On The Same Page - i.e. p65

A couple of comments on my post yesterday. Dr. Tsouts asked:

Speaking of banks and staking what do you suggest to those who follow many tipsters? Keeping a common bank or an individual for every tipster? I guess the second is better but we all have a life eventually...

I'd definitely keep discrete banks, for a couple of reasons -

1) So that you can easily compare tipsters

2) Tipsters often suggest specific bank sizes and staking strategies

If you're organised, I'm not sure there would be much of a time saving from maintaining a single bank.

Someone named James also had a comment on my post, specifically related to my comments on staking, writing:

If Master Cassini had actually read Betfair Trading Techniques he would have access to a spreadsheet and simulator to test level stakes against other money management systems.

Even a fractional Kelly kicks sand in the face of level stakes. Whilst useful for testing a strategy, level stakes is woeful for building wealth.

If Master James had actually read my post, he would have seen that that was exactly what I was saying:

About level stakes, I would say that this is the only way to validate whether or not a system is profitable, and for comparing one strategy against another, but for building a bank, it's far too passive. My approach is to increase stakes as the bank builds.

In Betfair Trading Techniques, I read on page 65:

Level stakes is okay for the initial evaluation of a trading model but level stakes won't increase wealth at the optimal rate.

Exactly. On the subject of building banks, I was asked via Twitter:

"what is a good figure to get to, to start using some winnings?" 

My advice was:

As for withdrawing money, I'd say only do this when you have more than you can use. Your betting bank is your capital, and should be used to build your 'business', not to pay for your lifestyle.

I added a link to a 2011 post on the topic. Part of the discipline to be a long term winner is that winning or losing doesn't make a difference to your daily life. If you get excited about a win or depressed about a loss, you're staking too much. And if you think it's a good idea to pull money out to buy a new sports car, or another foreign holiday, well that's short-sighted at best, and probably a bit of a fib at worst.  

Coincidentally, I then came across this advice on my Twitter feed, courtesy of Stephen Burns: 

Before you can trade you have to get your personal finances in order so you can build up enough capital to open a trading account. Before you can trade you must first develop the self control and discipline to earn, save, and grow enough capital to enter the game in the first place….. – Steve