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Chapter One- 3 Main Rules Money management is the key to any successful system. No matter what horse racing system you decide to use in your handicapping, implementing a money management system will keep your wallet (or purse) in check and ensure that you build a long-term bankroll. By following the method outlined in this book to the letter, you'll see your cash flow grow and in time, you'll have a bankroll anyone would be proud of. The first thing to always remember is that you are going to treat your handicapping like a business. Just like a stock broker, you will make investments when the time is right. You'll also pass on races when the time is WRONG. This is where it is important to follow your selection system and not blindly chase races or horses your selection system doesn't approve of. This may mean you'll have to discipline yourself. Rememberanyone can place a bet, but its the true player that bets when the time is right. If a race comes along that you want to bet just for fun or you have a hunch, DO NOT BET FROM YOUR BANKROLL. This is a classic mistake many handicappers make, especially when they feel comfortable with the size of their bankroll. Sometimes you'll come out okay, but more often than not, you'll eventually drain your earnings and that would defeat the purpose of even 2
having a money management system! The next rule you should remember is to spot play only. Do not try to bet every race, or losing is inevitable. Follow your system, look for the most likely spot to play and make your move. If you chase every race, your bankroll will vanish long before any money management system can help you! So we have 3 rules now that are at the forefront of our money management system: 1. Treat handicapping like a business 2. Don't bet from your bankroll against your selection system. 3. Spot play only- no betting every race! These sound like 3 really simple rules, but you'd be surprised how many people break them and wonder why their money management system doesn't work. If you must bet outside of your selection system, do it with spare cash. Just be sure to keep your bankroll set aside for your handicapping business use ONLY. Remember... Without following a money management system, YOU WILL LOSE IN THE LONGRUN! Okay, enough lecturing! Now on with the math lesson! 3
Chapter Two- Math Magic I'm sure many of you groaned at the thought of math, but its really not that hard or complicated. The only rule for this system (as it pertains to the math end of the business) is to bet 10% of your bankroll every time you bet. This rule alone will leverage your wins and losses and keep you afloat and progressively moving forward. Here are a few examples: A $100 Bankroll equals a $10 bet A $200 Bankroll equals a $20 bet A $1000 Bankroll equals a $100 bet... You get the picture. To keep things simple, we'll say we are starting off with a $100 bankroll. Now, your bankroll amount is entirely up to you, so feel free to start off with a higher amount if you like. You may also want to start your bankroll at a lower level, too and this system will still work, but my personal advise is to at least have $100 to start off with. Anything lower will make the growth of your bankroll take longer. Either way, the call is up to you. So now that we have a $100 bankroll for our initial business investment, let's take our handicapping business to the next level. Just like a real business, we need to keep a ledger of every bet. You can do this several ways. From creating a spreadsheet on your computer to handwriting your plays on a legal pad or notebook, use the method that best suits you as a person. 4
Your spreadsheet should look something like this: There are several reasons why we've included the name of the horse on this sheet, but this pertains more to the racing systems. Right now, just focus on the other columns. We've started out with our $100 bankroll amount. That means the first amount we'll bet is $10 (10 percent of our bankroll.) We would write $10 in the Amount Bet column. The other 2 columns will depend on the outcome of the race. If you lost, you would write the amount of money you lost in the Amount Lost column. Fairly simple, right? No matter how often you lose, the amount in the Amount Bet column and the Amount Lost column will be the same. If we lost in our first race after betting $10, the Amount Lost would be $10, right? Easy-peasy, lemon-squeezy. Take a look on the next page: 5
Notice that we took the amount lost from the first race and subtracted it from our bankroll. Instead of $100 in our bankroll, we now have $90 ($10 subtracted from our initial $100 would be $90). That means our next bet would be 10% of $90, or $9. As the cards would have it, we lost that race, too. Our next row would start off with (you guessed it...) $81. Now that our bankroll is $81, we want our next bet to be 10% just like always, but to keep things simple and to always allow you some padding, round down on your 10%. Instead of betting $8.10 on the next race, make it a nice even $8. Remember, we want to always round down because in the long run it will work in your favor. The guideline for the Amount Won column is different from the Amount Lost column. Let's say you won this race and you were paid $24 for your winning selection. $24 is NOT what you would enter into the amount won column. Instead, you would subtract your bet ($8) from your winnings ($24). This is the amount you cleared after your bet, $16. This is very important. Always enter the amount you cleared in the Amount Won column. 6
So now what happens. Let's take another look: On your next bankroll entry you would show your gain of $16. $81 plus the $16 you cleared brings your bankroll back up to $97. We would then take 10% of $97 and round it down to a nice even $9 bet for our next play. According to our hypothetical plays, we are on a bit of a losing streak! That's okay. Don't panic. This is generally the time anxious bettors want to up their bets- DON'T BE THAT GUY (or girl!). This money management system is designed to take these losses. The key to remember is that we are using our selection system in hopes of hitting good payout horses. That means that when our selection hits, our horse will pay and pay well! 7
As you can see, losses are going to happen, but when our selection system spots the big winners we are looking for, the bankroll begins to explode! This system is designed to take on and absorb substantial losing streaks, but recoup quickly when the winners are there. Over time, the bankroll will only grow as long as you follow these simple rules. See the video tutorial for a better look! One thing you should seriously consider is putting a cap on your 10% bet. In other words, let's say that your bankroll has grown to $2500, but you've decided that $2000 is your cap. At $2000, the 10% amount is now at $200 a bet. If you cap it there, you would no longer take 10% of your bankroll once it rose above $2000. If you're bankroll hit the $2500 mark, you would bet $200 instead of the typical 10% ($250). Make sense? This is just another way to pad the system in your favor. This is not an absolute to the money management system, though and is entirely up to you! Hopefully this demonstrates to you the type of 8
money you can accumulate when sticking to a money management system. There are several other systems out there, but this is quite honestly the easiest and most effective management system around. It's done wonders for us and it'll do the same for you! 9