TSM meets the Pro Backer written by Dave Morris (August 2013) As the founder and owner of The Staking Machine (TSM), I m often approached by tipsters asking me to look at their historical results, and then suggest the best staking plan(s) to use. Too often I get the data through, and within seconds of running it through TSM, I can see straight away there is no edge. Or if there is an edge - it is too small. So when I had an email from Matthew Walton regarding the Pro Backer advisory service he runs, it was a nice surprise to see a set of results with an edge of over 30%. The data I received comprised of every bet advised since the service launched. 257 bets dated from 30/04/2011 up until 01/08/2013. The first thing I noticed is that within the 257 bets there were 12 Each Way bets. TSM is currently unable to mix Win Bets with EW bets. Now I could have simply edited the odds to make them all win bets. Instead, I opted to remove them. To 1 stakes the 12 bets made 2.30 profit. So I wasn t too worried about missing them out. Therefore I ended up with a dataset of 245 bets spread over more than 2 years. Before I ever start looking at staking plans, I always look at level stakes. Any selection system that is not making a profit at level stakes should be binned. If there is no edge you will always lose money in the end. You can see from the Quick Stats screenshot in TSM above, there are 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 ELS (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 looking at Level Stakes, the Edge is the same as your Return on Investment (ROI). Expected Losing Sequence - ELS Currently the ELS is just over 10 bets (10.6), which makes sense as the actual longest losing sequence for the Pro Backer bets is 10.
The maths behind the formula to calculate ELS is beyond the scope of this article. However, there is an ELS calculator available to use in TSM. There is also a free to use online version of the ELS Calculator and the formula used is also detailed on that page. The link to the online calculator is http://www.thestakingmachine.com/els.php. Starting Stake and Starting Bank Money Management/Staking Plans whatever you want to call them, are 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 this means treating betting as a business and in most lines of 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 note of the Expected Losing Sequence. Any staking plan you use must be able to withstand the ELS and some more. In TSM there is a graph for sequences that you can create. See below. You can see there were 3 occasions where there was a losing sequence of 8 bets. There was 1 occasion where the losing run was 9... and there was 1 occasion where there were 10 losers in a row (this was between bets 50-59, which were advised back in November/December 2011). So what is stopping these losing runs happening straight after each other? And is it expected to happen? The chances are very small but it could happen.
So you need to be prepared for that eventuality. Any staking plan you use for the Pro Backer must allow for 10 losing bets in a row, and then I d recommend at least another 10 losing bets in a row. This would mean a stake ratio of 2 x ELS (i.e. 2 x 10 = 20). If your start bank was 4,000 that would be 4,000/20 = 200. So you would start with a 200 stake. In real terms, the stake is 5% of the total bank. After doing some further analysis you can always adjust this ratio up or down later. Staking Plans In my study of the Pro Backer results, I have looked at a number of different staking plans (9 in total). I am going to begin by using a fixed 5% of the total bank. The starting bank is 4,000 so each initial stake is fixed at 200. 1. Level Stakes Results You already know the results have a good edge. But how much money would you have made at 200 level stakes? The Cumulative Total stood at 20,646. Take off your start bank of 4,000. This leaves a healthy profit of 16,646. 2. Percentage Staking Plan Results The most common alternative to level stakes is percentage stakes. With percentage staking you would bet at 5% of the total bank. So your initial stake would start off at 200 but it would increase/decrease relative to the cumulative total. If the total bank figure goes up you ll stake more money. If it goes down, you ll stake less. Here is the results table:
The Cumulative Total was 103,972. Take off your start bank of 4,000. This leaves an overall profit of 99,972. The only problem with this staking plan is the next stake is at 5,198. That level of staking is totally unrealistic for most punters so we will see what we can do about this later. 3. Percentage Staking Plan with Ratchet Mode turned on (never decrease stakes) This is a popular variation of the Percentage Staking Plan but the stake is never decreased. Let me explain the Ratchet Mode. Here your stake is re-calculated, at your chosen percentage (in this case 5%), whenever the bank total reaches a new all-time high. From this point onwards, your stake will never decrease in value (even if you have losers). And it will only increase again when a new profit high is achieved. Hence a slow, staggered increase of stakes over time. The Cumulative Total was 209,567. Take off your start bank of 4,000 and you have a profit of 205,567.
However, the next stake in this scenario is now at 11,206!! Again, totally unrealistic! Staking Plans and Profit Taking As I have already said, you should be treating your betting as a business. Realistically once your profit has reached a set level, you would withdraw a set amount and go out and enjoy your winnings. Let s look at the Level Stakes and Percentage Staking Plan again with start bank of 4,000. But now, every time your bank reaches 6,000 you withdraw 2,000. That way your stakes remain manageable and you get to keep some of the profit. You are treating it like a business. In TSM the setting you need to use is Profit Taking under Application Settings. 4. Level Stakes Revisited with Profit Taking Turned On You use exactly the same settings as before but this time every time the Cumulative Total reaches 6,000, you withdraw 2,000.
