Want to learn to bet? Betting 101 is the place to start. Understanding Variance will help you think clearly about the great game.

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Index: Profitable Betting 101

The Tough Punter

It’s a term you might read or hear as you start to take more of an interest in punting.

Like a boxer, a tough punter is one who can take a long series of hits without being knocked out of the game.

For punters, those hits come in the form of losing bets.

It doesn’t matter who you are, how good a punter you are or how long you’ve been at it… all punters have losing streaks. All of them. It’s simply a mathematical reality.

And on the flipside, all punters have winning streaks.

But neither a winning streak or a losing streak needs to be indicative of your success over the long term.

In punting, these streaks are generally referred to as ‘variance’.

Variance

Variance exists because in a series of unrelated events – such as horse races, games of footy, or whatever else you’re betting on – the results don’t come in predictable order. Mathematically, they don’t need to.

Let’s look at horse racing. A strike rate of 35% – provided you’re betting to value – is extremely healthy in racing and more than enough to strong profit of you’re betting at the right prices.

It basically means that for every 100 races, you’re getting a win in 35 of them and losing 65 of them. But how do those results come, mathematically? There’s a myriad of ways.

Here’s an example of 35 wins and 65 losses in a nice, neat distribution:

W – L – L – W – L – L – W – L – L – L – W – L – L – W – L – L – W – L – L – L – W – L – L – W – L – L – W – L – L – L – W – L – L – W – L – L – W – L – L – L – W – W – L – W – L – L – W – L – L – L – W – L – L – W – L – L – W – L – L – L – W – L – L – W – L – L – W – L – L – L – W – L – L – W – L – L – W – W – L – L – W – L – W – W – L – L – W – L – L – W – W – L – L – W – L – L – W – L – L – W

That’d be nice. The wins come very regularly, there’s no long losing streaks, and the bank would build nicely.  But in a series of unrelated events, it’s not realistic.

The exact same strike rate is achieved with a series of results like this:

W – W – W – W – W – W – W – W – W – W – W – W – W – W – W – W – W – W – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – L – W – W – W – W – W – W – W – W – W – W – W – W – W – W – W – W – W

There’s a losing run of 65 races there. That’s exceedingly rare, of course, but mathematically possible while still delivering the same overall result. A betting service that delivered a losing streak of 65 losses would probably have mug punters jumping off. But overall, there’s no difference to the previous series over just 100 bets.

We’ve used simple extremes here by way of illustration, but it gives you an idea of how variance can work. Winning and losing streaks come in all shapes and sizes.

The key is to stake correctly, and use a proper bankroll: that allows you to stay in the game during inevitable losing periods, and take full advantage of inevitable winning periods.

Some of the most underrated factors in successful punting are staking and managing the bankroll.

Plenty of less experienced punters assume that it’s all about finding winners. We busted that myth when we explored the concept of value.

But as we’ve shown, all punters can go through losing streaks, just like they go through winning streaks. It’s inevitable.

Firstly, you need to be able to deal with these losing streaks emotionally.

If you’re the sort of person who’s going to lose their nerve and stop a proven formula after a few losses, then you’re not going to get very far. You need to be able to stick with it.

Serious punting is not for the fickle!

Secondly, you need a bankroll that keeps you going through the losing streaks, so you don’t run out of bullets and have to stop betting… before a winning streak comes along to put things right. It’s all variance!

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Index: Profitable Betting 101