Your Guide to Creating a High-Risk, High-Reward Betting System
With all forms of investment, there is a hierarchy of risk. Whether they operate on the stock exchange or in the betting markets, investors must realise that there is usually a trade-off between return on investment and risk.
If you want slow and steady profits, you must understand that high single-digit ROI is actually extremely good. Mid-range investments offer a mixture of decent returns and moderate risk.
On the other end of the spectrum lies the high-risk, high-reward investment. Cryptocurrency is one of the most salient examples. In the betting field, it relates to making wagers at medium to long odds. The goal is to get enough big wins to tide you over during long runs of losses.
Horse racing is laden with such systems, but football has its share too.
Prepare to Lose Before You Win
In this instance, you are creating betting systems with a win rate of below 40%. If it is a success, you will enjoy some fantastic wins and a lot of losing runs. Having the right psychology to cope is critical. Otherwise, you will throw in the towel without ever giving your system a chance. This just compounds your losses by accepting the losing bets, but giving up before benefiting from the winning bets.
If your strategy has a 30%-win rate, you can expect a losing run of 11 within a 50-bet sample! In 1,000 bets, you will likely experience 19+ straight losses against potentially six wins on the spin.
You need to create a very large bankroll or use small stakes to succeed. If you follow the rule where your bankroll should be 5-10 times the size of the longest likely losing streak, you must have between 95 and 190 units on a system with a 30% strike rate.
Another way to determine your betting bank is to work our your largest downswing (amount lost between highest profit mark and how low your bank went before achieving a new high profit mark. With that figure, depending on your risk profile, you can either x1, x1.5 or x2 that figure to determine your bank size
You could extend the life of a system or reduce bankroll by choosing proportional staking. However, this also means it takes longer to recover your losses.
In general, low strike rate betting systems in football could include:
- Backing sides to win at odds of 3.00+
- Backing the draw
- Over 3.5 goals
- Strong teams on handicap bets
- Home teams to score 3+ goals
Another issue with such a system is trying to find consistent profit. It is much harder to have five straight winning years or 10 out of 12 profitable months, for example. Also, you need to pursue a vigorous proofing process to ensure a small number of big wins does not skew the system’s results.
Creating Our High-Risk Betting Strategy
Jon’s Value Home Wins strategy is an example of a high-risk strategy that could yield long-term. For a system with a strike rate below 30%, there is surprisingly little drawdown. It features medium to long-odds wagers on home teams from five leagues.
This strategy’s nature means that a couple of the leagues may have a bad season, but other leagues can pick up the slack.
The Scottish Premiership part of the system has found 2020/21 tricky, but it has shown an excellent profit in general. Overall, the strike rate is 29.2%, and the ROI is 19%. The longest losing run to date is 14, though the drawdown is low at 24.70.
Let’s see what we can conjure up today…
What I found was a very useful microsystem indeed. I found that the following parameters have been profitable for three consecutive seasons:
- Home teams in the French third tier and German second division.
- Odds of between 3.00 and 8.00 to win.
In both leagues, you would have earned at least 12% in each of the last three seasons, including strong results in this unusual 2020/21 campaign. After a major dip between 70 and 90 bets, it has performed extremely well.
After 146 bets, the strike rate is extremely high at 36% for a system with average win odds of 3.63. The edge is absolutely enormous at almost 30%, and the ROI is also huge at 31%. However, this system has endured a losing streak of eight, and you still lose significantly more often than you win.
Remember, the above is based on average odds. Check out what happens when you manage to get maximum odds. Of course, this will never actually happen, but you should certainly try to do better than the average. Try your luck on the Exchange to see if anyone will match your bet.
You can clearly see the difference when you get good odds. There is no major drip, and the win rate and ROI increase markedly.
You end up with 52 more bets. This is because a few teams that are probably 2.80 – 2.98 to win creep into the system as their odds exceed 3.00 briefly. The strike rate only goes up marginally, but the edge and ROI are now over 40%!
Final Thoughts on Creating a High-Risk, High-Reward System
I managed to create a betting system that isn’t necessarily high-risk (despite the article title) that still offers a very high reward. It is very much a mini-system I would seek to include in a portfolio that covers all bases.
Developing a mixture of low risk (read here), medium risk (read here – link) and high risk models and micro-systems is an ideal way to create an investment portfolio for sports bettors. In fact, with a bit of effort is readily possible to do this already with the combination of betting models and systems provided by Predictology [Link]
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