The first question that needs to be answered: “How do I deal with losing runs?”
Unfortunately, losing runs are absolutely part of the this game. A lot of my early permanent losses were from getting caught in, what I call, ‘the tipster loop’.
I haven’t fully explored the concept of bank sizes, but, go with me on this.
We have a £1000 to spend, we separate that into £10 points and call this a 100 point bank. Each bet we place is ‘one point (£10)’ and we find a tipster (of whom we have not prior researched because we’re silly’ and we join him.
Upon joining him, over the course of 2 weeks, we go 30 points down (£300) and now only have a £700 bank. We’re unhappy with this, because, who likes losing money? So we jump off the tipster and find another one, who, upon us joining him, has the worst losing run he’s ever had (of another 40 points £400)
So we walk away and give in, stating that money cannot be made from gambling and this is all shit.
What you didn’t realise though, is the very next day after leaving tipster A, he hits a large trixie and recoups all of his previous losses and then some; going on to have the biggest losing run that he has ever had.
I will explore the above concept in more detail, in another post. I just wanted to highlight a pretty vicious circle that I have gotten myself stuck in, numerous times.
So… back to the main post. How do we deal with losses?
It’s not an easy task, at all. Your main priority is to remember that every bit of money you have ‘set aside’ for the tipster, you should be willing to lose. This means that you do not jump in with a bank you’re only ‘50% willing’ to lose, because at that point, you will fall afoul of what I’ve mentioned above.
Secondly: Understand variance. Find it, hug it, make love to it. Variance is the spade to your heart, the queen to your king. YOU. WILL. LOSE. MONEY. this is an unfortunate fact. At some points, you’ll drop 40% of your bank and each further loss will feel like it’s a knife sticking in your soul, taunting you, bringing pain (and lets not kid ourselves, it is painful) – understanding the concept of EV will help lessen the affect of this (The law of big numbers).
Thirdly: If the tipster has an edge (although I will create a more in-depth explanation at a later date) they will inevitably recover their losses. This is where it takes that iron resolve we talked about.
A fellow investment bettor I know ‘Chris’, perfectly illustrates both of these concepts perfectly in a graph he linked to me – encompassing a 3 month period following a lay service.
You can see the wild swings of variance in play, but his trend for profit is consistently upwards. Including (absolutely perfectly illustrated ‘tipsters loop’ which could have occurred at the very start had he not had the resolve to see through what, in reality, would have made most people leave the service
(That one picture highlights and explains the entire premise of this post and I will certainly be exploring it in lots more depth in future)
Most of these concepts we’ll explore more in-depth over the coming months. I have some excellent resources to post links to and some
- Graph Chart: Chris Lewis