At TSM I’m often approached by tipsters asking me to look at their historical data and tell them the best staking plan to use. Too often I get the data through and within seconds of running it through TSM I can see straight away that there is no edge. Or if there is an edge - It is too small.

Introduction

So when I had an email from Matthew Walton regarding his Pro Backer Selection System it was a nice surprise to see a set of data with an edge of over 30%. So this is the data I received. 257 bets dated from 30/04/2011 up until 02/08/2013. The first thing I noticed is that within the 257 bets there were 12 Each Way bets. TSM is currently is unable to mix Win Bets with EW bets. Now what we could do is simply edit the odds to make them all win bets. Instead I have opted to remove them. To £1 stakes the 12 bets made £2.3 profit. So I’m not too worried about missing them out. That leaves a dataset of 245 bets spread over more than 2 years. Before we start looking at staking plans we always look at level stakes.Any selection system that is not making a profit a level stakes should be binned. If there is no edge you will always lose money in the end.

We can see from the Quick Stats screenshot in TSM we have 245 bets and a strike rate of 40.4%. I won’t go through every stat here. The most important ones at this stage are the Edge and the E.L.S. - The Expected Losing Sequence.

Edge

The edge is a very healthy 33.94%. This means in real terms that for every £1 staked you would expect to make a profit of 33.94p. Just to clarify something here. When we are looking at Level Stakes the Edge is the same as your ROI – Return on Investment.

Expected Losing Sequence – E.L.S.

Currently the E.L.S. is just over 10 bets. This matches our actual longest losing sequence of 10 bets. The math behind the formula to calculate E.L.S. is beyond the scope of this article. It is also beyond me to explain it. There is an E.L.S. calculator available to use in TSM. There is also a free to use online version of the E.L.S. Calculator. The formula used is also detailed on that page. The link to the online calculator is - http://www.thestakingmachine.com/els.php

Start Stake and Start Bank

Money Management/Staking Plans - whatever you want to call it, is always going to be a subjective matter. What one person sees as low risk another person will see as high risk. Personally I like low risk. For me that means treating betting as a business. In most business if you spend all your money that’s it. Game over. And it’s the same for betting. If you spend all your betting money it’s game over. Which is why you must take notice of the Expected Losing Sequence. Any staking plan you use must be able to withstand the E.L.S and some more. In TSM there is a graph for sequences that can be created. We can see that there were 3 occasions where there was a losing bet 8 times in a row. There was 1 occasion where there were 9 losing bets in a row. And there was 1 occasion where there were 10 losing bets in a row. So what is stopping our losing runs happening straight after each other? Is it expected to happen? The chances are very small but it could happen. So you need to be prepared for that to happen. Any staking plan we use must allow for 10 losing bets in a row. And then at least another 10 losing bets in a row. On this occasion I’m going to start with a stake ratio of 2 x E.L.S. If the start bank is £4000 that would be 4000/20 = 200. So we would start with £200 as a starting stake. In real terms the stake is 5% of the total bank. After doing some analysis we can always adjust this ratio later. After doing our initial research it may well be that need to use 3 x E.L.S. or even 4 x E.L.S.

Staking Plans

Back to the Pro Backer Results. From this point onwards we are going to use 5% of the total bank. The starting bank is £4000. Each stake is therefore £200. Level Stakes Result – We know we have a good edge. But how much money would it have made at £200 level stakes? The Cumulative Total stands at £20,646. Take off our start bank of £4000. This leaves a healthy profit of £16,646. Percentage Staking Plan Results - The most common alternative to level stakes is Percentage Stakes. With Percentage staking we would bet at 5% of the total bank. So our initial stake would start off at £200 but would increase/decrease relative to the cumulative total. The Cumulative Total stands at £103,972. Take off our start bank of £4000. This leaves an overall profit of £99,972. The only problem with this staking plan is the next stake is at £5,198. That is pretty much unmanageable. We will see what we can about this later. Percentage Staking Plan with Ratchet Mode Enabled (Never Decrease Stakes) – A popular variation of the Percentage Staking Plan is where the stake is never decreased. Once it hits a new high it stays at the new high. The Cumulative Total stands at £209,567. Take off our start bank of £4000 leaves a profit of £205,567. The next stake in this scenario is now at £11,206 which again is unmanageable.

