Square
Root Betting - horse racing gambling
Like
many of you I have come across this idea of square
root betting that one sees from time to time on different
staking plan menus so I thought it may be interesting
to do a year's sample and see where it ends up. The
guy who popularised it was James Selvidge in a book
called "Money Management".
The
"ducks guts" of the idea is not to give
back any hard won profits during an adverse run of
outs. So your first question is always going to be:
is it better than flat stakes betting? Well because
of the way these formulas tend to work, the profit
on turnover (or p.o.t.) or return on investment (r.o.i.)
as others call it - same thing - may not be as good
as flat stake betting BUT the overall profit may be
greater.
Using
level stakes - through a protracted series of bets
- may well derive a greater p.o.t. but, in fact, get
a lower overall net profit because the bets are not
escalating as you gain profits.
Square
root betting is simply this: your base bet PLUS the
square root of any bank profit but ONLY while the
bank is is profit. If it falls below your starting
point, the bet is always reverted to the base bet
level - whatever you decided it would be.....e.g.
1% or 2% of your starting bank and stays there until
the bank is in profit again.
Okay
- so now you understand the basics, let's see how
it would have worked out in a 12 month betting trial.
The method I have used to run this test is a high
% success method called PFII which we have been playing
with for a couple of years. In 2011 it had just 49
bets for 22 wins (44.9% strike rate) and 35 placings
(71.4% strike rate) so it is not the method of choice
for most because it generates only limited action.
(I prefer winning action to losing action - no great
surprise there)
At
level stakes ($20 on a $2000 bank - 1% of the bank
as the base bet) it returned a profit in 2011 of $666.40
or, a profit on turnover of 67.8%. So how would those
same 49 bets have worked out if I had been using the
square root staking?
With
square root staking (base staking level $20 on a $2000
bank) on the same horses during 2011 the result is
somewhat different. The overall profit is $1268.70
or, a profit on increased turnover, of 55.6%.
The
pdf of this workout is available by clicking HERE:
So
there you have it. The square root system on a method
like this would take you a bit of extra time each
year on race days where there are more than one selection.
Over
to you. If you have further thoughts on this I am
sure others would like to hear of your experience.
Peter
/ 17.01.2012
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