Money Management

Correct money management is easy to explain. For most it is impossible to follow. I have known some very, very good handicappers all broke and out of the business because they cannot follow proper money management principles. Double-up systems, star betting, the Kelly Criterion etc all have the same thing in common. They negatively affect cash flow and raise the break-even percentage that must be accomplished.

Any time you vary your bet size by the slightest amount you increase the break-even percentage of 52.38%.If you increase your bet after each win your break-even jumps to over 55%. If you have 1 star and 5 star bets or bet twice as much on some plays, you should understand that only the large bets are meaningful to whether you will be a winner. You might as well not bet the smaller ones they will not matter in the long run.

Some say you should increase your bet when you are on a winning streak and decrease it when you are on a losing streak. The key word is "are". If you won yesterday you "were" on a winning streak. That was yesterday. If you KNOW you will win today why not bet it all ? If you know you will lose today, why bet at all? I recommend playing no more than 2% of your bankroll as a unit. Anything over 2% is unacceptably risky even for recreational bettors.

After over 20 years in this business I know approximately the number of plays I have each year. I know what my bet size is. I also know the standard deviation for my win % is 4.Yes I know it sounds dull and it probably is but as a great economist once said he always looked for boring businesses. They were well run, without surprises and he knew what to expect.

In conclusion I bet 2% of my bankroll and continue to flat bet until my bank grows by at least 40%. Then I recalculate the 2%. One other item of note that is unique and perhaps arguable is that I NEVER lower my bet. Remember if you vary your bet up or down your break-even goes up. At a 2% unit and over 20 years experience I am comfortable that I can ride out any extended losing streaks that are inevitable to occur.