Betting strategy

A betting strategy or betting system is a structured approach to gambling, with a predefined set of actions for bet sizing and timing. Betting strategies are typical in any activity in which money is risked but where the participant has little influence on events with their power limited to the sizing and timing their wagers, i.e. share trading, horse racing, sports picking, casino games, etc. Betting strategies are based on some logical argument, whether it be based on probability or illusionary patterns, but all are at some level convincing to the particular betting strategist that it will increase their chance of success.

There are two key categories in which betting strategies fall; progression betting systems and staking systems.

Progression Betting Systems

Progression betting systems involve when and how much to increase or decrease bet sizes after a loss, win or other event. Progression betting systems take either a negative or positive approach, where negative progression betting systems involve increasing bet sizes after a loss whereas positive progression systems will generally increase bet sizes after a win. Negative progression betting systems can be viewed as loss recovery systems, that generally can give the player a profit without having to win more than 50% of the time. [ [http://gamblershandbook.net/gamble/roulette/martingale.html Roulette Martingale System] ] Both negative and positive progression systems inherently increase a player's bankroll volatility and so should not be viewed as systems that will eliminate risk entirely over the long run.

The Martingale

The Martingale is the classic progression betting system. In its negative form, it involves doubling your bet size after a loss. This continues until you win. The doubling of bet sizing means that when you do win, the size of the winning bet is greater than the total of previous losses. For example, we can have three straight losses where we have a negative martingale betting string of $5, $10 and $20 for a total loss $35. If we win the fourth negative martingale bet of $40, then we have a net profit of $5. After a winning bet, you drop your bet size back to the initial bet.

The positive martingale involves doubling your bet size after a win, you continue doubling as long as you win until you reach the table limit. After a loss, you reduce your bet size to the initial bet.

The Labouchere

The Labouchere System is progression betting strategy like the Martingale but does not require the gambler to risk his stake as quickly with dramatic double ups. The Labouchere System involves using a series of numbers in a line to determine the bet size, following a win or a loss. Typically, the player adds the numbers at the front and end of the line to determine the size of the next bet. When he wins, he crosses out the outside numbers and continues working on the smaller line. If he loses, then he adds his previous bet to the end of the line and continues to work on the longer line. This is a much more flexible progression betting system and there is much room for the player to design his initial line to his own playing preference. [ [http://gamblershandbook.net/gamble/roulette/labouchere.html Labouchere Roulette Strategy ] ]

D'Alembert

The D'Alembert is a progression betting system that involves increasing bet sizes during a winning streak and decreasing bet sizes on a losing streak. In the classic D'Alembert system, after a win the player increases their next bet by one unit and after a loss they reduce their next bet size by 1 unit.

Bet Spreading in Blackjack

Bet spreading in blackjack is an interesting example of betting strategy based on estimating the true odds by card counting. In essence, when you estimate that the house edge is getting higher you lower your bet sizing and when you estimate the house edge is negative then your increase your bet sizing. In fact, when the house edge is very negative you should increase your spread bet to around 20 times your small bet [ [http://gamblershandbook.net/gamble/blackjack/bet_spread.html Blackjack Bet Spreading] ] . The argument for bet spreading is that you can counter the fact that you are playing most of the time with a negative expected value by increasing the amount wagered when you have positive expected value to cover the time you are spending with the worst of it. The method of estimating the house edge is typically done via a card counting system.

taking Systems

Staking systems are about where or when to place a bet, e.g. buy or sell oil, bet red or black, pick the pony "she's sure to win" or "damned unlucky", etc. Staking systems range greatly in terms of sophistication but generally aim to take the emotion out of picking a side by making it systematic.

Follow the Shoe

Follow the Shoe is a simple staking system where your next bet is on the last winner. As an example, in Baccarat if the Banker won the last hand then the next bet would be on Banker. The argument for the Follow the Shoe staking system is that it can catch winning streaks on either side. [Anonymous, "Casino Confidential: A Pit Boss's guide to beating the House", Quirk Books Philadelphia, 2008]

Avant Dernier

The Avant Dernier is another popular Baccarat staking system, where your next bet is on the second last winner [Svoboda, P. "Beating the Casinos at their own game", Square One Gaming Guides, 2001] . So if we had the results Banker win, Banker win, Player win; then our next bet would be on Banker. The Avant Dernier system works well when the results come in longer streaks or alternating patterns. [ [http://gamblershandbook.net/gamble/baccarat/avant_dernier.html Baccarat | Avant Dernier System] ] That is, a 5 streak run of Banker wins or an alternating pattern like Banker, Player, Banker, Player, etc. The Avant Dernier System begins to lose when there is much "double chopping", where results come in pairs like Banker, Banker, Player, Player, Banker, Banker.

Regression Modelling

Regression modeling is a sophisticated statistical approach to forecasting future events. In simple terms, a data set of historical results is regressed on an econometric model of factors. As an example, we could model horse speed based on historical data including factors such as track conditions, age of horse, jockey, recent health, etc. By then predicting each horses speed, which can assess the probabilities of each horse winning. Based on this and the current odds wagered, you let the model decide whether to lay, back or stay out of a race.

Regression modeling is the approach used by the largest horse racing syndicates [Atherton, M. "Gambling: A Story of Triumph and Disaster", 2006] but the power of the model is limited to the quality and size of the dataset used.

Horse racing systems

Horse racing betting systems are based on a number of criteria, some of which include analysis of the horses' form.

Often horse racing systems are based on financial systems such as hedging (betting on multiple outcomes in a race) and arbitrage (lay the horse a low price and back it at a high price). Other horse racing systems exist which are based on items such as horse name, jockey form, trainer form, and lane draw. Modern horse racing systems can rely on specific betting possibilities only offered on betting exchanges.

Loss recovery systems such as Martingale can also be applied to horse racing.

Famous Betting Strategy Stories

* In his book, 'Thirteen Against the Bank', Norman Leigh claims to have used a Reverse Labouchere System to break the Casino Municipale in Nice in 1966. With a "cartel" of 13 members, the team managed to win large sums before being banned from every casino in Europe. [Leigh, N. "Thirteen Against the Bank", High Stakes Publishing]

References

ee also

*Gambler's fallacy

External links

* [http://wizardofodds.com/gambling/bettingsystems.html The Truth About Betting Systems from Wizard of Odds]