January 28, 2015

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This is by Gavin who runs a hugely respected blog. I really like this piece especially the list of downfalls.

# Go to www.nag-nag-nag.co.uk for more of the same

# Staking systems

Some of the more popular staking systems……

**LEVEL STAKES**

Probably the easiest of all staking plans but one that requires discipline, patience and excellent money management.

Quite simply you divide your bank by a number ( I would suggest 200 but definitely not less than 100) to give the amount of bets you can place before your money runs out.

So if you have a betting bank of £2000 this would mean every bet you place, regardless of odds, will be to the same stake of £10 (£2000 / 200). £200 would involve stakes of £1, £1000 stakes of £5 etc…You now have the capability to go 200 losers without going bust but obviously your bank will grow very slowly. If you are a disciplined bettor then this is the perfect system for you or it’s a great way for a beginner to learn essential money management.

**Benefits:** Very simple to use. Built to take long losing runs.

**Downfalls:** Your bank won’t grow very quickly. It’s a bit boring and you may be tempted to increase your stakes.

**Requirements:** Discipline.

**Probable Outcome of using this system:** ZZZzzzz Boredom.

**Type of person this system suits:** Bank managers. Alistair Darling

**% BANK STAKES (or the Plateau Philosophy)**

Similar to the level stakes but much more fun. Again you take your betting bank but work out your stake by applying a % to this amount. Say you have a bank of £2000 and decide to stake 5% of your bank each time you have a bet then your first bet will be £100…

If it loses then your bank is now £1900 and your next bet is £95 (5% of £1900)

If it wins at 2/1 then you have £2200 in the bank and your next bet is thus £110

And that basically is it, a very affective and simple to use plan.

Though it is impossible for the bank balance to reach absolute zero don’t be fooled by these claims as it is possible to be attempting to place bets of a very small nature should you experience a long sequence of losers. Like a lot of these staking plans there are plenty of variations to this one including increasing and decreasing the % as your bank goes up and down.

**Benefits:** Another easy to use system that exploits winning runs.

**Downfalls:** A long losing run can be disheartening as the size of your bets rapidly decrease. It can take some time to regain your original balance after one of these losing runs

**Requirements:** Patience, decent starting bank, calculator if you’re not good with %’s

**Probable Outcome of using this plan:** A good run for your money. Possibility of large betting bank balance.

**Type of person this system suits (suited):** Gambling betting pro’s. Dave Nevison

**BOOKIES BANK**

A staking plan that is based on the fact that when you lose, someone else has won i.e. The Bookie. You start off with your bookies bank, say £100, and decide to stake 10% of this bank for your first bet, £10. If it loses, this means the bookie wins and his bank now becomes £110. Your next bet is 10% of this bank or £11. Another loser and the bookie is now £21 up with a bank of £121.

10% of this is £12.10 and is your next bet. It wins at 3/1 and you return £36.30. The Bookie Bank is now £84.70 and you have beaten the bookie this time and take your profit and run.

You reset the Bookie Bank to £100 and start again.

Sounds great but obviously you don’t need me to tell you that as the losers pile up your bet size becomes greater and greater as you try to recoup your losses.

**Benefits:** Simple to work out.

**Downfalls:** Even simpler to lose your money.

**Requirements:** The need to get one over on your bookie.

**Probable Outcome of using this plan:** You give up and try another staking system

**Type of person this system suits:** Any Bookmaker!

**FIBONNACI SERIES**

A slight variance on the Martingale, the Fibonacci Staking Plan uses the Italian mathematician’s number sequence pattern to work out your stake. For those of you who fell asleep during maths the Fibonacci sequence adds the previous number to the present number to give the next number in the chain. i.e. 1 – 1 (1+0) – 2 (1+1) – 3 (2+1) – 5 (3+2) – 8 – 13 – 21 – 34……

So your first bet will be £1, £10, £100 (x1) or whatever decide your stake to be

Your next is £1, £10, £100 (x1)

Then £2, £20, £200 (x2)…..£3, £30, £300 (x3)…£5, £50, £500 (x5) and so on.

If you strictly apply the Fibonacci series any win will cover the last 2 losses you had so when you get your winner you should ideally drop back 2 steps and continue. But this is only true if every bet is placed at evens and so there have been plenty of variations of the Fibonacci staking plan.

Some reset back to the start when a winner is achieved, some set a limit to how far up the chain you get before giving up and starting again and some mad fools just carry on going!

It’s all about personal choice and how far you’re willing (or your bank allows you) to go to get your money back.

**Benefits:** Adaptable and capable of generating huge wins.

**Downfalls:** A long losing run and you won’t be bothering with a Swiss suicide clinic you’ll be heading straight for Beachy Head.

