Stake Ratchet & Stop-loss Mechanisms

For the sake of providing a like-for-like comparison with the Summer League Campaign, we decided to incorporate the promised winter league ratchet and stop-loss mechanisms separately. (See Chrono tab).

Due to time and Excel limitations we can only show you this simulation based on an initial starting stake of 100 units. It should therefore be easy for you to extrapolate results for any other stake size you wish to analyse.

As you can see, the starting bank of the portfolio was just £2,000 and, as previously mentioned, £100 flat stakes were used.

This is just one example of a progressive staking plan; this one is perhaps a medium-aggressive approach. But feel free to use your own ideas.

Ratchet Rules

Here, the ratchet increments are +5% chunks of the initial starting stake (£100 in this case) for every whole £1,000 profit above zero.

The ratchet is triggered when profits reach at least £1,000 above the previous ratchet trigger point.

Therefore, the first trigger point is £1,000 above the starting figure of zero (i.e. anywhere in the range from £1,000 to £1,999.99).

Whatever the profit value is at the first trigger point, say £1,500, the second trigger point activates when the portfolio next reaches the end of a round (week) showing at least £2,500 profit (i.e. at least £1,000 above the previous trigger point).

If the second trigger is activated at, say £2,650, the third will trigger when profits next reach the end of a week at least £3,650 ahead, and so on.

At the £3,650 trigger point, the stakes will be 115% of their initial level. Thus, £115. (£3,650 contains three whole thousands @ +5% increment per mille = 15% increase).

If profits were £9,650 at the end of a week, the new week would begin with stakes set at 145% of the initial level (i.e. £145).

If there is a significant jump from one week to the next, the new stakes will always be calculated on the new profit figure regardless. If at the end of one week profits are £6,000 (stake at 130%), and by the end of the next they are £10,000, then the stake will increase from 130% to 150% in the following week.

Stop-loss Rules

The stop-loss is almost the same concept as the ratchet but in reverse.

Again, when checking the last complete week’s performance, the trigger will activate whenever the bank suffers a loss of £500 or above.

For each whole 500 unit loss, we step back the current stake level in -5% chunks.

For example, if the current stake is 125%, and the week just finished shows a £3,250 loss, then the stake is stepped back by -30% to 95%. (£3,250 contains six whole £500’s: Six -5% chunks are -30%).

The portfolio start day was a Friday, and weeks were therefore defined as Friday-Thursday. Results at the end of each Thursday were reviewed to see if a ratchet or stop-loss adjustment to the following day’s stakes was needed.

As you can see from the simulation, the progressive staking plan made a huge difference to profits. Despite a run of heavier losses towards the end of the campaign, the medium-aggressive approach produced a total profit figure of £27,787.60, more than £8,000 above the original £19,603.00.

In percentage terms, this is an increase of 41.75%. This is a massive amount and you should understand that it is generated purely by working the money already in the bank harder, thus increasing turnover.

The analysis showed that profits were likely to be somewhere between 0.74% and 21.37% (Summary tab cells L36 and M36).

If a portfolio is set-up in a well-balanced manner, and shows a likelihood for profits, then the more money thrown at the situation, the better. The ratchet and stop-loss mechanisms provide a professional and controlled approach to doing just that.

Increase the ratchet percentages for a more adventurous approach (higher risk strategy), or increase the stop-loss negative percentages for a more conservative approach (lower risk strategy).

Please note that this example of a progressive staking plan is tailored to this particular portfolio and is a simulation only.

For more detailed information regarding the relationship between winning and losing streaks and optimum size of starting banks in general, see our article The Science of Calculating Winning and Losing Streaks.

Summary

Looks good so far, doesn’t it?

But now it’s time for a stern reality check.

Looking objectively at the results it is clear to see the extent to which the portfolio underperformed:

• • Hit Rate

    At face value, the actual hit rate of 37.31% does not seem far adrift of the average hit rate mooted for the portfolio, which was 38.87%. However, the reality of this small difference is 28.5 fewer winning bets: 1,828 bets @ 38.87% hit rate = 710.5 winners versus the actual number of 682 winning bets.

    The financial effects can be fairly estimated using a control, the most appropriate of which, is the harmonic mean odds. These were recorded at 2.98. (See Chrono tab, cell L1838).

    28.5 winning bets all at odds of 2.98 would have equated to an additional profit of £5,643 (28.5 x 198), which in turn would have pushed the total profit for the portfolio to a figure of £25,246.

    So, due to just a small hit rate deviation (1.56%), the actual profit figure of £19,603 was only 77.6% of the notional £25,246.

    The small difference is therefore not so small at all: it ameliorated the bottom line by more than a fifth (22.4%) of what should have been won.

  • Accumulative Ratios: Winning & Losing Streaks

    In the Summary tab, you will find the benchmark for the winning and losing streaks in columns P and Q, whilst the results are in Y and Z. The accumulative highs recorded for 2011-16 were 134 for the winning streaks and 260 for the losing streaks. These figures represent the sum of the highest values experienced in each system over five full seasons.

    Albeit not scientific, this does allow us to produce a ratio, which we have called the win-to-lose ratio.

