.02. The largest stake is only £3.54.
The next staking plan is the XYZ staking plan. This is the do it yourself staking plan. I will not be discussing this one as it’s designed for people to add their own sequence based staking plans.
The Up X Down Y staking plan is similar in essence to the Fibonacci staking plan but can be adapted to work with larger odds. The only word of warning is that the sequence can be infinite. That’s fine as long as you consider that in your settings. Again I will miss out this staking plan.
The next staking plan is L.P.28. This is designed for longer odds selection systems. The sequence allows for a losing sequence of 28. Our ELS of 11 means this staking plan is really just level stakes.
Recovery Staking Plan – There are so many settings for this staking plan I shall just go over the default settings.
As it is a recovery staking plan we use the lower initial percent to bet of 1.51%. The profit is £160.34 and the ROI is 11.65%. If we change the No. of Bets to 2 instead of 4 this increases the profit to £170.7. The ROI slightly decreases to 10. 77%
Stop at a Winner or SAW is once more a recovery staking plan and one I am wary of. Stakes can increase dramatically if you have a long losing run. Always have a limit. A realistic limit in this case is 3 or 4.
Even using a limit of 3 we get a deep trough at the beginning. Look at the graph below -
Rolling Doubles is a great staking plan for high strike rate selection systems. The stake will only increase after a winning bet. Using a start bank of £200 and a percent to bet of 2.47% a profit of £184.34 and a ROI of 10.82% is produced. The largest stake is £23.71. This isn’t too much of a problem as this is profit rather than our bank. This is another staking plan that relies on the sequence of results. Running the confidence test several times indicates that on average we would actually expect a larger profit and a better ROI than we actually achieved.
Recovery Type 2 – In this staking plan the stakes only increase after a win. The stake increases to recover the current loss in the current series. The graph below shows a start bank of £200 and a percent to bet of 2.47%
There are a couple of large reverse spikes that indicate large stakes relative to the betting bank.
Conclusion
The amount of risk you want to expose yourself too will determine which staking plan you choose to use. In all the examples above I have tried to reduce the risk of bankruptcy by using settings that allow for the E.L.S. With most of the staking plans there is an option to use a ratchet mode. This means that at no point will the stake decrease. I am aware that TheBetPlan advocate a percentage ratchet mode staking plan with their selection system and there is no reason not to consider their suggestion.
In my view the Staking Plans that will work well with TheBetPlan and will continue to work well in the future with minimal risk attached are Level Stakes, D’alembert, Percentage Betting, Parlay, Kelly, Retirement, Bookies.
Using the right staking plan can increase profits safely. Going forward one can never say for certain that the selection system will produce the same results. However having looked at all of the available data and analysed it best we can we can make educated assumptions.
The important thing to remember and ask yourself with any staking plan is this – Can my staking plan handle the ELS – Expected Losing Run (which is 11 in this data)? And then possibly another losing run of 11 soon afterwards?
All analysis has been used solely in TSM.
