Average Odds, Strike Rates And Profit

Over the last 2 months I have received lots of comments and being asked many questions about strike rates, average odds and losing runs. As a result of this I wanted to write a short piece on the importance and relevance of these statistics and their link to delivering long term profit.

I am sure that many of you will have read articles on why having the correct betting mind-set is imperative to long term success. This is a huge topic in its own right and whilst it is very important it is not something I want to dwell on here but I will make links to it. Another area that is also hugely important is to have a basic understanding of the maths involved in sports betting.

There are thousands of different systems and services in existence but ultimately whether they are profitable or not will be determined by how often they deliver winning bets (Strike Rate) in relation to the odds that can be obtained for their selections (Average Odds). As part of understanding and managing risk and emotion it is also helpful to know what the potential downsides can be in this case ‘Longest Losing Run’

Lets look at Strike Rates and Average Odds first

A simple example

Suppose you have a strike rate of 33.3% i.e. you are able to guess correctly 1 winner every 3 races. This means if your stake is £10.00 per race then you spend £30.00 at the bookies for your three races. However one of the bets will be a winner. The question is do you make a profit?

The answer of course is that it depends on the odds you get from the bookie for the horse that wins. If the odds were 2/1 you would break even, less than 2/1 you make a loss and more than 2/1 you make a profit.

How do you calculate your required strike rate from your average odds?

All you need to do is divide your average odds (decimal) into 100. Therefore if over 100 bets your average odds are 6.0 (5/1) then the required strike rate to break even is 100 divided by 6.0 = 16.6%, any strike rate above that will produce a profit.

This is important to understand for two reasons, firstly so you have a clear understanding of what is required to make a profit but secondly to help manage your expectations and maintain a healthy mind-set. I spend a lot of my trying to educate people that if you are backer of horses then betting will be more about losing than winning (bets not profit) and it is essential that you both understand and are prepared for this.

If your average strike rate is 20% then over time you can only expect to win 1 in 5 bets or perhaps be in profit 1 in every 5 days but as long as the average odds are over 5.0 the winners will compensate for the losses and you will make a profit.

Real Example

By way of giving a real example please see below the analysis of Patton Racing Profits since re-launch from November 4th 2014 to Jan 22nd 2015. So as not to skew the figures the analysis only contains straight win bets and e/w selections have been removed.

Average Odds; 5.62

The required strike rate to break even is therefore 100 divide 5.62 = 17.8% (strike rate for all bets is 23.6%)

Actual Strike Rate; 195 bets and 41 wins = 21% (strike rate for all bets is 23.6%)

The positive difference of +3.2% between the Strike Rate break even requirement and the actual has contributed to the +56pts that the service has delivered.

Longest Losing Run

Depending on your Strike Rate it is also possible to calculate what you can expect your longest losing run to be over 1000 bets. The actual calculation that is used is below and you will require a calculator with a logarithm button on to complete it.

Log(RUNS) / -Log(PROB)

To make things much simpler please see below an easy to use chart that works in 5% Strike Rate increments.

Once again to give a real example, since launching in April 2014 the average Strike Rate (all bets) for Patton Racing Profits has been 26.6% (802 bets). Using the table above this means that we could reasonably expect there to be a losing run of approx 22-23 bets over 1000 bets. The actual longest losing run for PRP to date has been 19 bets.

As with the Strike Rates and Average Odds it is important to understand this statistic because that inevitable losing run will happen at some point and it is important that you are able to rationalise it and keep things in perspective when it does.

Summary

The basic statistics above are important for two main reasons. Firstly you should really understand how and why your betting is going to deliver you profit and what is required to do this and secondly to allow you to manage your own personal expectations regarding strike rates and losing runs and hopefully to support you to take some of the emotion out of your betting.

Nobody like to lose bets but it certainly helps if you can logically put things into perspective. Try to think of your betting as an investment with your product being horse racing odds (not the races themselves). 

Thanks Simon

11 Comments

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    Reply Reply 26th November 2016

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    Reply Reply 14th November 2016

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  • Mr Jdt Jones

    Reply Reply 29th April 2016

    I have a 75% percent strike in getting winners but i do accumulators and get one wrong every race out of 7 all the time

  • David Berry

    Reply Reply 5th March 2016

    Using a 100 point bank @ 2% stakes is what i do but im looking for a way to increase my stake but also make a profit and be able to withdraw on it, would you suggest its best recalculating your stake as suggested above until im in a position to withdraw or using the same suggestions increase my stake monthly @ a fixed amount i.e 50% of previous bank and withdraw any profit above that figure i.e starting bank 100 next bank 150 P&L 175 withdraw 25

    • k

      Reply Reply 4th July 2016

      have a look at the square root system..

  • Joe Jenkins

    Reply Reply 20th September 2015

    Hi Simon

    My Strike Rate on my “NAP of the day” is 56% with AVO of 2.46, my SR for my “Double of the day” is 50% with AVO of 2.84.

    If I just want to do one a day, which should I pick? Or would it pay to alternate/split my stake?

    Thanks

    Joe

    • Simon Patton

      Reply Reply 26th September 2015

      Hi Joe,

      I don’t know from your e-mail the number of bets that make up your stats, but from my experience you are far more likely to have far more volatility with your doubles so my advise would be to stick to the singles given that the AVO and strike rates are not that different.

      Thanks Simon

  • Will

    Reply Reply 23rd February 2015

    one could conclude from the above sound advice that strict money management is required to mitigate the risk of those inevitable losing runs.

    I know that there are lots of crazy staking plans out there and I am only just starting on my journey of sports investing.

    My current staking plan for the one service I currently subscribe to is to bet level stakes of 2% when the bank increases by 25% I will recalculate the 2% stake.

    Using the maths you should be able to work out what starting bank you require ie a 50 point bank, 100 point or 200 points.

    As you gain a larger bank you might want to improve the risk management and only stake 1%.

    • Simon Patton

      Reply Reply 23rd February 2015

      Hi Will,

      Thanks for the comment.

      I think your staking plan is very sound and very similar to what I would suggest. I would very rarely use more than 2% of the total bank on any single bet and I would always set a bankroll target before increasing the stakes like you have suggested, this way you actually lock in a little of the profit before increasing stakes.

      If you are betting 2% of your bank for each bet I would also suggest a 100pt bank. Bankroll management is a very important part of the betting process and part of the discipline required for long term profitability. Even the month where my own service had the losing run of 19 bets the drawdown never went beyond 29% (71pts remaining out 100pt bank) so no pressure on total funds.

      Losing runs will happen whoever you are and you have to be both set up and mentally prepared for them. I read last week that Hugh Taylor (Sporting Life/At The Races) has in the past exceeded 50 consecutive losers, and Tom Segal (Pricewise in Racing Post) had losing runs of 48 and 37 last year but they still made profit across the year.

      Best of luck

      Simon

  • David

    Reply Reply 22nd February 2015

    It all seemed to make sense early on.

    However, why should a SR of 26.6% expect a longer losing run than a SR of 25%?

    • Simon Patton

      Reply Reply 22nd February 2015

      Hi David,

      A good spot thank you, should have said 22/23 bets I have amended.

      Thanks Simon

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