**Requirements:** Balls of steel, maths book, Saudi family bank balance

**Probable Outcome of using this plan:** If you use the Staking Plan in it’s purest form, it’s not a probable bankruptcy order it’s a guaranteed one.

**Type of person this system suits (suited):** Terry Ramsden

**The KELLY PLAN**

I’ll be honest here and say that I had never heard of this staking plan before getting a request for me to try and explain the system. Having googled ‘kelly staking plan gambling’ I was still none the wiser. Thanks Jack, you could have asked for ‘Level Stakes Staking’!

Well, having stuck with it hopefully I’ve got it sussed but if my explanation is wrong then I’m sure someone out there will be putting me right.

It’s quite complex and relies on a lot of estimated or assumed variables and certainly won’t be to everyone’s taste but here’s how it works….

The Kelly Plan is based on something called the Kelly Constant and was developed in 1956 by mathematician John L. Kelly. You have to be able to estimate the chances of your selection yourself and then compare this to the actual odds available. If you are able to do this better than the bookmakers you’ll be fine as using the Kelly Criteria will optimise your staking. Unfortuantely for most of us that is a big IF!

So firstly, you have your bank, say £100, and then you pick your horse out and make him a 3/1 chance to win the race. You convert these odds to a %, in this example 3/1 becomes 25%

The best price you can get on your selection with the bookmakers is currently 5/1. The next step is to work out your stake by using the Kelly formula which is

[ (odds x estimation) -1 / (odds – 1) ] x 100 = stake

or using our example figures….

[ ( 5 x 0.25) – 1 / (5-1) ] x 100

which equals £6.25. This is your stake.

As long as you are able to evaluate ‘value’ correctly this Staking Plan will work for you.

As I said it’s not for everyone and does involve a fair degree of estimation but apparently no self-respecting professional punter can do without this Staking Plan.

Like all staking systems there have been many adaptations and with the Kelly Plan there is also the ‘Proportional Kelly’ that divides the % by 2 to give less aggressive staking and helps minimize any risk of getting the odds estimation wrong.

**Benefits**: Optimises your staking to get the maximium benefit from any winner

**Downfalls**: You need to be able to correctly assess a market and know your odds %’s

**Requirements**: Maths Degree would help

**Probable Outcome of using this plan:** You’ll realise that calculating odds is best left to the bookmakers and go back to using Square Root Staking System

**Type of person this system suits (suited):** Einstein, John L. Kelly

**LABOUCHERE**

This system is sometimes called the ‘Cancellation System’ and came to the fore after forming the basis of a roulette system that was apparently used in the mid 60′s to break the bank many times over in Monte Carlo. A chap called Norman Leigh took a team of roulette novices to the South of France in the summer of 1966 and took the casino’s in Nice for a very large amount of money. In two weeks he and his team were banned from every casino in France due to their continued success and you can read all about his exploits and the system itself in an excellent book called ‘Thirteen against the bank’. It used to be quite a rare book and hard to get hold of but I’m pretty sure it was re-printed a few years back and is now freely available on Amazon. For anyone who likes reading about roulette systems or even gambling related stories I thoroughly recommend you get hold of a copy of this book. Or you could borrow mine.

Okay, I digress the staking plan works like this….

You start the Labouchere Staking plan by beginning with any series of numbers, we’ll use 1-2-3-4-5-6, and the idea is to cancel out all these numbers. You do this by staking the 1st and last number added together i.e. 1+6 and if you win you cross out both of these numbers from the sequence, if you lose you add the last bet made to the end of the series of Labouchere numbers. If you are successful in cancelling out the entire Labouchere sequence, you will win exactly 21 units or 1 +2 +3 +4 +5 +6 (=21).

With me so far? Here’s an example…

-Your first bet is 7 units (6+1) and say it loses. You then add the 7 to the end of the sequence to make your new Labouchere chain 1-2-3-4-5-6-7.

-Your next bet is now 8 units (1+7) and this one wins. So you now cross out the first and last numbers and have a sequence which now looks like x-2-3-4-5-6-x.

-Adding the first and last numbers again your next bet will be 8 units (2+6) which is another loser. 8 is added to the end and your chain is now x-2-3-4-5-6-x-8.

-This time you are staking 10 units (2+8) and you have a winner. Cross out those numbers and you are left with x-x-3-4-5-6-x-x.

-Your next bet is 9 units and you win again. The chain becomes x-x-x-4-5-x-x-x and your final bet becomes 9 units (4+5). It wins and you have successfully cancelled out the Labouchere sequence. Time to start again….

Phew! If every bet you make is at evens you will make your 21 points profit but obviously if you are backing horses the prices will vary and this staking plan has the capabilities to make you very rich indeed. Unfortunately, it can also make you very, very poor too.

**Benefits**: If you were to hit a winning streak the potential for winning is massive

**Downfalls:** If you were to hit a losing streak the potential for losing is massive

**Requirements:** A history of lunacy in the family

**Probable Outcome of using this plan:** Being led away by a bunch of men in white coats

**Type of person this system suits (suited):** Fools, mad men and lunatics

**THE MARTINGALE**

More famous as a Roulette system the Martingale staking plan is theoretically and even mathematically infallible. But unfortunately, and many people have found this out the hard way, this doesn’t mean that it works. You can easily adapt the staking plan to horse-racing or any other gambling medium where your chances of success are even money i.e. flipping a coin and it works like this. (We’ll use roulette for this example as it’s easier to explain)

Very simply you just double your bet each time you lose.

You go into a casino and place your first bet on Red.

£1 at evens…Up comes Black, you lose. You are now -£1

Next bet, £2 on Red at evens.

If you win you get £4 back and win £1 (you have staked £3 up to this point). Your next bet is back to the start, £1, and you repeat the process.

If you lose you simply stake £4 on Red and carry on doubling your stake until Black comes up.

Simples! Amazing I hear you cry! Foolproof!

Well, before you go rushing down to the local casino armed with a fistful of cash, consider this.

If Black comes up 10 times in a row (and I’ve seen this many times in a casino) you will be staking £1024 on your next bet just to win £1 (you have staked £1023 up to this point). With casino’s insisting on a £5 minimum bet for Red/Black selections your next stake will actually be £5120 to win £5 profit after 10 losses. Oh dear!

For £1 bets if Black were to come up 15 times in a row you are now having to stake over £30,000 just to win £1. There aren’t too many casinos I know of that allow you that kind of wager.

All of a sudden it doesn’t look quite so good and that is where this staking system ultimately fails. You will need unlimited funds to counter any variance or downswing and have nerves of steel to be placing those kind of bets just to win £1 or £5. We’ve all backed 10 losers or more on the trot and not many of us have the kind of resources available to withstand that kind of losing run.

Time to look elsewhere.

**Benefits:** Very easy to use

**Downfalls:** A long losing run will have you rushing to sign up for a Swiss suicide clinic

**Requirements:** Nerves of steel, Bill Gate’s bank balance

**Probable Outcome of using this plan:** Bankruptcy

**Type of person this system suits (suited):** Kerry Packer

Note: If you’ve ever been tempted by those adverts for the ‘Unbeatable Roulette System’ costing £1000′s then don’t bother. More often than not, all you’ll get is the above padded out to 20 pages. Please make your cheques payable to Gavin Priestley

**The RETIREMENT PLAN**

The grandly named Retirement Plan is another complex staking plan but one that is held in high regard by a lot of pro-punters.

The first of the many variables used is the average odds of the winners you back. It’s probably best to record your wagers over a period of time and when you have a large enough sample size (say 20 winners) work out this average. Simply add up the odds and divide by the number of winners. For this example we’ll say it worked out at 3/1

Next is your Bank. We’ll start with £10,000 and our first bet will be 1% or £100

Now we need a Divisor which is simply double the average odds. In this example is 6

And a Target which is simply the Divisor times the Stake. 6 x 100=600

A couple of rules…

Any losses are added to the Target and after 6 losers you add one to the Divisor for every subsequent bet until you get a winner. It’s very important to keep a track of all your bets and all the variables you used as this will become important once the next winner arrives.

Just as you increase the Target by adding on the losing stakes so you decrease the Target once you back a winner by taking off the bet profit. When this happens you now have a look through you past bets to see roughly what Divisor you were using the last time your Target was at this level. This then becomes your new Divisor and as before follows the same +1 rule for each loser. One final thing, every time your bank increases by £200 you add 10 to the target.

Still with me? I’ll try and make it clearer with an example…

Your bank is £10,000 the divisor is 6 and target 600. Your first bet is therefore 100 (600/6)

It loses so the Target is now 700 (600+losing 100 stake). The Divisor is still 6 so your next stake is £115 (700/6).

Another loser means the Target is now 825. The Divisor remains at 6 giving you a stake of £135 (825/6)

That loses, as does the next (£158), the one after that (£185) and again (£215). The Target is now £1508

We’ve now gone 6 bets without a win meaning the Divisor becomes 7 and our next bet is £215 (1508/7). One more loser and the Divisor becomes 8 and the next bet £215 (1723/8)

Three more losers follow with stakes of £215, £215, £215 before we finally get a winner at 4/1.

