Why Staking Plans Are Important!!

I have been asked a lot of questions regarding staking plans and what I would recommend as the best to use. Before any of us can decide what the best or most appropriate staking plan is, we have to answer a fundamental question first: ‘What are my betting goals?’

If you are trying to increase your bankroll to perhaps increase your stakes over time, then a more progressive staking plan may be more suitable. However if you already have the bankroll you require but want to try and achieve a monthly income target, then a more consistent/flat staking plan would probably be better.

It is very important that you understand what you are trying to achieve and this should be no different from having objectives at work or life/personal goals. From my experience betting randomly leads to poor decisions and being unprofitable or, worse still, going broke.

Below are some examples of different staking plans and my verdict of each one.

Fixed Staking/Level Stakes 

Betting a fixed amount on every bet, this would normally be 1% or 2% of your total fixed bankroll to enable you to cope with the inevitable losing runs e.g. for a bankroll of £1000 you would use a fixed stake of £10 or £20 per point.

Verdict – This type of plan is ideal for those people who have a sufficient bankroll in place and are looking to generate a targeted ROI or cash return. The important thing is not to set daily or weekly targets and to think longer term (one month minimum but ideally three to six months). This is because short term targets can lead to feeling pressured to chase numbers or retrieve losses which can often lead to poor betting decisions being made. There are always more races the next day and week, so wait for the right opportunities.

Percentage or Progressive Staking 

Betting a variable amount depending on the total value of your current bankroll e.g. your initial bankroll is £1000 and you decide on a 2% staking plan. Your initial bets will therefore be £20 per point. After week 1, you have increased your bankroll to £1200 so your stakes based on the 2% plan would increase to £24 per point.

Verdict – Percentage or progressive staking is great for growing your bankroll, but my advice is to take a reserved approach as opposed to betting 2% of your balance every bet. By that I mean if you start with £1000 and are betting £20 per point, set yourself a target say £1500 and once you reach that move your stake up to £25 instead of £30. This way you are locking in some profit and will not be back to square one  if you hit a bad run.

Targeted/Output Based Staking

The amount that is staked varies on each bet, depending on the targeted return. For those who use this method for betting, it gives the benefit of reducing their stake on higher priced horses (which in theory may have less chance of winning) and increases the stake on shorter priced horses.

Verdict – Whilst I understand the logic, my personal view is that I am betting on a horse because I believe that its chances of winning are better than the odds on offer (value) and has a good chance of winning the race. Based on this I would rather maintain the same level of staking on all selections and not lose any value on the longer priced winners.

The Kelly Criterion/Value Staking

The Kelly Criterion is a formula used to determine what percentage of your bankroll should be used in each bet to maximize long-term growth. I am not going to try and explain the formula because it is fairly complicated, but the essence is that when you find a bet where the price is in your favour you would increase your stake and when a bet is not in your favour you would decrease it. The formula also requires you to give each betting situation a probability of winning, so you need to be skilled in making this assessment.

The output of the formula can sometimes be to stake as much as 10-15% of your bankroll on one bet. For more information and access to a Kelly Criterion calculator go to http://www.albionresearch.com/kelly/

Verdict – I don’t understand why anyone would make a bet in the first place if it isn’t in their favour. That is like saying I think this horse has a 33% chance of winning so will take 2-1 but reduce my stake!!. I also fundamentally disagree with staking amounts of 10-15% of my bankroll on one bet. This staking plan is not for me I’m afraid.

The Martingale System

The Martingale System works on the principle that you bet 1pt and if you win you keep risking 1pt until you lose. When you lose, you double your bet and if you lose again you re-double again and keep re-doubling again until you finally win. Once you have won, you then go back to betting 1pt.

It is clear to see that with this system ultimately you can’t miss as long as you win one bet before you stop betting or die. Unfortunately the downside is that if you are betting £100 per point and lose 12 bets in a row (we all know this can happen) you will need to risk over £400k to win £100.

Verdict – This system is probably more associated with roulette and other casino games, but people have and will use it in horse racing. It goes against everything I believe in respect to value and you need a huge bankroll to cope with the inevitable losing run. Definitely one to avoid.   

