How many handicappers actually keep records? How many know their exact win percentage? How many know the percentage of bank that will save them from "gambler's ruin"? How many just wing it? Well, money management and record keeping are not topics that most handicappers seem to be too interested in. I have always felt that good handicappers fail to turn a long-term profit because of little or no attention paid to how they manage their money at the track. Do you need a sophisticated plan? I don't think so; you just need a plan. Here's how I do it.
First of all I think of playing the races much like I would if I were a day trader of the futures market. An online account makes this possible. I think in terms of units (contracts) when I place a wager and a percentage of capital. Through extensive research I've created models or profiles of horses that are handicapped against themselves as well as the field of horses they will be competing against today and then apply odds or a fair price for a break even point. When the price is above that break even point I make the bet. I use this approach for prime profiles only. All others are handled with the Circle
You probably noticed in my Optimal Pace Model article that the database had some profiles like 2dEP5+, etc. I know that fair price for that particular profile/model is at 9-5. A 2dEP3 is at 4 to 1 and so on. I also know that a large percentage of the time the 2dEP5+ runs second so I adjust my wager (percentage of bankroll) to fit that reality. The plan is to wager 2% of bank on a straight win bet and 4% of bank on a win/place bet. With the win/place bet I use a 1-unit/2-unit approach. Say I bet $100 to win then I would bet $200 to place as well. I admit this has been a struggle for me and I'm still working on it. I know it makes psychological sense to play the 1 unit/2 unit approach because I don't do well with long losing runs. We have to know ourselves after all. But on straight win bets it's still 2% of bank. (My place betting approach gets 5% since my win percentage is high.)
You will need to know your winning percentage to make the proper percentage of bankroll work for you long term. For example, if you have a win percent of 30 then you'll need to prepare yourself for approximately 13 loses in a row. At that win percentage a win bet of 2% would keep you from losing your entire bank. The draw down of your account would sting but not put you out of business. For extra protection I would adjust your percentage at the end of the day. Not only do you get that extra protection but you will get the added benefit of "velocity of money" - kind of like compounded interest, when you're winning you are betting more and on the down turns you are betting less. You get the best of both worlds. To help you determine your optimal percentage of bankroll to wager here's a chart:
Win percent——-# of losses you'll have to withstand
I've found that this approach is not difficult to follow and it works.In summary: Create profiles, determine break even point for each profile, determine win percentage, determine optimal percentage of bankroll, wager that percentage on each race and adjust at the end of the day. It's a bit of work but it's well worth the effort. We don't need to be "experts" to turn a long-term profit; we just need a simple yet sound approach to handling our money at the track. This is just my way; it's not the only way. Let your records lead the way.