5th December 2016

Hi ,

Learning the point at which you need to stop betting if things aren't working your system or strategy is a fine line. You don't want to stop too early and miss out on a profitable system because you were expecting profits too quickly, but you also don't want to keep betting on a strategy that is going to make you long-term losses. So when do you stop?

This is a topic that's seldom talked about but is every bit as important as knowing when to place a bet and how to find the selections.

We need to start by assessing the way that you personally bet.

This is very important!

Do you play a large number of strategies or systems? Do you handicap each day or just use one system or method? It's always good to have in your mind your strategy before beginning the analysis so that you the right method when re-assessing.

Assuming that your bank is suitably large enough to cope for the downswings of the selection method that you are using, I would suggest that when it drops to a point of 50% of its highest point you take a look at the method to see if something needs changing. Of course there are more complex statistical approaches to this which can be more accurate, but this is an excellent starting point that requires no complex mathematics.

I'm also going to be assuming that you are not using some kind of ratchet or other staking method. In other words that you are simply placing a single unit on each bet until your bank doubles.

So we've been betting and unfortunately have reached 50% of our original bankroll. The question is now... what do we look at?

The first things to check are:

• Make sure that you are not deviating from your selection and wagering strategy.
• Make sure that you are not over tired and making mistakes.
• Confirm that wherever you get your information or data from has not changed their format. You don’t want to spend time re-evaluating your methods if the data is the problem.
• Check your records to see when you last had a downswing similar to this size. Was it around the same time of year, in the same races etc.... Did it recover?
• Go back to your documentation when you first began to use the method and calculate what kind of downswing you can expect.
• Check your recent downswing to see if it's within the expected downswing size.

If you find that you are not deviating from your strategy or making mistakes with the selections, the data is still being provided in the same way as it always has been, you've never experienced a downswing like this before and that you're having a bigger downswing than would be expected. Then...

...it's time to look at your method again.

To do this you're going to need to go through the same process you did when you created the strategy.

By doing this you will find what has changed in either the market or the selection process. If you can't find anything then it may be that this particular strategy has come to the end of its lifespan.

Unfortunately a lot of profitable methods do have a lifespan. This can be anything from a few months to decades. When data that is a key part of your strategy becomes easily available to the betting public then that indicates the beginning of the decline of profitability of the method.

If you are experiencing this kind of downswing then I suggest that you no longer bet on the selections until you've found the reason for the downswing or have confirmed that it's simply variance and the profit will pick up again in time.

By following this you will prevent yourself from ever losing your complete strategy bankroll.

Best Wishes,

Michael Wilding