Dutching 

Dutching is a method of betting multiple selections at different stakes with a view to a obtaining the same return should any one of the selections win. (This could be two or three horses in the same race or two or three selections across multiple races.) There are many different sites offering dutching calculators  but the one at Oddschecker is as good as any http://www.oddschecker.com/betting-tools/dutching-calculator

Verdict – Dutching is a great tool to have in your betting armoury and I make best use of it when I have two horses I really fancy in one race. This is especially relevant where one may be well fancied and the odds are not very low e.g. 3/1 and the other is at longer odds say 8/1. In this scenario dutching may be better than backing each as a straight win. Backing a second horse in a race through dutching is also often mathematically better than betting one horse each way.

In summary

You will hear and read about lots of different staking plans but nearly all will be a either a sub-set or variation of those discussed above. The important thing is to use the most appropriate type of plan to help achieve your own goals.

At the end of day, a staking plan itself will not make you successful you still have to find winners. An appropriate plan however will definitely help but using the wrong type of plan or one that is just clearly way to aggressive could lead you to losing your entire bankroll even when you are finding winners.

18 Comments

  • Keith Hodgson

    Reply Reply 16th January 2015

    Hi Simon
    Tried once again to place a bet with Boylesports this morning and they refused to take my bet,even tried halving my stake no joy.
    Phoned customer services and they wouldn’t tell me the reason why,so I have withdrew my money.
    Hope this is not the start of me having my accounts closed down

    • Simon Patton

      Reply Reply 16th January 2015

      Hi Keith,

      That is really strange given the stakes you have tried to get on, don’t really understand it but maybe something to do with your account history?

      Simon

  • Ian Haggo

    Reply Reply 15th January 2015

    Very interesting and informative article Simon. I’m slightly surprised that you didn’t mention the Maria staking plan – not that I use it but it does seem to be quite popular.

    I use my own version of progressive staking, which works particularly well with laying systems and backing systems with a decent strike rate. My first stake is, say, 4% of the bank, and if it wins my next stake is 4% of the higher of my previous highest stake or my total bank less half the profits. I never reduce my stake. So if my first bet loses my next bet is 4% of my original bank again; I keep the same stake until my bank gets above its starting level, when I increase my stake to 4% of (current bank less half my total profit) and keep it at the same value until it warrants being increased again.

    • Simon Patton

      Reply Reply 15th January 2015

      Hi Ian,

      Thanks for the comment. To be honest there are hundreds of staking plans out there that could be mentioned but they are all variations on themes that normally already exist. As you say if you are using a 4% staking plan you really need strong strike rates so should be fine for laying but possibly more restricted with backing. At the end of the day it is what works for the individual their level of comfort with risk.

      Thanks Simon

  • Keith Hodgson

    Reply Reply 15th January 2015

    Hi Simon
    Would you believe it tried this morning to place a bet with Boylesports on Trickaway they rejected my bet.It came up something to do with risk assessment, phoned customer service they said they couldn’t disclose why this was the case. Apparently it was out of there hands, they suggested I reduce my stake or take SP.
    For gods sake I am only betting £10 at a time,and there is only £166 in the account.
    I have only had the account for about 3 month is this normal procedure?

    • Simon Patton

      Reply Reply 15th January 2015

      Hi Keith,

      That sounds crazy, the only thing I can think of is that they had a run of bets (or a large cash amount) on that horse in a very short space of time, fortunately BS are rarely the best price in the market (although twice this week which is strange)

      Thanks Simon

  • Keith Hodgson

    Reply Reply 14th January 2015

    Hi Simon
    Interesting article regarding staking plans.
    I don’t think I would ever go down the martingale route,too scary for me.
    I had actually thought of doubling my stakes if and when i double my bank, but after reading your article I think it’s a good idea to raise the stakes by half instead.
    So would you suggest revert back to your original stake if you ended up back to square one

    • Simon Patton

      Reply Reply 14th January 2015

      Hi Keith,

      Taking the example of a £1000 bank, i would go to £25 per point at £1500 and if the bank reduced back to say £1200/£1250 I would revert back to original £20 stake until I got back to £1500 again. There is no magic number where you would revert back just how I would probably approach it.