The Cumulative Total was 4,646. This is AFTER several 2,000 withdrawals. To see the actual profit you need to view the Analysis Screen in TSM. The Cumulative Profit was 16,646. To calculate the number of withdrawals, you simply add back your start bank of 4,000 giving you 20,646. You then subtract the CURRENT cumulative total of 4,646. This gives you 16,000. You then divide 16,000 by your withdrawal amounts of 2,000 meaning you would have made 8 withdrawals of 2,000 each. 5. Percentage Staking Plan Revisited with Profit Taking Turned On Every time the Cumulative Total reaches 6,000 you withdraw 2,000. But now the Ratchet Mode is turned off, so stakes can increase and decrease depending on whether the cumulative total increases or decreases. The Cumulative Total was 4,564. This is AFTER several 2,000 withdrawals so, just as before, to see the actual profit you need to view the Analysis Screen in TSM. The Cumulative Profit was 16,564. To calculate the number of withdrawals you simply add back your start bank of 4,000 which gives you 20,564. You then subtract the CURRENT cumulative total of 4,564. This gives you 16,000. You then divide 16,000 by your withdrawal amounts of 2,000 meaning you would have made 8 withdrawals of 2,000 each.
6. Percentage Staking Plan (Ratchet Mode) - Revisited with Profit Taking Turned On Again, every time the Cumulative Total reaches 6,000 you withdraw 2,000. Note the Ratchet Mode is now turned on, so your stakes will ONLY increase as new profit highs are reached, and they won t decrease if there are any losers. The Cumulative Total was 4,269. This is AFTER several 2,000 withdrawals. Once again to see the actual profit you need to view the Analysis Screen in TSM. The Cumulative Profit was 24,269. To calculate the number of withdrawals you simply add back your start bank of 4,000 which gives you 28,269. You then subtract the CURRENT cumulative total of 4,269. This gives you 24,000. You then divide 24,000 by your withdrawal amounts of 2,000 meaning you would have made 12 withdrawals of 2,000 each. Bankruptcy Risk It s time to start looking at the risk of bankruptcy for each staking plan. What do I mean by bankruptcy? Simply when you run out of money. Your entire betting bank disappears. The bankruptcy test used in TSM is called the Monte Carlo Test. Your actual bet data is shuffled to check for bankruptcy, cumulative profit and Return on Investment. A Monte Carlo simulation involves repeating this process thousands of times. I ran the Monte Carlo Test for Level Stakes and the Percentage Staking Plan, first of all with Profit Taking turned off, then with Profit Taking turned on.
For level stakes, the profit will always be the same. It doesn t matter if the sequence of our bets changes in Level Stakes. But what the test will indicate is if the size of the starting bank is big enough to cushion your 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 on 7 occasions of the 5,000 simulations, you 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 you would not have 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 you would still have a stake of 2. The stakes will just get smaller and smaller rather than cause bankruptcy. When Ratchet Mode is turned on 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. Next I ran the same test with Profit Taking turned on. Bear in mind your bank will now be reduced back to the starting bank every so often. You are reducing your cushion periodically to withdraw your profits. The bankruptcy test is essentially asking - 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 the chance of bankruptcy increased to 1.78%. If you wanted, you could eliminate that by increasing your target threshold. Instead of 6,000 you could target 8,000 before withdrawing 2,000. That would completely eliminate the risk of bankruptcy. The Percentage Staking with Ratchet Mode turned off - as expected you would not have become bankrupt on any of the 5,000 simulations. For the Percentage Staking Plan with Ratchet Mode on (i.e. never decrease the stakes) the chance of bankruptcy increased to 19.12%. That would rule 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 your 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 of how these plans work in practice can be found at 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. The Profit Taking option is turned on with a profit target of 6,000 and then 2,000 is withdrawn. 7. Retirement Staking Plan with Profit Taking turned on The settings used in TSM are: The Cumulative Total was 5,222. This is AFTER several 2,000 withdrawals, so to see the actual profit you would need to view the Analysis Screen in TSM.
The Cumulative Profit was 27,222. To calculate the number of withdrawals you simply add back your start bank of 4,000 which gives you 31,222. You then subtract the CURRENT cumulative total of 5,222. This gives you 26,000. You then divide 26,000 by your withdrawal amounts of 2,000 meaning you would have made 13 withdrawals of 2,000 each. 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. 8. Bookies Bank Staking Plan with Profit Taking turned on The Settings used in TSM are: The Cumulative Total was 5,760. This is AFTER several 2,000 withdrawals. To see the actual profit you need to view the Analysis Screen in TSM. The Cumulative Profit was 19,760. To calculate the number of withdrawals you simply add back your start bank of 4,000 which gives you 23,760. You then subtract the CURRENT cumulative total of 5,760. This gives you 18,000. You then divide 18,000 by your withdrawal amounts of 2,000 meaning you would have made 9 withdrawals of 2,000 each.