Staking Plans and Profit Taking

In real life we should be treating our betting as a business. Realistically once the profit has reached a set level we would withdraw a set amount and go out and enjoy our hard earned winnings. Let’s stick to the start bank of £4000. But every time the bank reaches £6000 we will withdraw £2000. That way our stakes remain manageable AND we get to keep some of the profit. We are treating it like a business. Let’s look at the Level Stakes and Percentage Staking Plan again but once we reach our £6000 target we withdraw £2000. In TSM the setting we need to use is Profit Taking under Application Settings. Level Stakes Revisited with Profit Taking Turned On – Exactly the same settings as before but this time every time the Cumulative Total reaches £6000 we withdraw £2000. The Cumulative Total is showing £4646. This is AFTER several £2000 withdrawals. To see the actual profit we need to view the Analysis Screen in TSM. The Cumulative Profit is £16,646. To calculate the number of withdrawals we simply add back our start bank of £4000 which gives us £20,646. We then subtract the CURRENT cumulative total of £4646. This gives us £16,000. We then divide £16,000 by our withdrawal amounts of £2000. That gives us the number 8. We made 8 withdrawals. We have spent £16,000 on holidays and other expenses. Percentage Staking Plan Revisited with Profit Taking Turned On – Exactly the same settings as before but again every time the Cumulative Total reaches £6000 we withdraw £2000. Note – Ratchet mode is turned OFF. Stakes can increase and decrease depending on whether the cumulative total increases or decreases. The Cumulative Total is showing £4564. This is AFTER several £2000 withdrawals. To see the actual profit we need to view the Analysis Screen in TSM. The Cumulative Profit is £16,564. To calculate the number of withdrawals we simply add back our start bank of £4000 which gives us £20,564. We then subtract the CURRENT cumulative total of £4564. This gives us £16,000. We then divide £16,000 by our withdrawal amounts of £2000. That gives us the number 8. We made 8 withdrawals. We have spent £16,000 on holidays and other expenses. Percentage Staking Plan (Ratchet Mode) - Revisited with Profit Taking Turned On – Exactly the same settings as before but again every time the Cumulative Total reaches £6000 we withdraw £2000. Note – Ratchet mode is turned ON. Stakes can only increase. They will never decrease. The Cumulative Total is showing £4269. This is AFTER several £2000 withdrawals. To see the actual profit we need to view the Analysis Screen in TSM. The Cumulative Profit is £24,269. To calculate the number of withdrawals we simply add back our start bank of £4000 which gives us £28,269. We then subtract the CURRENT cumulative total of £4269. This gives us £24,000. We then divide £24,000 by our withdrawal amounts of £2000. That gives us the number 12. We made 12 withdrawals. We have spent £24,000 on holidays and other expenses.

