5 months in to 2020 and the profit curve is starting to show a clear trend of sustained profits each and every month. However, what I want to talk about here are drawdowns and the impact they can have on your betting.
A drawdown is simply a losing run that takes you from a peak to the point at which losses stop and you recover past the previous peak. In 2020 we have had two noteworthy drawdowns. The first came in March (the first bubble in the diagram) where we dropped from +122u down to +95u – that is a 27u drawdown on our betting bank. The second was in May when we dropped from +164u to +132u – that is a drawdown of 32u.
What is important to note in both of these instances is that the recovery after the drawdown was fairly quick. The first drawdown started on 10-March when we were at +122u and on 28-March we recovered and reached +125u. The second drawdown started on 2-May when we were at +164u and on 31-May we recovered to +167u.
During drawdowns you will learn a lot about a service or tipster. On a winning run it is easy to carry on tipping bets and carry on as normal. It is on a losing run that you will find out most – does the tipster change the sort of bets they choose, do they start placing higher stakes to chase, do they start increasing the volume of tips to try and recover? If you see any of these behaviours in a tipster that you are following you need to seriously assess whether to continue following them. At Sports Betting Portfolio we know that we have an edge in our bets and that long term this works in our favour and we will make profit – there is no need to change the process and the winners will return.
If you joined us on 1-Jan at the beginning of the year with the advised 100u starting bankroll then neither of these drawdowns would have caused you any issue. For the May drawdown you would have a bankroll of 222u (100u starting bank plus 122u profit) so the loss of 27u would not cause any concern. However, if you joined us at the beginning of March and immediately hit the drawdown you may well have questioned the service and the drawdown would have a bigger impact on you than a longstanding member who has built up a bigger bankroll.
During both of these drawdowns I had members contact me privately asking if they should reduce their stakes. I am always consistent in my advice that you should never reduce your stakes with a 100u bankroll. We lost 27u but that means we still have 73u bankroll to bet with – that is still a large bankroll. As you can see from the graph by not dropping stakes and sticking to the plan we were able to recover fairly quickly and painlessly. If we had reduced stakes then the recovery would have taken considerably longer.
A losing run can be tough mentally – your mindset is one of the hardest things to master in betting. You have to take the emotion out of it completely. Don’t be depressed by a losing bet or a losing run, and don’t think you are invincible after a big win or winning run. Both are dangerous and will cause you to move away from what has generated your previous profits.
So, in summary, we keep detailed records like this so that we can analyse our performance but also to offer reassurance when real life hurdles are thrown at us in betting. By looking at historical data you can assure yourself that by sticking to the plan is the best course of action and take confidence in our ability to select the right bets for you.
If you have any questions please contact us and we would be delighted to help!
