Fixed % Minimum Betting - A proposed betting approach
Perhaps the prime objective for a horse race bettor serious about reaching professional status should be . . . finding out how to best handle losing streaks. Any valid long-term money management method must take this extremely important factor into account.
The "Kelly" betting method (to be discussed another article) is optimal for increasing the bankroll during a positive series of wagers where winners are numerous enough to have produced a flat bet profit; however, the same method can decimate a race bettor's hard-won profits during even short losing streaks.
The most used of all horse betting approaches is likely the "Fixed Percentage" approach. This is where a fixed % of the race betting bankroll (example - 4%) is always used to figure the next bet amount. This approach (which essentially will become "flat betting" when a 'comfort-level' ceiling has been reached) somewhat smoothes the more radical bankroll gyrations of the Kelly approach, but it also still cuts deeply into bankroll profits during losing streaks.
I believe it was James Quinn who, about 20 years back, wrote about a method he called, "Fixed Percentage - Minimum." This is one of the better money management methods for lessening the often devastating effects of grouped clusters of losses - i.e. the dreaded, yet inevitable, losing streak.
A warning: The F%M method performs very poorly when you are in an alternating pattern. A pattern like this: w,l,w,l,w,w,l,l,w,l,l,w. But because most players don't come close to hitting 45-50 % of their win bets, for this pattern to last over an extended series of wagers is rare. The usual win/loss patterns for most players most of the time settle into clusters of (smaller) groups of wins and (larger) groups of losses.
Why the F%M method performs poorly in the alternating pattern runs will become apparent. Here are the betting "rules" -
You will bet a fixed percentage of your starting bankroll after every winning race - but you will bet only a non-changing base amount after every loss.
Let's say you set your fixed percentage at 5% - that also becomes the non-changing base bet. If your starting horse betting bankroll is $1000, your starting bet, and your un-changing base bet then becomes $50.
So you can get a better idea of this approach, below is an example of the method applied to a series of 15 races. Gold numbers are the races where the base bet minimum was used after a loss: