Short-term Scale-Up vs. Scale-Down Loss Recovery in Staking Plans with a Good Strike Rate

Loss recovery is a betting staple, however not all loss recovery plans were made equal.

Normally, loss recovery implies increasing your next bet after a loss in the previous market. To some traders this is a must, others are invariably averse to loss recovery, warning fellow bettors against huge losses.

It would be equally wrong to completely avoid loss recovery and to do it mindlessly without assessing your primary betting strategy first.

In this article, I am going to advocate for an aggressive loss recovery in staking plans with a high strike rate. A strike rate is basically the number of times your bet wins against the total number of bets you place.

With a bit of simple analysis, I will show how an aggressive loss recovery can significantly increase your profit when your bets tend to win much more often than lose.

The Staking Plan

I have recorded a day of betting to the following simple staking plan:

1. Back 10% of my bank on an outcome with low prices (<2.0).

2. Stop-Loss (trade out) at 70% of the potential loss.

I then modelled different scenarios for the profit/loss that could have been generated if I had applied loss recovery to different degrees of aggressiveness.

Disclaimer: these are mere speculations based on experimental results. By no means should you jump at any conclusions after having read this report. Use your common sense and do your own data research before engaging in any type of loss recovery or, for that matter, gambling in general.

So here is a virtual statement demonstrating my theoretical P/L after a day of betting according to the above plan. All odds are real (recorded real-time in football markets on BetFair on January 6, 2019).

Click here to open a PDF file with the statement

Where the bet lost, the line is in red colour.

At the end of the day I got a loss of £77.81. My strike rate was 89% (40 wins out of 45 bets), with an average price of 1.07.

Let’s test different loss recovery plans against this sequence. To make it simple, we will just increase the bets that follow the loss by a variable percentage and for a variable number of steps.

Aggressive scale-up recovery works better when losing streaks are rare

Loss Recovery Scenario #1

1. Multiply 6 bets following a loss by 1.2 (so you bet 12% instead of 10% of your bank, six times in a row immediately after the losing bet). Multiplier = 1.2.

Loss Recovery Scenario #2

2. Multiply 3 bets following a loss by 3.0 (you bet 30% of your bank, three times in a row immediately after the losing bet). Multiplier = 3.0.

Loss Recovery Scenario #3

3. Multiply 1 bet following a loss by 5.0 (you bet 50% of your bank, just once after the loss, and then go back to 10% again). Multiplier = 5.0.

Final bank:

922.19

Total P/L:

-77.81

 

912.12

Total PL:

-87.88

 

898.02

Total P/L:

-102

 

1027.1

Total P/L:

27.1

 

No loss recovery

 

 

Multiplier, cycle length:

1.2, 6

 

Multiplier, cycle length:

3, 3

 

Multiplier, cycle length:

5, 1

Click here to open a PDF file with the statements

As you can see, the best return was in Scenario #3, a 2.71% increase of your bank, whereas the other three scenarios, including the one without loss recovery, generated loss.

Now I’m of the opinion that this is only the case with the low density of losses, i.e. if losing streaks where one loss follows the other. If losses are rare but are likely to go in a close succession, then you might be better off with the next option.

Scale-down recovery works better when losing streaks are more likely

Let’s model a losing streak in our sequence of bets. Suppose, the first three losses happen one after another:

Final bank:

922.15

Total P/L:

-77.85

 

911.11

Total PL:

-88.89

 

723.88

Total P/L:

-276.1

 

499.59

Total P/L:

-500.4

 

No loss recovery

 

 

Multiplier, cycle length:

1.2, 6

 

Multiplier, cycle length:

3, 3

 

Multiplier, cycle length:

5, 1

Click here to open a PDF file with the statements

The picture is now strikingly different: the aggressive loss recovery demonstrates the worst performance. Let’s try to act in the opposite way: decrease the bet after the loss rather than increase it:

Loss Recovery Scenario #4

1. Divide 1 bet following a loss by 5 (bet five times less than initially). Multiplier = 0.2

Loss Recovery Scenario #5

2. Divide 3 bets following a loss by 3 (bet three times as little). Multiplier = 0.33.

Loss Recovery Scenario #6

3. Divide 6 bets following a loss by 1.25 (bet only 80% of your normal bet, six times in a row). Multiplier = 0.8.

Final bank:

922.15

Total P/L:

-77.85

 

1014.83

Total PL:

14.83

 

988.91

Total P/L:

-11.09

 

932.89

Total P/L:

-67.11

 

No loss recovery

 

 

Multiplier, cycle length:

0.2, 1

 

Multiplier, cycle length:

0.33, 3

 

Multiplier, cycle length:

0.8, 6

Click here to open a PDF file with the statements

As you can see, the outcome is predictable: with a drastic short-term reduction of your bet just after the loss, you will get a better result than with a gradual reduction or an increase in your bets!

Which one to choose?

Of course, if I had a magic crystal and knew exactly when the next loss was coming, I would simply withhold from betting in that market, effectively reducing my bet to 0 (smart, eh?). The trouble is, nobody has that crystal and can never predict with a 100% accuracy whether a losing streak is around the corner. You need to analyse at least a month’s worth of your bets before modelling the right loss recovery system.

Based on my empirical analysis, I would stay away from any loss recovery whatsoever with strike rates significantly lower than 100/average_odds. I.e. if you back at around 1.05 – 1.09, you need to win in at least 9 cases out of 10 to stay afloat.

This obvious conclusion is often overlooked by newbies.

There is no point in looking for a good loss recovery plan with a bad strike rate combined with bad prices.

However, if your calculation shows that you’ve got a decent number of wins vs losses, you can choose the loss recovery system that works better than others, such as by doing the math similar to what I did in this article.

Try this simple loss recovery plan yourself by downloading these triggers:

Download Scale-Up / Scale-Down Loss Recovery Triggers

As any loss recovery triggers, they must be added to your existing betting triggers. I suggest copying the trigger block and constants and pasting them into your existing trigger file. Then copy the two actions from the trigger “bet” and delete this trigger. Insert the actions into the existing backing trigger and remove the “back” action that was already there before.

Remember: always test in Test Mode first!

If you have not heard of BetFair yet or do not have an account, register today and get £20 free. Use the link below:
Gamble responsibly! Always be aware that betting is NOT risk-free. You must be 18+ years old before you try gambling, but even as an adult, withhold from spending money in an ill-judged manner. Our company does not encourage you to prefer gambling over other meaningful activities. If gambling is affecting your life or the lives of people close to you, please contact GamCare
 
© 2005-2019 WellDone Creative Software. All rights reserved. Terms and conditions.
BetFair® and the BetFair Logo are registered trade marks of The Sporting Exchange Limited. Gamble responsibly.