The Ultimate Staking Plan

I recently had lunch with John Jackson, one of the writers for SmartSigger. When it comes to statistics John would call himself an amateur, but he’s in fact a very knowledgeable chap and if he says he’s an amateur then it’s certainly at a very high level.

One of John’s biggest focuses on his betting is on optimising staking. And the reason for this is that it’s the staking which is at the root of causing most punters to continually make losses.

Even when they’ve got a profitable selection strategy!

Of course, it can be quite hard to recognise that staking not selection process is the issue. While John has written many articles for SmartSigger members which go into the details of why, how and a huge range of methods to properly manage your bankroll. I want to share just one of those with you today.

If you track your profits then it won’t be uncommon to see a graph that looks like this:

Screen Shot 2015-06-15 at 21.45.01

Most pro-bettors would be very happy with a graph like this. Over 1000 bets they made a profit 134 units, a very nice return.

However most bettors would never have made any profit with these selections.


Because of the volatility. It is the volatility that prevents most bettors from being able to make profits even when the selections are profitable!

Let’s take the biggest downswing in this example…

Screen Shot 2015-06-15 at 21.45.35

As you can see above, even with a small uplift at the end of this example there has been an overall downswing for more than 200 bets.

There are very few people who can cope with that kind of downswing, even when they know it’s going to finish in a higher profit. Getting your mind to override your emotion in these situations is very very difficult.

Would you still be betting when you were over 50 units down after more than 200 bets?

What about if you’d only started betting at the high point?

This challenge is what makes profitable betting elude so many people.

Screen Shot 2015-06-15 at 21.48.52

What about if your profit graph looked like this?

Would that make it easier for you?

The downswings are way smaller. That means less volatility which means it’s easier to not get emotionally involved in a downswing.

Rather than focusing on how much profits can be made, we should spend some time on concentrating on how we can reduce the volatility and risk of are selections to make the growth to profit a far smoother journey.

The fact that this will usually lead to more profit as well is a nice side-effect.

One method of doing this, one which John is always trying to show punters is a far more sensible way of betting and one which is a far better way of betting than flat stakes is to vary your stake size based on the odds of your selection.

If a selection has odds of 2.00 then the market is saying it has a 50% chance of winning. A selection that has odds of 5.00 means the market is saying it has a 20% chance of winning.

It stands to reason that we want to bet more money on the selections which have a stronger chance of winning and less money on the ones which have a lower chance of winning.

This has the effect of levelling the downswings and allowing us to get less emotionally involved as well as generate more profit.

And this is something that you can do very easily in Excel.

All you need is to use this formula:

=Bankroll/(Risk Level*(Decimal Odds1)/Edge)

The bankroll element of this equation is pretty self-explanatory, this is where you put the size of your current bankroll.

The Risk Level is a number that indicates how much risk you’re willing to accept. This is a personal figure, there is no right or wrong here. The lower the number the more risk you’re prepared to accept, the higher the number the less risk you’re prepared to accept.

In order to get this figure I recommend that you get all the other numbers in place first and then play around with it until you’re happy with the type of stake sizes your getting on your bankroll.

Next you enter the decimal odds minus one for your selection. And finally your Edge. If you’re unsure how to calculate the edge of your bets then let me know by leaving a comment and I’ll write another post explaining how you can go about doing that.

Start using this staking approach to significantly decrease your downswings and increase your profit.

Michael Wilding

Michael started the Race Advisor in 2009 to help bettors become long-term profitable. After writing hundreds of articles I started to build software that contained my personal ratings. The Race Advisor has more factors for UK horse racing than any other site, and we pride ourselves on creating tools and strategies that are unique, and allow you to make a long-term profit without the need for tipsters. You can also check out my personal blog or my personal Instagram account.