      Thanks Simon

  • charles mcgreevy

    Reply Reply 14th January 2015

    Yeah I use £2.50 trixie as I said only use small stakes as the losing runs can be managed with small stakes and when all selections win the cash back can be very lucrative.I prefer small accumulative bets to single bets as losing hurts more when your selection doesn’t win.And can cause chasing the win which puts the bookie in a much more favourable position however some gamblers prefer single win or each-way betting I have tried these types of bet but always come back to my own method as I find I have more success and control over my gambling.

    • Simon Patton

      Reply Reply 14th January 2015

      It is really important that you are comfortable and confident with whatever approach you take, good luck!!

  • COLIN SPARKS

    Reply Reply 14th January 2015

    HI SIMON I ALWAYS USE 10% OF THE BETTING BANK IF THEY WIN. THE NEXT BET IS 10%OF THE NEW BALANCE IF THEY LOOSE ITS 10%LESS OF THE NEW BALANCE MY TARGET IS TO EQUAL MY SALARY MONTHLY AND USUALLY A BIT MORE. BUT THEN I WAS TAUGHT BY A PRO GAMBLER AND DAILY WINNERS I FIND QUITE EASY. AS LONG AS YOU STICK TO THE RULES THERE IS A LOT OF MONEY TO BE WON ON HORSES.

  • COLIN SPARKS

    Reply Reply 14th January 2015

    HI SIMON I HAVE ALWAYS USED 10% IF I WIN THE NEXT BET IS 10% OF THE NEW BALANCE IF I LOSE ITS 10%LESS OF THE NEW BANK I ALWAYS STAY IN PROFIT AT THE END OF THE MONTH THAT INCLUDES LOOSERS AS WELL THE WINNINGS EITHER EQUAL MY SALARY OR A BIT MORE. I B ELIEVE WHEN YOU ARE TAUGHT BY BY A PROFFESSIONL GAMBLER WINNERS DAILY ARE VERY EASY TO FIND.

    • Simon Patton

      Reply Reply 14th January 2015

      Hi Colin,

      It is great to hear you are doing well. It really depends what the average odds are you are betting at. Betting 10% of your bankroll means you are only 10 losing bets from busting your bank and even betting 2/1 favs mathematically you could expect to hit a losing run of 7-10 at some point. At the end of the day it was what suits and works for the individual and propensity to risk.

      Thanks Simon

  • Paul

    Reply Reply 14th January 2015

    I don’t like the original martingale, but am testing something’s based on it.
    Like I will lay at odds of 1.3 or lower, my loss then is very low, and can add my loss to my next bet, but liabilities don’t get so big so quick. I also set my losing limit at 10pts before sstarting again.
    I’m also testing the same thing really, just backing over 4, and doing the same thing add enough to cover my loss plus a normal stake bet, but as reversed to a lay, my winning is a point and not the stake, that’s my liability, the same as a lay.

    • Simon Patton

      Reply Reply 14th January 2015

      Hi Paul,

      Thanks for your comment, I totally understand the reasoning behind both things you are testing and the laying angle will definitely keep your liabilities a lot lower even over a sequence of losses, good luck!!

    • COLIN SPARKS

      Reply Reply 14th January 2015

      THANKS FOR THE COMMENT SIMON APPRECIATED I ONLY HAVE ONE SURE BET A DAY AND THANK GOD DONT COME ACROSS MANY LOOSERS

  • charles mcgreevy

    Reply Reply 14th January 2015

    I have read your article and found it very interesting however I use my own staking plan for each bet I place.
    This is a simple plan I use relatively small stakes for my betting I prefer using a trixie bet as this suits my staking plan of 1 point per trixie giving me 3 equal doubles and a treble so my stakes would be 1/4 of a point on each part of my bet when all 3 selections win the payout can be 10 times my initial outlay depending on odds for each selection.

    • Simon Patton

      Reply Reply 14th January 2015

      Hi Charles,

      Thanks for your comment, I am assuming then if you were betting a nominal sum of £10 per point you would actually be placing a £2.50 trixie? I have to say I am not a huge fan of accumulator bets but if I had to choose one to do the Trixie would probably be the one I would use because the strike rates can be ok.

      Thanks Simon

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