If you are interested in betting real money with this system, please read and understand the following. The profitability of this system is dependent on betting the right amounts on each game. Please refer to the Betting Strategy page for more information on the general strategy. This page outlines how to manage your own money.

**Choose your bank size
**

The first step is to choose how much money you would like to put aside to bet with. This amount should be the **maximum** amount you are willing to lose in total. I will refer to this amount as your **bank **(not to be confused with the **pot**).

**Choose your pot size**

The difference between the **pot **and the **bank** is subtle. The bank is the total amount of money you are willing to invest, while the pot is some fraction of the bank, called the **pot-bank fraction**. The size of the pot-bank fraction is up to you. The smaller the pot-bank fraction is, the lower your volatility. A pot-bank fraction of 1 will mean your pot and your bank are the same size. Typically a pot-bank fraction of around 4 is safe. This will become clearer in the examples below.

**Placing bets**

On each bet, I give the bet size assuming your pot is $1. So, for instance, I will suggest betting $0.22 on the Kangaroos at $2.80. Extrapolate this to your pot size. For instance, if your pot is $500, you will bet $110 on the Kangaroos.

**Example**

Suppose Bill wants to invest some money in my model. He has $1000 to invest (and can afford to lose it all – which hopefully won’t happen!). **His bank size is $1000**. Bill chooses a **pot-bank fraction of 4**. This means **his pot is $250**. The suggested bets for the first week are:

$0.18 on **Port Adelaide** at $6.87

$0.14 on **Bulldogs **at $6.34

$0.10 on **Brisbane **at $6.69

(these are the actual suggested bets for Round 13 – 2013). So Bill places the following bets:

$0.18 * $250 = $45 on Port Adelaide

$0.14 * $250 = $35 on Bulldogs

$0.10 * $250 = $25 on Brisbane

Notice that we don’t necessarily bet $250 each week. We only bet as much as is justified. Some weeks we will bet more than our pot, and others we will bet less.

This particular round happened to be a very good round for Bill, as Port Adelaide and Brisbane both won giving him a profit for the round of $371.40. Bill puts his winnings in his bank, but his pot remains the same size the next week ($250). Bill could allow his pot to decrease/increase with his winnings, but this is not suggested as it puts more weight on results at the end of the season (or less weight if profits are negative…). Re-investing winnings between seasons is a better approach.

So why doesn’t Bill just bet his full bank? Profits will be much larger, right? Well, that may be true for Bill’s first round above, but Bill’s volatility is also much higher. That is to say, a bad round or two in a row will completely ruin Bill and he will be out of money and can’t bet any more.

Suppose now that Bill’s pot-bank ratio was 1, so his pot is his entire bank ($1000). He would then have bet:

$0.18 * $1000 = $180 on Port Adelaide

$0.14 * $1000 = $140 on Bulldogs

$0.10 * $1000 = $100 on Brisbane

Okay, well we had a few good wins this round, so Bill would have done quite well. But this particular round is somewhat of an outlier – I only gave Port Adelaide a 30% chance of winning, the Bulldogs a 28% chance and Brisbane a 24% chance. This means we were particularly lucky this week that two long-shots won. Suppose Port Adelaide and Brisbane had have lost (like almost everyone expected) – Bill would be down $410! Almost half his money is gone. Another bad week next week and he is almost ruined already! (In fact, in this particular example, Bill would not have had enough money to bet the next week, as we suggested 7 bets). Unfortunately, it is almost guaranteed that at some point in the season, we will have two or three bad rounds in a row. (But don’t despair – we will also have two or three very good rounds in a row!). But these few bad rounds will ruin Bill very quickly if his pot is his entire bank.

Bill’s strategy of having a pot-bank fraction of 4 means that even if Port Adelaide and Brisbane had lost, he would have only lost $105, and still have plenty of money to invest the following week. So by choosing a reasonable pot-bank fraction, we ensure that we will be around long enough to enjoy the long-term profits that the model delivers.

If you intend to follow the suggested bets and don’t fully understand the betting strategy and above example, please contact me. The profitability of this model hinges on it!