Although we are all interested in betting to make money….one of the key lessons every punter has to learn at some point is exactly how to lose money.
I appreciate this all might sound strange coming from a site devoted to ‘making money betting‘ but please allow me to explain. To help me do so I will use the real-life example of a tipster that made £4773 and then promptly lost £3472 of it in no time at all…
It’s Easy To Win These Days…
With such easy access to quality tipsters these days (especially those in the SBC Hall of Fame) one of the key tests for punters keen to make money betting, lies in their ability to win the psychological betting battle.
And the biggest test of this often comes in handling losers…especially when these losses arrive in close succession.
After all, the winning side of the game is fairly easy. Bet wins, you get paid. End of.
But when it comes to losses and the occasional bad losing runs, well that is when it can get trickier.
Understand The Worst, Expect The Best
It is absolutely essential that when assessing any tipster service you understand from the get-go just what the worst case scenario might well be if following them.
Too many tipsters (and I shall also say here OTHER tipster review sites) simply focus on the positives in their reviews. How much you could have made. Why you need to follow them etc..
They skirt over the bad runs and any negatives because they too are blinded by the good runs (and possibly their need to make money referring sales)
All of which can ultimately hide away some of the at times painful realities of following some tipsters. Effectively – This is the psychological battle we have to win.
Don’t Be Confounded By Compounding!
To help explain this scenario at play, let me take a classic example as first published in the latest SBC magazine (Issue 94) and our review of a very promising tipping service.
On the outside looking in, this tipster has a very profitable record, having made 164.5% bank growth over the past 12 months (effectively doubling your money) from 611 proofed bets to their advised betting bank.
They have a highly unique approach as they focus at the front-end of the betting market and short-priced tips. By doing so they achieve a very high strike rate of 81.7% so more than 4 out of 5 bets go on to win.
With such a high strike-rate, this opens up the potential of what is often termed ‘compound staking’ or ‘compounding’.
Compounding is a popular and easy staking method where you simply risk 10% of your betting bank on each and every bet. The logic is simple – as your bank grows, so should your staking and your profits. Any losers you get (roughly 1 in 5 given the strike-rate in this instance) will be easily swallowed up.
It is often touted as a great way of making big strides from your betting – sometimes far in advance of level staking.
Well that is the theory at least. Yet the practical reality is not always that simple as the stats as taken from our review will help to reveal.
A Profit Of £4733 & A Loss Of £3472
Let’s consider you have followed this tipster since it began on the 24th September, investing £1000 initially via a 10% compounding staking method.
After a great run from the first 400 bets, you have turned this initial £1000 into £5773.34 – a profit of £4,773.34 as of the 19th April 2015.
But then disaster strikes…the service then starts to hit a losing run and before you know it – what was £5,733.34 has been reduced to £2,301.01!!
Still a fine profit on your initial £1000 starting point but what a rough run – losing £3472 in the space of just a few months.
My experience tells me that in this scenario most punters would not cope unless they were fully prepared for this loss and were running this compounding bank as a high risk option.
Most would walk away, throw in the towel and give up. Battle lost.
Sensible Level Stakes Punting – Less Glamorous But More Steady
The far more sensible and mild-mannered approach is to simply place the same level stakes bet and grow your bank more organically. Basically putting the same amount on each bet as per the level staking plan.
So whilst you won’t get the highs of a potential huge profit (at great risk) you would actually have made more money this way as the table below reveals.
In fact you would have ultimately made a much higher profit via level stakes AND also staked a heck of a lot less!
The graph below as taken from SBC 94, showcases just how large those swings would have been if compounding versus those at level staking.
Its fair to say – compounding is a veritable rollercoaster ride!
Why Detailed Tipster Analysis Is Vital
This is just one brief example of why looking at a tipster from all angles and not simply the profits on show is so critical.
In fact, you need to look at the worst case scenarios to ensure you are fully prepared for what we may come in the future.
As a punter you also need to be realistic with your staking. The old financial investing mantra applies to betting just as it does to stocks and shares or house buying. High rewards come at high risks!
If the service features above interests you or our analysis on compounding then do check out the full review in SBC 94.
Although we do not recommend the 10% compounding bank some others do, we recommend a different approach that might well heighten your profits but significantly reduce the risks.
Equally if you are after more advice on winning the psychological betting battle, you might be interested in our special report ‘How To Adopt The Mindset Of A Pro-Gambler‘ which is available to all SBC members.
Sign up now and gain instant access.