    The win-to-lose ratio provides us with a notional measure only of the power and accumulative effects of the losing streaks over the winning streaks.

    Although in 2016-17, the damage caused by the losing streaks was less than the worst case scenario (215 vs. 260 = 82.69%), the power of the winning streaks to counter was also reduced (85 vs. 134 = 63.43%).

    The maximum losing streaks were therefore less than 18% away from being at their predicted worst, whilst the winning streaks were over 36% away from being at their best.

    The net effect was that the balance tipped further towards the losing streaks as they increased their ‘detrimental effect’ from 65.99% in the cold analysis (Summary tab cell Q40) to 71.67% in the field (cell Z40).

    Although the numbers arguably mean nothing, they do allow us to feel how the portfolio was under more stress than had been expected. The maximum winning streaks were down further than the maximum losing streaks, and therefore the overall balance of power held by the losing streaks increased and caused more damage than anticipated.

  • Reduced Yield

    The combination of the two factors above had a detrimental effect on yield, which at 10.72%, was less than the 12.17% profited by the smaller 2016 Summer League programme (only 825 bets = 45% of the size of the Winter League Campaign).

  • Zero Odds Increase

    In the Summary tab, cells L1839-40 show that the break-even odds for the portfolio increased from 2.57 expected, to 2.68 actual, another sign that the portfolio performed worse than anticipated.

• Despite all of these failings, the bottom line was that this portfolio still made almost £20,000
• Add the concurrent Summer League Campaign results, and the total is just shy of £30,000
• Factor in a similar increase suggested by our ratchet and stop-loss staking plan, and the total becomes a few pounds over £42,000
• And all with relatively small stakes…

Final Words

This campaign has proved that profit size is directly influenced by both portfolio size and staking plan.

In simple terms, the larger the number of targeted value bets, the bigger the profits.

Even at a relatively modest yield of 10.72%, the higher number of bets (turnover) created almost double the profits of the 2016 Summer League Campaign, which finished with a higher yield of 12.17%.

The Summer League Campaign was therefore more efficient in converting turnover to profits, whilst the Winter League Campaign was more of a brute-force success, relying on the sheer numbers of bets.

Portfolio size is therefore a huge part of successful betting: the bookmaker business model is based around this very fact.

The 2016-17 analysis suggested a final profit figure of anywhere between £1,361 and £39,280. (Summary tab cells L35 & M35). At £19,603, it finished not far away from the equidistant point of £20,320.

The 2016 Summer League analysis suggested a profit of somewhere between £1,338 and £20,257. At £10,038, it was again not far from the equidistant point of £10,797.

If you are new to staking plans, hopefully the stake ratchet and stop-loss simulation will introduce new ways of tactical thinking and effective money management in a betting arena.

Money begets money, and it is a no-brainer to raise the ante with incremental ratchets in order to increase turnover. In any line of business, larger turnover means larger profits. The ratchet focuses on working the profits already banked in order to inflate the bottom line.

By contrast, the stop-loss mechanism is a ratchet in reverse, and acts like a tourniquet to stem a tide of losses. It prevents your bank (and your confidence) from being pummelled by the full effects of any bad run of results you may encounter.

Use a ratchet mechanism for adventure, and a stop-loss provision for insurance. Hoist up the stakes when all is fair and good, and don’t be afraid to haul them back in again during a storm.

Plan out the whole campaign, stay in control of it, and don’t waiver from the plan unless you’ve won more than is satisfactory…

…There is never any shame in quitting whilst ahead.

And talking of quitting, this will perhaps be the last review of a portfolio campaign we do for a while.

We are so sorry, but they are just so time-consuming to prepare and publish. And besides, we think we have already done enough to explain how to compile a portfolio and how to run one.

We have now written one review of a Summer League Campaign, and this one for a Winter League Campaign. Together, both reports should provide you with the tools to go off and do this for yourself. And besides, we feel that any future reviews would end up repeating a lot of what we have already reported. Just think of it as the law of diminishing returns in action…

Oh, and one last thing of great importance. Please do not use old analyses like this one, or out of date HDAFU tables to strike bets in a future season. Everything has to be re-calibrated at the end of a season, and things definitely do change according to the revised pool of historical statistics. Either the inflection points of a bet type will radically alter, or the bet type itself will become redundant to a better alternative. You may even see a change in the odds setting for a particular bet type in a league performed wholesale by the bookmakers to counter a strong trend of results.

And here’s another opportunity to obtain the 2016-17 Campaign Excel workbook for just £1.99 GBP:

>>> 2016-17 winter league campaign <<<

Remember, when buying this spreadsheet you will also receive a coupon code offering a discount of £7.00 GBP, redeemable against the purchase of any individual HDAFU Table. This allows you the opportunity to experiment and explore your first HDAFU Table without paying the full price for it and before you commit to buying more. Again, formulate strategies for any current season ‘on the cheap’!

About the Author

The Holding Midfielder

Administrator

Not here for flashy wins. Here to read the game. I help bettors see the patterns, protect their bankroll, and play the long game—just like any good holding midfielder.!

View All Posts