Learning To Lose

It is fair to say February has been a struggle from a punting perspective. Selections that were getting their heads in front during January have declined to win this month, celebration replaced by frustration. Disappointing though this is – it is not unexpected.

There is a simple formula you can use to establish the longest winning / losing streak of an event (Source: FlatStats.co.uk):

Log(RUNS) / -Log(PROB)

Where Log is the Natural Logarithm Function, RUNS is the maximum number of runs in a sequence and PROB is the probability of the event happening.

Using Betting Bias figures from 2011, we recommended 940 tips with a strike rate of 16.3%. Because we want to calculate the losing streak, we need to calculate the probability of tipping a loser i.e. 1 - 0.163

Therefore the formula is:

Log(940) / - Log(0.837)

Using a calculator or Excel spreadsheet we get the result = 38.5

That means we can expect to go on a losing streak of 39.  With an actual longest losing streak of 27 last year, this figure doesn’t seem unrealistic. When you consider the average price of a selection is 12/1 then actually, it should be expected.

This creates short term setbacks but that won’t hinder us in the long term. Keep faith in your methods and things will come good in the end, our 2011 results are an illustration of that.

The excellent Hugh Taylor covered this subject on The Form Factor last week and is well worth a watch.