Bankruptcy Risk

Bankruptcy– It is time to start looking at the risk of Bankruptcy for each of our staking plans. What do we mean by bankruptcy? Put simply this is when you run out of money. Your entire betting bank has been used up. The test we use in TSM is the Monte Carlo Test. We shuffle the actual bet data and check for bankruptcy, cumulative profit and Return on Investment. A Monte Carlo simulation involves repeating this process thousands of times. First we will run the Monte Carlo Test for Level Stakes and the Percentage Staking Plan. I will firstly run it with Profit Taking Turned off. I will then run it a second time with Profit Taking Turned On. For level stakes clearly the profit will always be the same. It doesn’t matter if the sequence of our bets change in Level Stakes. But what the test will indicate is if the size of the starting bank is big enough to cushion our losing runs. Each time I run the Monte Carlo Test I use 5,000 simulations. You can see in the screenshot above that at Level stakes that on 7 occasions of the 5,000 simulations we would have been bankrupt. That’s a 0.14% chance of bankruptcy. I would be happy to accept that risk. For the Percentage Staking Plan we did not become bankrupt on any of the 5,000 simulations. You would expect this as the stake is a percentage of the cumulative total. Even if the cumulative total was reduced to £40 we would still have a stake of £2. The stakes will just get smaller and smaller rather than cause as bankruptcy. When Ratchet Mode is enabled in the Percentage Staking Plan - 251 of the 5,000 simulations would have made you bankrupt. For me 5.02% is too high a risk. For you that may be acceptable. Now we run the same test with Profit Taking Turned On. Bear in mind our banks will now be reduced back to the starting bank every so often. We are reducing our cushion periodically to withdraw our profits. The bankruptcy test is essentially - Is the next stake/liability larger than my current betting bank? Any withdrawals are considered spent and are not included in this test. For level stakes you can see that the chance of bankruptcy has increased to 1.78%. If you wanted to you could eliminate that by increasing your target threshold. Instead of £6000 you could target £8000 before withdrawing £2000. That would completely eliminate the risk of bankruptcy. The Percentage Staking with Ratchet Mode turned OFF – As expected we did not become bankrupt on any of the 5000 simulations. For the Percentage Staking Plan with Ratchet Mode ON (Never decrease the stakes) the chance of bankruptcy has increased to 19.12%. That rules that one out then.

Recovery Based Staking Plans

What about other staking plans? For example what about a recovery staking plan? By the term Recovery Staking Plan I mean increase stakes following a loser. Two recovery staking plans that have worked well on previous datasets I have looked at are the Retirement Staking Plan and Bookies Staking Plan. Descriptions can be found http://www.thestakingmachine.com/retirement.php and http://www.thestakingmachine.com/bookiesbank.php Let’s assume the following settings for each staking plan and look at the results. Profit Taking is turned ON at a target of £6000 whereby once reached £2000 is withdrawn. Retirement Staking Plan with Profit Taking Turned On. The settings used in TSM are - The Cumulative Total is showing £5222. This is AFTER several £2000 withdrawals. To see the actual profit we need to view the Analysis Screen in TSM. The Cumulative Profit is £27,222. To calculate the number of withdrawals we simply add back our start bank of £4000 which gives us £31,222. We then subtract the CURRENT cumulative total of £5222. This gives us £26,000. We then divide £26,000 by our withdrawal amounts of £2000. That gives us the number 13. We made 13 withdrawals. We have spent £26,000 on holidays and other expenses. At first glance this looks very impressive. However the important thing here is the largest single stake of £500.31 and the Bankrupt Ticked checkbox. Would you be comfortable staking £500.31? Bookies Bank Staking Plan with Profit Taking Turned On – The Settings used in TSM are -

The Cumulative Total is showing £5760. This is AFTER several £2000 withdrawals. To see the actual profit we need to view the Analysis Screen in TSM. The Cumulative Profit is £19,760. To calculate the number of withdrawals we simply add back our start bank of £4000 which gives us £23,760. We then subtract the CURRENT cumulative total of £5760. This gives us £18,000. We then divide £18,000 by our withdrawal amounts of £2000. That gives us the number 9. We made 9 withdrawals. We have spent £18,000 on holidays and other expenses. The largest stake was £383.92 and the Staking Plan did not go bankrupt on this occasion. There is also one more option in the Bookies Bank Staking Plan and that is to increase/decrease the stakes relative to the bank. This will increase our profits if the cumulative total increases. In this scenario I’m going to use this option. The settings in TSM would look like this – The Cumulative Total is showing £4723. This is AFTER several £2000 withdrawals. To see the actual profit we need to view the Analysis Screen in TSM. The Cumulative Profit is £24,723. To calculate the number of withdrawals we simply add back our start bank of £4000 which gives us £28,723. We then subtract the CURRENT cumulative total of £4723. This gives us £24,000. We then divide £24,000 by our withdrawal amounts of £2000. That gives us the number 12. We made 12 withdrawals. We have spent £24,000 on holidays and other expenses. The issue here is that although we have increased the profit over the default Bookies Bank Staking Plan we have also become bankrupt. Note the Bankrupt checkbox is ticked. The Monte Carlo Test for the Retirement Staking Plan and the Bookies Bank Staking Plan is shown below - You can see that the Retirement Staking Plan using those settings would make you bankrupt nearly 50% of the time. The normal Bookies Staking Plan would make you bankrupt 15% of the time. When you linked the stakes to the Cumulative total the chance of bankruptcy increases to 30%. Is that an acceptable level of risk for you? The Bookies Staking Plan may be good if we increased the ratio between the start stake and start bank. At the moment we are using 2x E.L.S. What happens when we increase the ratio to 5x E.L.S? In our scenario 5x E.L.S. = 50. Let us keep the £4000 start bank.

