I recently posted a thread in NFL handicapping about something I call the Pendulum Cycle Theory. I was asked a question about the NBA and saw it was a different animal from the NFL. After pondering the question I decided to try an experiment.
I am going to randomly choose bets in the MLB using a variation of the Martingale System. The standard Martingale System would have you double your bet for every loss you incur. The problem is that your losses add up quickly and your bankroll can blow up before you know it. I tried an experiment before that was disastrous. 9 straight losses. A standard Martingale chase can not withstand losing streaks that deep. It would cost in excess of $10,000, and if you suceed you would net an ROI of less then 2%. That's not even worth it.
The variation that I am using has you add one unit every time you lose. You keep adding a unit until you have recovered your losses +1 unit. Your losses are not fully recovered with your first win, so you keep adding more units until you have recoverd. I will gove an example. I will use roulette betting to demonstrate the concept. 11/10 odds of sports betting complicates things and this is hard enough to explain without adding that element to the picture.
Let's say we have a series of 5 bets that are all losses. We add one unit with each loss:
Up to this point we have lost a total of $15. Now we have a winning streak.
- $1 loss -$1
- $2 loss -$3
- $3 loss -$6
- $4 loss -$10
- $5 loss -$15
Notice how on the 3rd bet of the winning streak I only need $2 to recover my losses. I add $1 so that I am ahead by one unit.
- $6 win -$9
- $7 win -$2
- $3 win +$1
The advantage of this system as opposed to doubling up every time is that you can sustain a much larger streak of losses before going bankrupt. The disadvantage is that it takes more wins to recover your losses.
I am going to apply this variation of the Martingale System to random bets in the MLB. I am not handicapping. My only stipulation is that I am risking $110/$100 or less. I will choose over/under or run line bets that meet that criteria. $25 is one unit. I adjust my bet size for the juice to win $25. Each time I add a unit in a chase it will be $27.50 if I am risking 110/100.
I am paper trading this, not using real money. My bankroll is $2,000. My target is 26.25% ROI. ($525) If I reach my target I exit with the profits. I have chosen this target because if I can manage similar results in the NFL and the NBA I will be over 100% ROI for the year. At that rate it would take 6 years to break $100,000 and make 6 figures a year. If I do not reach the target than the most likely scenario is that I have blown the account up.
I started this experiment yesterday, but than it dawned on me that it might be cool to post it in this forum. It will help keep me on track and share something cool at the same time.
Yesterday I chose
6/28/12 – (105/100 bet $26.26 to win $25) SD (Padres) vs HOU (Astros) Over 8.5 win $2,025
Today's game is
6/29/12 - (110/100 bet $27.50 to win $25) PHI (Phillies) vs MIA (Marlins) Over 7
I'll try to post a new game every day. This chase system can sustain large losing streaks so I am hopeful that it will produce good results.
Let's see if this thing works.