  1. Staking Plan i like the look of that .i do 2 horses in a race each day and most of the time will be good prices
    the software i got works out the the best races to do its not for the fav that why i get good prices with it
    i just cant find the best way to do them.maybe the way what you saying will work.

    cheers michael, keep the good work up you do a good job,

    1. That does make it harder to use this strategy unfortunately. You could however work your stake out based on your average odds and use those along with your risk levels and bank size to determine what to place at the beginning of each day.

  2. Why would you DIVIDE by your edge? This means the bigger your edge, the smaller the bet.
    Perhaps it is Mr Jackson at his counter-intuitive best?

    1. All you need to enter into excel Tom is:

      =Bankroll/(Risk Level*(Decimal Odds – 1)/Edge)

      Replace the words with the relevant figures and it will calculate it correctly 🙂

    1. Hi Mike,

      All you need to enter into an Excel cell is:

      =Bankroll/(Risk Level*(Decimal Odds – 1)/Edge)

      Replace the words with the relevant figures and it will calculate it correctly 🙂

  3. Sorry, Michael. After I’d rushed into print I realized that the edge was dividing the denominator of the fraction, so that an increased edge does indeed increase the value of the expression as a whole. Duh!

  4. Hi Michael
    Thanks for article. I, I’m sure like other readers, would appreciate more information on the Edge. Am I right to think that the result of the equation is the stake size to use? Also I would appreciate some advice on the range of numbers to use for Risk Level, at least as a starting point. Thanks, Paul.

    1. I shall write an article on calculating edge. As you say the result is the stake size. The best thing to do with risk level is to test the formula on selections you’ve been using for a while and then adjust the risk level until you get the stakes you are using, assuming you’re happy with them. This will give you an idea of what to set the risk level at.

      1. Hi Michael
        Would it be possible for you to provide the spreadsheet, excluding selection details if preferred, that was used to turn the first graph into the second?

          1. Hi Michael
            One final question. Is Edge equal to ratio of actual no of winners to expected no of winners?

  5. I’m sure a lot of us do this anyway, without a calculator. Almost human nature. But glad to see it endorsed! I am always left kicking myself when a 20-1 shot comes in and I have only backed at a fraction of my short-priced staking.

    I should say that there are some tipsters whose results I have analysed over 12 months or so, who do better with their longer-priced tips that their shorter priced eg last time I looked, Michael Carr with BackLucrative. Through 2014 you would have been better off level staking than adjusting stakes to odds.

  6. I have not used excel before and I am probably just dumb, but I cannot get the formula that you gave for excel to work. I copied it in to cells B to F, put my bankroll into cell A ( all on the first row down ) then put in various No/s in each of the cells below in the appropriate columns but I cant get it to calculate, so I think I must be missing something. I do not know how to get the edge! but I was just putting the No/4 in there to see what happens, but as stated I don’t get anything

    1. Start with just one cell. Enter the formula and replace the words for numbers and see if it calculates. Now do the same process but using real numbers from your betting, if it still works all is good. Now you can look at the formula you’ve already done and compare it to see where you went wrong. 4 would be a 400% edge, I would recommend using 0.10 as an example of a 10% edge for testing.

  7. Michael, I would certainly like to know how to calculate my edge. Is it perhaps something to do with ROI or ROC?

  8. Hi,
    Being a complete newbie to horse racing i do not have a clue what this system is i tried excel but got no joy their either, managed to get a headache though lol.

    best wishes to your team James

  9. Hi Michael,

    I’m not sure it’s as simple as that. I think it unlikely that that any bettor will have a consistent edge across all race types/conditions. In addition, there are many who believe that you should stake proportionally more on the longer price selections.

    I’d be interested in your views on those two related points.

    Many thanks

    1. You’re right it’s unlikely a bettor will have consistent performance across all race types, you can of course break your results down into conditions and work out stake based on edge under each set of conditions depending on how much time you want to spend managing the stakes. However if you use the edge on all your selections then as long as you’re using one bankroll for them then you’re edge figure is accurate enough as it’s your overall edge.

