Probability of Negative Return

Probability of Negative Return In our earlier article, ‘What is a Nap?’, we briefly mentioned the probability of negative return but, at that stage, we didn’t expound on what it is, how it’s calculated or how to use it in relation to horseracing results.


However, what we did say in the earlier article was that to properly analyse a series of horseracing selections, such as those supplied by a tipster, you need a large number of selections. The reason for this is that, when the number of selections is large, the distribution of horseracing data looks the normal, or Gaussian, distribution for a random variable.


The probability of negative return is a simple statistic to calculate and understand. The figure calculated represents the probability of a series of selections producing a negative return or, in other words, a level stakes loss. The higher the figure calculated the higher the probability of incurring such as loss.


In order to calculate the probability of negative return for a series of selections, you need to:


Calculate the theoretical percentage profit from each selection, to level stakes. A winner at even money would generate a profit of 100%, a winner at 2/1 would generate a profit of 200% and so on, while any loser would generate a profit of -100%.


Calculate the average, or mean, percentage profit. The easiest way to do this (and the subsequent steps in the calculation) is to create a spreadsheet in Microsoft Excel – which can be as simple as a single column containing the percentage profit for each selection – and use the AVERAGE function.


Calculate the standard deviation of the data in your spreadsheet using the STDEV function. Algebraically, standard deviation, S, is calculated according to the formula below, but if you use Microsoft Excel you don’t need to worry about the mathematics.


If your percentage profit data is contained in, say, cells A1 to A8 of your spreadsheet, simply use the STDEV function in the form STDEV(A1:A8).


Divide the result by the square root of the number of selections, using the SQRT function, to give the standard error.


Assuming that horse racing results are at least approximately normally distributed, you can use the NORMDIST function in Excel, in the form = NORMDIST (0, mean, stderr, 1), where mean and stderr are the mean percentage profit and standard error of the percentage profit, which you calculated in the steps 2. and 4. above.


The result should be a figure between 0 and 1 and, as mentioned above, the higher the figure the higher the probability of negative return and versa. A probability of 0.10 represents a 10% chance of making a loss, or a 90% chance of making a profit, from a series of selections and is typically the maximum value that you’d want to accept if you’re going to back future selections with real money.


We hope you enjoyed ‘Probability of Negative Return’ and we will be back soon with another advanced betting guide. In the meantime, we would love to hear your thoughts on ‘Probability of Negative Return’ in the comments section below.

The Professional Punter’s Guide to Nursery Handicaps

The Professional Punter’s Guide to Nursery Handicaps A nursery handicap is simply a handicap for two-year-old horses. We say ‘simply’ but, by definition, nursery handicaps are contested by immature, unexposed horses carrying weights allocated according to their ability, so they are notoriously difficult to solve.


To qualify for nursery handicaps, a two-year-old must have run three times on the Flat in Britain, or run twice on the Flat in Britain, winning at least once and earning an official British Horseracing Authority (BHA) rating of 85 or lower, or run once on the Flat in Britain, winning once and earning an official BHA rating of 80 or lower.


Obviously, winning form is the easiest for the BHA Handicapper to assess but, while he will usually err on the side of caution when allocating an initial handicap rating, he is often faced by two-year-olds that have qualified for nursery handicaps by virtue of three unplaced runs in non-handicap races, perhaps with disparate performance ratings, and are nigh on impossible to handicap accurately.


Nevertheless, the late Alex Bird, arguably Britain’s best known professional punter of all time, suggested that by comparing the time recorded by a two-year-old with that the winning time recorded by older horse in a handicap, over the same course and distance, on the same day, it was possible to develop a profitable angle for betting on nursery handicaps.


In fact, we can use this approach to create our own ‘private handicap’ for two-year-olds by following the steps below:

1. Subtract the time, in seconds, recorded by the two-year-old from the winning time recorded by the older horse.

2. Multiply the result from 1. by the ‘Pounds per length’ corresponding to the race distance in the table below. For example, if the race distance is 5 furlongs, multiply the result from 1. by 3.


Race Distance Pounds Per Length
5 furlongs 3lb per length
6 furlongs 2.5lb per length
7-8 furlongs 3lb per length
9-10 furlongs 1.75lb per length

3. Multiply the result from 2. by 6 (the average number of lengths/second travelled by a two-year-old)

4. Add the weight carried (in pounds) by the two-year-old, including allowances, to the result from 3. and subtract the weight carried, including allowances, by the older horse.

5. Add the official BHA rating for the older horse to the result from 4.


If you need to find the rating of any horse in training in Britain, you can do so here.


6. If the older horse is aged 4 years or older, look up the weight-for-age allowance that three-year-olds receive from older horses in the Official Scale of Weight, Age & Distance (Flat)


and add it to the result from 5.


7. If the two-year-old did not win its race, multiply the distance it was beaten (in lengths) by the corresponding ‘Pounds per length’ in the table above and subtract this from the result from 6..


The only caveats to this approach are that the two races must take place over the same course and distance, on the same day, and the older horse must be competing in a handicap. Once you have your ratings, you can use them in exactly the same way as any other speed ratings, adjusting them for the weight carried, to provide an indication of the relative chances of runners in most, if not all, nursery handicaps.

The Truth About The Going


The Truth About The Going If you visit the Stewards’ Reports page of the British Horseracing Authority (BHA) website, the chances are that, on any day when racing takes places, you’ll come across an report that reads something like, “So-and-so, trainer of so-and-so, which was pulled up, unplaced, etc, said that so-and-so was unsuited by the heavy, soft, etc going.”


Indeed, the going or, in other words, the underfoot racing conditions, is frequently used by racehorse trainers to explain a horse why a horse below expectations, so it stands to reason that the going is a critical factor in determining the outcome of a horse race.


In the United Kingdom, going descriptions range from hard to heavy, through firm, good to firm, good, good to soft and soft. All thoroughbred racehorses have different conformations and different actions, which can be indicative of the type(s) of going on which they’re likely to reproduce their best form. Horses with a pronounced knee action, for example, hit the ground from a greater height than those with a flatter, “daisy cutter” action and may prefer going on the soft side of good.


The good news for punters, of course, is that the going preference(s) of any horse, except perhaps a lightly raced or unraced maiden, can quickly be determined by reference to its previous form. Horse racing punters who focus on horses with good recent form usually only need to satisfy themselves that their selection is capable of acting under the prevailing conditions.


However, a period of torrential rain after a prolonged dry spell, or vice versa, can often throw up a bevy of “surprise” winners and is a time for punters to exercise extreme caution or to consider “shutting up shop” until the weather becomes settled once again. As a general rule of thumb, fewer horses are suited by extreme going – “hard” and especially “heavy”, which occurs more often – than intermediate going and more anomalous results can be expected during these periods.


The going description for each meeting is provided on the race cards in national newspapers and online, but is not always correct, so for an accurate, up-to-date description visit the BHA “Racing Updates” page. The “Racing Updates” page includes not only a textual description, such as “Heavy, Soft in Places”, but also the Going Stick reading, the time at which it was taken and other useful supplementary information.