The Statistical Edge: Losing Streaks

How to determine if you are in a skills slump or a luck slump

If you are a regular or semi-regular handicapper, there are two certainties – you will encounter winning streaks, and you will encounter losing streaks. Your ability to manage losing streaks will go a long way toward determining whether you turn a profit over the long haul.

When you encounter a losing streak, the worst thing you can do is use a “due column,” or progressive betting scheme. In such schemes, the bettor increases his wager after a loss, since he is “due” to win, and “guarantees” a profit. Such schemes may work for weeks, until the inevitable losing streak occurs. I tend to be a conservative player with 48-percent winners at an average price of $4.44. But even with a 48-percent win percentage, I recently had a 12-race losing streak. Intuitively, it makes more sense to wager less during a losing streak.

Horseplayers tend to be streaky. Consider this: In 2017, I’ve had 123 instances in which I had a losing streak of three or more wagers, and 118 instances in which I had a winning streak of three or more wagers. My index in the next wagers following the mini-losing streaks was 1.04—or a 4-percent return on investment (ROI). My ROI was 1.54 following the mini-winning streaks.

As detailed in my March 2017 column titled “Chart Your Biases,” I take a “Moneyball” approach to handicapping, which entails keeping track of numerous variables for each bet. But even if you don’t take a complete “Moneyball” approach, you should at least keep track of wager size, approximate odds, winnings, and horse’s finish.

How can you tell when you are in a slump? I suggest looking at your bets in 20-race blocks. If, for example, you are historically a 1.04 ROI bettor and your ROI the last 20 bets is .50, it’s safe to say that you’re in a slump. But it is important to ascertain whether you are in a “luck slump” or a “skills slump.” To use a baseball analogy, are your outs hard line drives or weak pop flies?

Here is an example of a luck slump, and a skills slump:

Luck slump: In mid-March, 20 wagers, just four winners, and an abysmal ROI of .51. But of the 16 losers, eight finished second and four finished third. This is a clear case of “seconditis.”

Skills slump: In early July, 20 wagers, three winners, .56 ROI. Just four horses finished second, and eight horses finished off the board, including a 3-5 shot.

If you are in a luck slump, keep the faith – the photos will start going the other way. Sure it is frustrating, but do not press, and do not look to change things. The law of averages will take care of itself.

But if you are in a skills slump, you must take some action. The appropriate remedy will vary from person to person. However, one action which probably applies to almost all handicappers is a break from the horses. There may be a discernible reason for the slump – perhaps medical, perhaps a personal issue, or perhaps just burnout. I don’t know of anyone who can handicap at full capacity 363 days per year.

As a horseplayer, you are your own boss. In the corporate world, your supervisor might scoff at you for taking a day off for a non-medical reason. But if you are feeling burned out by the horses, you are doing yourself a disservice by trying to “tough it out.” A few days off from the horses might be what it takes to recharge your batteries and regain the winning touch. If you are, long-term, a 1.04 ROI handicapper, chances are, you will gravitate toward 1.04. The late, great Tony Gwynn was a .338 career hitter, but he had stretches in which he hit .270. Yet in the end, he always gravitated toward .338.

Here are a few other suggestions – if you imbibe, get a ride to your favorite watering hole and gripe to the bartender. He or she will at least pretend to care, and say the obvious: “Things will get better.” Another idea: after a few days off, view a few replays of recent longshots on which you won; this is a confidence builder.

Another idea is to temporarily lower your bet size.

One final idea is to hedge your bets temporarily. I don’t think that hedging is profitable in the long run, but it may mitigate a losing streak. For example, if you like the 1 horse but give the 3 an outside chance, hedge with a 3-1 exacta.

To summarize, if you are a winning horseplayer currently in a losing streak, do not press. A little rest and relaxation away from the horses is the best antidote, and when you return, chances are you will return to winning ways.

by Bob Gardner

To see more from the November 2017 issue of Hoof beats, click here.

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