      Regarding the staking more on longer priced selections. Don’t forget that a key part of this staking is to reduce volatility, which means reducing downswings as well as increasing profits. Even if your longer odds selections produce a higher ROI, if you stake more on them then the volatility and downswings will increase significantly.

  10. i think you should give out a pen and pencil plan as most of us oldies are not up to the excell etc giving we are probably all on medication of one kind or another ha.

    1. You can definitely do this with pen and paper, although I’d recommend using a calculator 🙂 You would break the sum for your stakes into:

      Step 1: (Decimal Odds – 1)
      Step 2: Risk Level x Result Of Step 1
      Step 3: Result Of Step 2 / Edge
      Step 4: Bankroll / Result Of Step 3

  11. I’m guessing risk would be around say 2% of your bankroll to start depending on what price range you’re betting. I would say that this would decrease as the bank grew or doubled. Would you use a rolling edge or change the edge after roughly 100 bets as it will always change from bet to bet or 100 bets to 100 bets?

    1. Personally I risk more like 0.5% because I am very risk adverse. This risk tolerance always stays the same but the stake size will grow/shrink based on bankroll size and odds.

      1. Sorry Michael, I’m not sure if you have answered my query about edge which I use as A/E. This will change over time so I was wondering if you would say to adjust this after roughly every 100 bets or roll it every bet like the bankroll?

        1. Also I’m not sure that risk always stays the same because as the bankroll grows the risk should decrease to add more protection to the bank unless you are taking regular or large dividends and repeating the process. Stakes will increase even if the risk is reduced up to a level that is comfortable/manageable.

          Of course its all subjective and I’m not criticising your approach just saying the bankroll is at its lowest point at the beginning (or should be ) therefore at its most vulnerable and needs protecting more as it grows.

          I’m looking forward to comparing this plan to my results over the weekend and hopefully saying ‘Look at what you could of won!’

          All the best

          1. Sorry I miss-understood the question. Although not necessary I usually keep my edge in the calculation slightly under what my actual edge is and adjust this every two to four weeks.

            I see what you’re saying about risk level, for me my risk levels never change. I know what risk I’m happy with and stick to it. If you’re happy to risk more once you’ve paid back the initial bankroll then you can increase the risk level. My primary goal is to protect bankroll at all time.

  12. So the more profit you make the less protection you give it by never reducing your risk???? doesn’t make sense to me

    1. The risk level you set is a factor in the equation. Although it’s not a percentage of bankroll, you can think of it like that. It doesn’t matter if you have £100 or £100,000 once you set the risk level you’re happy with it will take that into account. If I bet 1% of bankroll I would do that at £100 and at £100,000 the risk level is the same principle, the protection doesn’t decrease because the bankroll gets bigger.

  13. Hi Mike just come across this post even though it’s quite old, when you say risk level how do you determine what a risk level is I’m really interested in trying it out. I usually use 3% of my bank for the day then review it accordingly each day.

    1. One way of doing this by using the probability of the selections chance of winning. e.g. 20% would be 0.20 and 50% would be 0.50. Doing this means by definition the lower chance the horse, the smaller your stake would be. Alternatively you can use a number which is an assessment of the risk you feel is involved.

      1. Hi Mike still a little confused as to how to work out my stake size if my bank size was £500 and the odds were say 9/2 or 5.5 which gives us an 18.18% of winning then the edge is then 0.18 this is were i fall short i can’t take it any further with regards to my stake size. Using your excel sheet I’ve managed to get a SR of 40.85% an ROI of 39.19% which is reasonably good i hope. So was just wondering what would be the best staking system to use on those returns, hope to hear from you soon. Best wishes Terence.

        1. It sounds like you’re getting confused on the edge part Terence. If the probability of the horse winning is 18.18%, but you think it should have a 25.18% chance of winning, then you have a 7% edge.

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