£4000/ 50 = £80.

Let’s see what happens now. We will keep Profit taking Turned ON. We will link the stakes to the cumulative total. We can also use the same settings for Level Stakes so that a comparison can be made. The Cumulative Total is showing £4802. This is AFTER several £2000 withdrawals. To see the actual profit we need to view the Analysis Screen in TSM. The Cumulative Profit is £8802. To calculate the number of withdrawals we simply add back our start bank of £4000 which gives us £12,802. We then subtract the CURRENT cumulative total of £4802. This gives us £8,000. We then divide £8,000 by our withdrawal amounts of £2000. That gives us the number 4. We made 4 withdrawals. We have spent £8,000 on holidays and other expenses. The largest stake was £131.16 and we did not become bankrupt. Let’s check the Monte Carlo Test. You can see that we have eliminated the chance of bankruptcy for level stakes and we have reduced the chance of bankruptcy to 0.02% for Bookies Bank Staking Plan. It is clear that Bookies Bank Staking Plan will increase profits over time compared to Level Stakes. It is also safe to use as long as the start stake to start bank ratio is large enough. Personally I see the Bookies Bank staking plan as useful for someone joining the Pro Backer Team but who might not have a £4000 start bank to hand. For instance even if you have a £1000 start bank you can still make good profits. If the aim is get the betting bank up to £4000 you will do so quicker using the Bookies Bank Staking Plan. Let’s look at this scenario. Divide £1000 by 50. This gives you a starting stake of £20. You can see below the result of starting off with £20 and a £1000 bank. In just over 250 bets you will have increased your Cumulative Profit to £4756.

Conclusion

There are many other staking plans in TSM that I have not looked at. Feel free to look at them yourselves. If you have made it this far in the article you can see that you can easily spend hours analysing one set of data. Your end result will always be subjective. What risk is acceptable to one person is not acceptable to another person. It is just a case of finding what is acceptable to you. Hopefully this article will give you an idea of the many options of staking plans. For Pro Backer I understand that you are recommended to stake 5% of a £4000 start bank. I see no reason to change this. If you start using a recovery staking plan the stakes will quickly increase to an unmanageable level. Can you even place £500 bets at bookmakers? Not for long if you keep winning! For a newcomer who is perhaps not willing to put £4000 of their own money in - I see no reason why you can’t start with a lower betting bank and be a little bit more aggressive. An option open to you would be the Bookies Bank Staking Plan which looking at the evidence provides a good chance of increasing your profits over level stakes whilst having a minimal chance of bankruptcy. If you are interested in doing your own research all of the above analysis was completed using the Desktop Version of The Staking Machine – TSM. This currently retails at £39.99. http://www.thestakingmachine.com There is also now a Web App for TSM called the TSMapp. This has ALL the features of the Desktop TSM apart from the Monte Carlo Test and Automated Betting. More details can be found here http://www.thestakingmachine.com/TSMapp-Home.php  

0 Comments
Sep 3, 2013 By csoftware

Windows Desktop TSM Version 6.0

Evaluation version of TSM is restricted to 10 bets at any one time. No time restrictions in place. 

Web Based Version - TSMapp 6.0

Login as Demo User. Restriction of 10 bets at any one time.