Martingale – Why it is Dangerous
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Probably the commonest type of betting systems are variations of the Martingale system. These can sound extremely convincing and are therefore very dangerous. The purpose of this post is to help you to identify and avoid these, which form the basis of many of the “foolproof” systems for sale nowadays.
What is Martingale?
A (running) martingale is a Y shaped piece of equipment used on a horse to help keep its head down. The system gets its name from this because of the staking plan involved. Whenever you see a system advertising a “staking plan” think Martingale and examine it carefully for the fundamental flaw in these systems, which is that stakes increase after a loser.
Martingale is extremely simple. You stake your first bet of say £1. If the bet wins, your next bet is also £1 and so on until you lose. But if you lose, the next bet is increased to win back the loss on the loser(s). This continues until you hit a winner, when you revert to the original stake and start again. The amount of increase varies from system to system, but classically it is double the previous bet. This is called a geometric progression, and the numbers get large very quickly. Incidentally the numbers are exactly the same as those for the number of ancestors in the nth generation of a pedigree.
For a first bet of £1 and double stake for every losing bet, a string of 10 losers (not at all uncommon) results in the following:
£1 + £2 + £4 + £8 + £16 + £32 + £64 + £128 + £256 + £512 = £1023 losses.
As you can see, the next bet in the sequence would be £1024.
This causes 2 severe problems – the first is bank size. How much money are you prepared to pump into this system in pursuit of a winner? Remember that although you may hit several winners before you hit a losing streak, because the system always reverts to £1 stakes after a winner, your previous winnings are going to be small (relative to £500 or £1000). Yes, “when” you eventually do hit a winner you will win the money back, BUT…
The second serious problem is that at some point the system is going to collapse completely because none of the bookies will allow you to stake £500, or £1000 or £2000, or £4000…… on the next bet.
“There will never be that many losers”.
Really? About 20 years ago I developed a system for horse racing which predicted on average 1 winner in 3 and would have made me money but for the 10% tax that was then charged on every bet. It was a lot of work and it wouldn’t work now because things have changed, but it broke even over 3 years and made a profit on the track where tax was lower. During those 3 years there was one period where I hit the inevitable losing streak. All punters get these and you just have to endure them. The total consecutive losers was over 40 – I think it was 43. Taking tax out of the equation, if I had been using Martingale my losses on this otherwise profitable system by the time I had hit just 20 losers would have topped £1 million, at £1,048,575 and I would be looking to bet about that amount on the next bet. Remember, I still have another 23 losers to cope with before I hit a winner! A rough underestimate would be that if £1 costs me £1 million after 20 losers, then after 40 losers I can multiply that by another million, to give losses of well over £1,000,000,000,000. If I have that sort of money, what am I worrying about losing the initial £1 stake for anyway?
I was not betting on outsiders. I never backed odds on favourites, but these horses were almost all fancied runners with good credentials for winning. I had several who fell when they would otherwise have won easily (including one that put its foot in a hole and fell half way up the run in), and I remember thinking that “somebody” had it in for me. As it was, with level £1 stakes, I had lost “only” £43.
If you are still not convinced, I know someone who arbs horses regularly and underlays as most pro arbers do. He was saying not long ago that he had backed his 36th consecutive loser. It happens, so unless you have a bank running into several million to spare and a very understanding bookie, please don’t be conned into thinking that Martingale works.
Even with less drastic staking plans such as add 1 to the stake, you are still looking at quite big bets after a run of losers, particularly as no system which is for sale will be mucking about with tiny bets that are going to win you a few quid at best. Even a £10 starting stake will get you into the realms of bookmakers limits after 10 losers or so unless the prices you are betting on are low, and who is going to pay money for a system that tells them to back all the favourites?
In general my advice would be to steer clear of betting systems and stick to risk free or low risk betting, but for those who like a gamble occasionally, I strongly advise level stakes, or a tiered system of say double stake on strong fancies and single stake on others, where the stake on bets in the same group is always the same. Always think about loss limitation, not chasing losses (which is what Martingale does). Its much more fun to invent your own system anyway (even if you lose) than to pay through the nose for someone else’s, and probably still lose!
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