Multiple Banks Are Costing You Profit

High Low analyst Rod talks betting banks and how to maximise your returns

betting bank

With the volume of racing and sports action available these days, it’s not surprising that Champion Bets has a stable of pros taking advantage in several sports and racing states, nor that most members subscribe to multiple memberships.

The bank management approach recommended to members when they sign up to a package is to create a 100-unit bank and bet however many units the pro recommends. It’s a top approach for several reasons (explained here).

That’s the approach when you follow one set of tips. But what about when you follow multiple sets?

Read on to find out…

Multiple Banks

The general consensus with bank management when you follow multiple sets of tips is to split your bank into multiple banks. That is, if you have a $10,000 bank at your disposal, and you follow four sets of tips for example, then you should split your bank into quarters, use $2,500 for each package and create a 100-unit bank for each package.

The idea is that you’re essentially safe guarding against a rainy day, in case all your tips have a bad run at once. This process essentially creates a 400-unit bank out of your $10,000.

It’s a key component of successful bank management to allow for bad runs, which are inevitable at some point, but is splitting your bank the best approach, or is it too conservative?

As the title of the article implies, the answer is the latter, and I’ll explain why.

Problem With Multiple Banks

Bank management is about maximising the funds at your disposal to make as much profit as you can, whilst protecting your bank at the same time. Splitting your bank into multiple banks protects your bank well by betting increasingly smaller amounts as the number of packages you follow increases. However, this approach also significantly reduces your outlay and therefore limits the raw dollar profit you can make (which is what betting is really about).

The fundamental problem behind the theory of splitting the bank is that the bets don’t know they belong to different packages. As far as your funds are concerned, every bet you place belongs to one series of bets – your series of bets. I’ve explained this concept in a reply to a member previously but I wanted to expand on the idea and show why splitting the bank is unnecessarily conservative.

Undoubtedly, the major concern for members with multiple packages is multiple bad runs at once. And that’s fair enough. If you followed four packages, the concern would be that all four packages run bad at once, and you lose 4 times the bank you should. That’s why the consensus is to split the bank.

But that’s where the misunderstanding lies. Four times as many bets does not mean your bad runs will be four times worse. I’ll use an example and simulation to show why.

Simulation

Let’s say you follow 4 tips packages on the AFL, NRL, NBA and NHL, where each pro just bets on line bets (50/50 bets). All these sports are played at the same time of the year (for part of their seasons), so let’s say in that period, you have 100 bets on each package.

Let’s also say each pro is a 10% P.O.T. punter, every bet is at a price of $1.90, we bet 2.5 units on every bet (that makes the first bet $250 with a $10,000 starting bank) and we adjust the unit size based on the new bank after each bet.

First, we’ll look at one package. Using a simulator that places 100 bets under the above conditions, and repeats that 100,000 times, the simulations can be summarised with the following results:

Starting Bank: $10,000
Number of Bets in Series: 100
Simulations: 100,000
Final Bank (Average): $13,333.46
Final Bank (Median): $12,942.96
Final Bank (95% Confidence): >$8,329.54
Final Bank (99% Confidence): >$6,682.17
Maximum Drawdown (Average): 20.4%
Maximum Drawdown (Median): 19.2%
Maximum Drawdown (95% Confidence): <34.9%
Maximum Drawdown (99% Confidence): <42.9%

Now we’ll look at four packages at once. The only difference (in our example) with four sets of tips compared to one is that you’ll have 4 times as many bets in the same time period. This reflects the basic scenario when you follow multiple packages. So let’s repeat the simulations, except this time we’ll place 400 bets instead of 100 bets. The results are:

Starting Bank: $10,000
Number of Bets in Series: 400
Simulations: 100,000
Final Bank (Average): $31,829.82
Final Bank (Median): $28,062.99
Final Bank (95% Confidence): >$10,999.85
Final Bank (99% Confidence): >$7,480.05
Maximum Drawdown (Average): 29.1%
Maximum Drawdown (Median): 28.1%
Maximum Drawdown (95% Confidence): <48.5%
Maximum Drawdown (99% Confidence): <57.9%

What Do The Results Mean?

The simulations produce many expected, and perhaps some unexpected, results.

As expected with four times as many profitable bets, the final bank has improved. We can also see that the Maximum Drawdown (i.e. the worse run you can expect) has increased. Again, we’d expect that because a larger sample will have a bigger downswing at some point than a smaller sample.

However, the key result here is that while the Maximum Drawdown has increased, the four-fold increase in the number of bets (i.e. 4 packages vs 1 package) did not result in a 400% increase in the Maximum Drawdown.

The Maximum Drawdown increased by approximately 150%, which is well below the 400% increase (i.e. all packages running bad at once) that underpins the theory behind splitting the bank with multiple packages.

So What Should You Do?

Hopefully my simulation has convinced you that splitting the bank is too conservative.

So the next question is, what should you do about it? Assuming that you’re splitting your bank at the moment (which equates to a 400-unit bank in the example), you should reduce the total number of units in your bank.

The simulation would suggest a 150-unit bank for the four packages, but that would be too aggressive.

While the simulator performs its task well, it’s a relatively simple example and the real-world betting scenario will have added variation that produces slightly different results. In that respect, the simulator results should be treated as a proof-of-concept, rather than hard numbers to use as the basis for your personal approach.

With that said, a 300-unit bank would be perfectly fine. That small unit bank reduction (400 to 300 units) would protect your bank well, but importantly increase your bet size (and therefore your raw dollar profit) by 33%, which is a significant increase.

Everyone’s scenario is slightly different but as a general rule, a three-quarter reduction in the total number of units in your bank would be a perfectly acceptable and conservative approach.

Conclusion

With bets available on several sports and racing states, most Champion Bets members take advantage and follow multiple packages, where the default approach to bank management is splitting your bank. Whilst that approach provides a fortress-like barrier to protecting your bank, the message is clear: multiple banks are costing you profit.

Rod is the analyst behind the hugely profitable High Low membership.

Over $86,000 profit since launch, including 34 winning months from 36 since launch.

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