The largest stake was 383.92 and the staking plan didn t go bankrupt on this occasion. There is also one more option 9. Bookies Bank Staking Plan - with increase/decrease of stakes relative to the bank This will increase your profits if the cumulative total increases. The settings in TSM would look like this: The Cumulative Total was 4,723. This is AFTER several 2,000 withdrawals. To see the actual profit you need to view the Analysis Screen in TSM. The Cumulative Profit was 24,723. To calculate the number of withdrawals you simply add back your start bank of 4,000 which gives you 28,723. You then subtract the CURRENT cumulative total of 4,723. This gives you 24,000. You then divide 24,000 by your withdrawal amounts of 2,000 meaning you would have made 12 withdrawals of 2,000 each. The issue here is that although you have increased the profit over the default Bookies Bank Staking Plan, you have also become bankrupt. Note the Bankrupt Ticked checkbox.
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 have made you bankrupt nearly 50% of the time. The normal Bookies Staking Plan would have made you bankrupt 15% of the time. When you link the stakes to the cumulative total the chance of bankruptcy increases to 30%. This would be too high a level of risk for most punters. The Bookies Staking Plan may be good if the ratio between the start stake and start bank was increased. So far in this article I have used 2 x ELS but what happens if it s increased to 5 x ELS? 5 x ELS = 50. Keeping the 4,000 start bank means 4,000 / 50 = 80. Let s see what happens now. Profit Taking is turned on and the stakes to cumulative total is linked. The settings in TSM would look like this: You can also use the same settings for Level Stakes so that a comparison can be made.
The Cumulative Total was 4,802. This is AFTER several 2,000 withdrawals and therefore to see the actual profit you need to view the Analysis Screen in TSM. The Cumulative Profit was 8,802. To calculate the number of withdrawals you simply add back your start bank of 4,000 which gives you 12,802. You then subtract the CURRENT cumulative total of 4,802. This gives you 8,000. You then divide 8,000 by your withdrawal amounts of 2,000 meaning you would have made 12 withdrawals of 2,000 each. The largest stake was 131.16 and you did not become bankrupt. What about the Monte Carlo Test? You can see above that you have eliminated the chance of bankruptcy for level stakes and reduced the chance of bankruptcy to 0.02% for Bookies Bank Staking Plan. Based on the Pro Backer results so far, 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 but who might not have a 4,000 start bank to hand. For instance, even if you have a 1,000 start bank you can still make good profits. If the aim is get the betting bank up to 4,000 you will do so quicker using the Bookies Bank Staking Plan. Let s look at this scenario: Divide 1,000 by 50. This gives you a starting stake of 20. You can see below the result of starting off with 20 and a 1,000 bank.
In just over 250 bets you would have increased your Cumulative Profit to 4,756. Conclusion There are many other staking plans in TSM that I have not looked at. Feel free to look at them yourself. If you have made it this far in the article you can see that you can easily spend hours analysing a set of results like Matthew Walton presented me with for the Pro Backer. Your final assessment of the staking strategy you prefer to use will always be subjective. What risk is acceptable to one person is not acceptable to another. It is just a case of finding what suits you. Hopefully this article will give you an idea of the many different options with staking plans. For the Pro Backer, I understand Matthew advises new members to stake 5% of their start bank. I see no reason to change this. And based upon the staking plans illustrated in this article, here are the projected returns: No. Start Bank Initial % to Bet Start Stake Staking Plan Profit Taking Turned On Ratchet Mode Link Start Stake to Dynamic Bank Total Profit Bankrupcty Risk 1 4,000 5% 200 Level Stakes NO N/A N/A 16,646 0.14% 2 4,000 5% 200 Percentage NO NO N/A 99,972 0.00% 3 4,000 5% 200 Percentage NO YES N/A 205,567 5.02% 4 4,000 5% 200 Level Stakes YES N/A N/A 16,646 1.78% 5 4,000 5% 200 Percentage YES NO N/A 16,564 0.00% 6 4,000 5% 200 Percentage YES YES N/A 24,269 19.12% 7 4,000 5% 200 Retirement YES N/A N/A 27,222 49.28% 8 4,000 5% 200 Bookies Bank YES N/A NO 19,760 14.84% 9 4,000 5% 200 Bookies Bank YES N/A YES 24,723 30.08%
All show a high level of profit, some extremely high, dependent upon staking levels and risk-profile. 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 4,000 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 29.99. http://www.thestakingmachine.com/matthewwalton.php 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 at http://www.thestakingmachine.com/tsmapp- Home.php. TSMapp Special Offer to Pro Backer Members Subscription to the TSMapp is 10 for the first month and then 3 for each subsequent month. This works out at just under 12p a day. As a TSMapp subscriber you will: Always have access to the latest version of TSMapp. No additional software to install. Runs in your browser. Be able to access TSMapp from any computer in the world with internet access. This includes tablets and most smartphones. Be able to save your data in the TSM Cloud and access your TSM files from anywhere in the world. No need for memory sticks. Have access to personal email support. I endeavour to reply to all support requests within 24 hours. I have agreed with Matthew Walton that if you subscribe to the TSMapp within the next 2 weeks, and email me quoting Pro Backer, I will refund the first month s subscription. This effectively gives you 1 month s free trial. TSMapp - http://www.thestakingmachine.com/tsmapp-home.php.