How to Estimate Your Longest Losing Sequence

Long losing runs can make you disheartened or simply just give up. They can be stressful enough to make you start changing systems unnecessarily or even start chasing losses. But with the right preparation and planning, you can weather the storm.

You will hit losing runs and the longer the losing run is the harder it will be to keep faith and keep a level head.

The stress can cause even an experienced bettor to revise strategies too early or adjust systems that do not need to be adjusted – adjustments that could, and often do, have a negative effect on profit.

Longest Losing Runs

The benefits of knowing what the longest losing run is likely to be are:

  1. you can be prepared for it when it happens
  2. you can calculate what size of betting bank you’ll need to survive the losses
  3. you can work out what your bet stakes should be

All of this will keep you in the game when those losing streaks hit.

Without this knowledge you’re working in the dark, making guesses about staking and hoping you always have enough money to absorb any long losing runs and that’s a dangerous strategy.

To estimate the longest losing run you need to know the Strike Rate of your betting system or the tipster you’re following.

What is a Strike Rate (SR)?

A Strike Rate can be calculated by counting the number of winning bets and dividing by the number of total bets.

Strike Rate (SR) = Number of Winning Bets / Total Number of Bets


Example 1: From 100 bets placed you have won 33. This is a SR of: 33/100 = 0.33. Multiply 0.33 by 100 gives it as a percentage figure which is 33%.
Example 2: From 200 bets placed you have won only 20. This is a SR of: 20/200= 0.1 which is 10% (0.1 multiplied by 100)

There is however a slight complication when considering each-way bets in horse racing. This is covered later.

Estimated Longest Losing Run (ELLR)

It is possible using statistical mathematics to Estimate the Longest Losing Run (ELLR) and Longest Winning Run (ELWR) when you know the Strike Rate.  Notice the word is ‘estimate’. It is not absolutely accurate nor guaranteed.  There is no way to know how long a losing run will last but there is a way to approximate it using past data.

ELLR Formula

The formula to calculate the Expected Longest Losing Run is:

ELLR = log(n)/-log(1-SR)

n is the total number of bets     SR is the Strike Rate

It is important to note that this equation calculates the “expected” longest losing run which means sometimes the run will be longer but often it will be shorter.

You can use this formula in a spreadsheet to work it out the ELLR for your specific situation but the table below is a “ready reckoner” for Estimated Longest Losing Runs (ELLR) for a range of Strike Rates and Numbers of Bets.

For example, if your SR was 30% then the ELLR within a sequence of 1000 bets would be 20. But beware, you could lose more than 20 times in a row – real life is different to statistics. So it is best to factor in a small margin of error (e.g. use 21 rather than 20) when doing other calculations using the ELLR figure.

Using  ELLR to calculate Stake Size

In this scenario you have a certain amount of money you’re setting aside as your Betting Bank and you want to work out what your Stake Size should be so that the longest losing run doesn’t wipe out your bank.

Your Betting Bank is £1000 and the tipster/system you’re about to follow has a Strike Rate of 25% and has already had 500 tips/bets.

You can see that with a strike rate of 25% over 500 bets the estimated longest losing run is 22. But you are now moving towards the 1000 bets mark. This means your anticipated longest losing run will be 25.

The expected longest losing run is 25 but what if you got really unlucky and actually had a run of 26 losses followed by a single win and then a further 25 losses? Is your bank big enough to absorb all those losses? Probably not. For this reason, it is best to be very cautious with the amount you are staking.

As a rule of thumb for your stake size, calculate 1/3rd. of your Betting Bank and then divide this 1/3rd. figure by the expected longest losing run.

Stake Size = Bank Size divide by 3 divided by the ELLR

In our example this would set your stake size at  (£1000 divided by 3 equals £333. £333 divided by 25 equals about £13)

Here’s how it would look if you had those 26 losers followed by a single win followed by a further 25 losers.

As you can see even with this “worst-case two losing streaks in a row” scenario you’re still left with over 1/3rd of your original Betting Bank to start over.

Starting Betting Bank £1000
26 losing bets at £13 each -£338
1 winner at odds of 4.0 +£39
25 losing bets at £13 each -£325
Betting Bank £376

 

Using  ELLR to calculate Betting Bank Size

In this case you have decided what your Stake Size will be and you want to work out how big a Betting Bank you need.

Your system/tipster has a Strike Rate of 50% and has already tipped just over 1000 bets. The ELLR you should anticipate is 11 during the next 500 bets.

Using £10 bets what size should my Betting Bank be?

As a rule of thumb multiple your Stake Size by the ELLR and then multiply that by 3 if you want to adopt a low-risk approach or by 2.5 if you can tolerate medium risk.

Bank Size = Stake Size multiplied by ELLR multiplied by 3

In this example that will be £10 stake multiplied by 11 which gives £110. Now multiply that by 3 which gives you £330.

To use £10 bets for a system/tipster with a 50% Strike Rate the recommended Betting Bank would be £330.

Here is a ready reckoner for estimating betting bank size based on different ELLR values and average stakes. It assumes a medium risk.

Staking using a points system

Many tipsters and tipster sites use the notion of a points system for sizes of stakes.

This is useful because a tipster can use, for example, a 10 point scale to indicate how sure he is of the tip and recommend a number of points to bet. Each subscriber’s bet amount would vary based on the size of their available betting bank. An 8 point bet for someone using £10 points would mean an £80 bet (8 points x £10 per point). Someone with a more modest betting bank might be using £2 points and for them, it would be a £16 bet ( 8 points x £2 per point).

Summary

The rule-of-thumb method shown here will stand you in good stead. There are more refined methods for calculating Betting Bank size and adjusting stakes on a regular basis but they are more involved.

Whichever method you adopt, Strike Rate is the key to estimating the longest losing run you’ll need to handle.

Knowing the longest losing run you can work out how big a betting bank you need and how big your stakes should be.

Using the right stakes and the right Betting Bank will help you survive the bad times.

Notes about Strike Rate and Win Rate

Although I’ve used the phrase Strike Rate throughout this article there is another phrase, Win Rate, which is often used and you need to be aware of.

Tipster site Tipstrr, for example, displays a headline Win Rate figure for each tipster but they show a Strike Rate figure in the tipster’s comprehensive Stats page.

These numbers can be different and the difference comes about particularly for racing tipsters and because of each-way tips/bets.

An each-way bet is actually two bets. One bet on the horse to win and a second bet (at reduced odds) on the horse to come typically 1st or 2nd or 3rd.

  • if the horse wins the race that counts towards the Strike Rate (the horse won)
  • if the horse places (comes 1st, 2nd or 3rd) it counts towards the Win Rate (the tip won)

A horse racing tipster who tips a lot of each-ways might have a Win Rate of 30% but a Strike Rate of only 10%. My post on Landry Horse Racing shows a perfect example.

The ELLR based on Win Rate will be radically smaller than the ELLR based on Strike Rate.

In my opinion, for these cases, it makes more sense to use the Win Rate figure to calculate the ELLR.

 

 

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