Hooray! The profit of £860 is taken from the target which leaves us with a new figure of £1723.

We look back through our records to see the last time we were at this figure and see that the Divisor at the time was 8. You carry on again applying the same rules as before.

Another new staking system to me but one I quite like the look of. I may do my own investigation into this plan over the next couple of weeks. Obviously I’ll let you know how it gets on.

**Benefits:** Reclaims your losses while still trying to reach the required targets.

**Downfalls:** It’s probably too aggressive and will ultimately fail.

**Requirements:** Records of all bets placed. Spreadsheet or good old fashioned Pen & Paper.

**Probable Outcome of using this plan:** Another theoretically sound staking system that doesn’t work and has you starting again in your search for that perfect plan

**Type of person this system suits (suited):** While I test it, me!

Back to Norman Leigh and his band of intrepid roulette warriors. I said that the Labouchere staking plan formed the basis of his system and what he did was quite clever and in theory should have worked. He researched every roulette staking system in history to find out which one was the worst and apparently found the Labouchere plan was responsible for more suicides than any other system. He then simply did the reverse.

This gave birth to the appropriately named……

**REVERSE LABOUCHERE**

The Reverse Labouchere Staking Plan uses a sequence of numbers in the same way the normal Labouchere staking plan does but instead of crossing out the numbers when you win and adding the number to the end when you lose it does the reverse. i.e. when you lose you cross out the first and last numbers and when you win you add your stake to the end.

This has the advantage of protecting your bank as the most you can lose every time you run a sequence is the 21 units. The most you can win now becomes infinite.

Using the same example as before…

-Your first bet is 7 units (6+1) and say it loses. You then cross out the first and last to make your new Labouchere chain x-2-3-4-5-6-x.

-Your next bet is now 8 units (2+6) and this one wins. So you now you add this stake to the end and have a sequence which now looks like x-2-3-4-5-6-x-8

-Adding the first and last numbers again your next bet will be 10 units (2+8) which is another loser. Cross out the numbers and your chain is now x-x-3-4-5-6-x-x.

-This time you are staking 9 units (3+6) and you have a winner. Add it back on and you are left with x-x-3-4-5-6-x-x-9.

-Your next bet is 12 units and you win again. The chain becomes x-x-3-4-5-6-x-x-9-12 and your next bet becomes 15 units (3+12)…..

…..and so on until you either win your fortune or experience a losing streak and cross out the chain. If every bet you placed was at evens then even if the chain went on and on the most you will lose is the original 21 units. The best way to use this staking plan is to set yourself a stop win limit (say 105 units) and when you reach this limit, quit!

As you can see this system really has the power to exploit a winning run and the most you will lose each time you run a Labouchere sequence is 21 units. But in our example you have to win at least 1 in 5 sequences just to break even.

**Benefits:** Has a stop loss limit built into it. Exploits winning runs to the maximum.

**Downfalls:** A few losers will wipe out all the profits of that good run. Very volatile

**Requirements:** Discipline. Small stakes. Piece of paper and pen.

**Probable Outcome of using this plan:** You’ll have fun for a while but give up with it. You’ll get to read a good book!

**Type of person this system suits:** Anyone with a bit of gamble in them. Me!

**SQUARE ROOT Staking System**

Very similar to the Level Stakes but with a slight twist. As I said above, the trouble with betting in level stakes is that your bank grows very slowly and doesn’t exploit winning runs should you be lucky enough to experience one. The Square Root Staking Plan works the same as the level stakes method in that you start off betting the same £10, £5 or whatever but then waits for your bank to go into profit and increases your stake by using some of this excess money.

It does this by adding to your usual stake the square-root of your profit. This gives you a new figure for your next wager.

Example: You have a bank of £2000 and are betting level stakes of £10.

Your first bet loses -£10. Your bank is now £1990

Another £10 loser and your bank is now £1980

Your 3rd bet wins at 5/1 and at your usual stakes wins you £50. New balance £2030

Your 4th bet is now £10 + £5.48 (squareroot of your £30 profit) = £15.48

If it loses you now have a bank balance of £2014.52 and your next stake is £13.81 (£10 + £3.81 the squareroot of 14.52)

Any time your bank dips below £2000 your stake reverts to £10.

One of the better staking systems that combines excellent bank management with the ability to maximise any good runs by increasing your stakes.

**Benefits:** Maximises your winning runs

**Downfalls:** Your bank has to be in profit for the benefits of this staking plan to come into affect

**Requirements:** A calculator unless you can work out the squareroot of 30.58 in your head

**Probable outcome of using this system:** A long and profitable betting career

**Type of person this system suits:** Disciplined betting pro’s. Patrick Veitch