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Grade 1
Join Date: Jun 2005
Location: Nanaimo, British Columbia, Canada
Posts: 8,853
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The Mind For Consistent Results
This video inspired the following article, written by someone ( note: not me) whom I consider a very astute and dedicated student and teacher of horse race analysis and wagering, who has given permission to republish this here.
Outstanding article - a crucial concept to grasp in order to become a consistent winner, IMO.
The Mind For Consistent Results
[Full Disclosure] This article is based on a video presentation given by Mark Douglas and titled, "Mind over the Market." I have rewritten the article and gave it a new title, so that it directly addresses the handicapper.
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One of the main issues that I see all the time is that people do not utilize their method to its full potential. There is a big disparity between what they get and what they could have had if they had just followed their methodology. There is a big disconnect which causes a profit gap.
What we want is consistent results. We want to produce an income that we can rely on from our handicapping. However, developing a steady income is not such an easy task.
There is a big difference between winning and being a consistent winner. The relationship between the two is at odds with itself. This is a difficult mental barrier to break through.
Winning requires very little skill at all. Play low priced favorites and sooner than later you will land on a winner. You don't need any logical reason or theory to go to the YouBet, site open the wager pad and click on the favorite. And you can find yourself cashing in on the favorite. Or you could be "lucky" that day and cash in on a monster longshot. If it is that easy to win, how much harder can it be to make a steady, consistent income?
Surprise! Consistency is a challenge. A big challenge.
Meeting the challenge requires learning the type of skills that people are not used to learning. Mental skills.
People assume that if their technical method gives them a signal to get into a race and if the method produces a high percentage of winners then they will have a consistent income. They don't realize that the proper execution of the method requires mental skills.
Basketball Player Example
Take for example a High School basketball player. He will go to the gym and practice his free throws for two to three hours a day. It wouldn't be unusual for him to hit 50 in a row. The problem is that he could not even hit two in a row if the circumstances were that he was in the final game of the NCAA Championship, his team is down one point, there is only a few seconds left on the clock and he was just fouled. Under those circumstances, without the appropriate mental skills, him hitting either one of those free throws is very unlikely. No matter how well the guy can do it in practice, most people will choke. They will focus on "not blowing it" and blow it.
Mental Skills
We have technical handicapping methods telling us what to do, and with the potential to produce consistent results. But like the basketball player, without developing the appropriate mental skills, it is unlikely that we will be able to do what our method is indicating, without making a number of execution errors. In other words, to stay positively focused on the process of handicapping, by doing exactly what is required, when it is required, without hesitation, reservation or fear.
No matter how good a technical method is at selecting probable winners, turning those winners into a consistent income requires the ability to do or not do some things that the method itself can't help you with.
Limitations of a Technical Method
A method can't force you to predefine the risk before making a bet. Also it can't make us hold back from playing too many races. Or make us avoid even money when we should be looking for 10-1 and above. Or stop us from betting longshots from the bottom of our odds line. No program can give us consistent results if we are susceptible to these kinds of mental errors.
Psychological Implications
These kinds of mental errors are the result of thinking, believing or assuming that our technical method is telling us what's going to happen next on a race by race basis. And not understanding that handicapping programs are not designed to do that. Technical methods, patterns, handicapping programs are designed to put the odds of success in our favor over a series of races. It may not seem like it on the surface but there is a profound psychological implication here.
What this means is that the outcome of the signals generated by any technical method on a race by race basis are unique and random. There is no way to know in advance what the outcome to any particular signal will be over the sequence of wins or loses.
Random Outcome to Produce Consistent Results
By accepting the randomness of these outcomes a person can produce consistent results. It is somewhat a paradox to think that events that have a random outcome can produce a consistent result.
Technical methods will give the person the same kind of advantage that the Casino has over the individual player, if the person can think of it from the proper perspective.
Player Frustration
The player's frustration comes from expecting something from a technical method that it just cannot do. Technical methods define and identify patterns of collective behavior. The patterns definitely exist. They repeat themselves over and over again. The problem is that the outcomes do not always correspond with the patterns on a race by race basis. Yes we have patterns, yes they repeat themselves, and our mind just naturally thinks that we will have a pattern that is consistent, therefore I should have an outcome that is as consistent as the pattern.
This is not true.
There does not have to be a relationship between the outcome and the pattern. A pattern such as a Lone Early for example, may pay big in one race and not at all in the next race. Even though the specific criteria being used to identify the pattern is the same, the individual outcomes have nothing to do with each other. There is a random distribution between wins and losses over any sequence of races. If a player is expecting a winner and gets a loser the player is going to be frustrated. If the player is expecting a loser and gets a winner, again he will be frustrated. You take the same set of criteria and end up with random results. Yes, patterns repeat but on a random basis.
There is no point in analyzing, there is no point in judging and trying to figure things out.
Special Quarter Example
Think of it this way. You have a special quarter to flip. It is special because it is weighted so that 70% of the time it will land on heads. Just because you know that mathematically and statistically that this pattern will come up heads 70% of the time, is there any way to know the actual sequence of heads or tails? In other words do you know when the quarter will land on heads?
I am going to flip the coin 100 times and statistically it is going to come up heads 70 times. I still don't know which flip it is going to come up heads. It’s not the times I need to know now, it is which flip that I need to know. Flip the coin once it comes up heads. Flip the coin twice it comes up tails. Flip again it is tails, flip again its tails, flip again its tails. So there can also be streaks of heads or tails. There can be streaks but the point is that there is no way to know the actual sequence.
So how do you use a technical method effectively and maximize your profit based on the pattern that it identifies?
We have to do it in a very disciplined way. Our mind has to be free to be able to execute these bets without making mental skills errors. The mental skills errors come from believing that because the pattern is present it is going to give me a profit on this bet. This current bet is going to be a winner. You cannot think that way.
Most players won't bet unless they think it is going to be a winning bet. And they mix that in with their expectations. They see a pattern and feel that they have an edge and they know how much they’re going to risk to make a profit.
Yes a player needs to have some strong patterns in mind to look for. And when a pattern is showing, the player needs to know when it has a high probability of winning. He has to learn to think in probabilities. But he also has to get his expectations in line with how the outcomes are independent of each other and random.
He needs to learn these mental skills and be able to execute his bet without fear or hesitation or analyzing or even thinking.
What does a professional bettor think about when there is an edge present? Does he think about whether the edge is going to work or not? No, because he has learned that there is no point in analyzing or judging or building a case for or against whether that bet is going to work. That's the human component.
What he does think about is the risk. How much does he have to risk for a profit. Also how far is he going to go? When is he going to take a profit and stop betting. The typical bettor is constantly asking, "Is this going to be a winner?" And if he wins he just goes on betting as if the wins will go on forever.
The professional sees the pattern, not thinking am I going to win or lose, he puts his strategy in place, knows how much he wants to win and knows his risk reward ratio.
What people need to understand is: how believing in a random result affects our expectations. We don't want to get into a bet, knowing that there is a possibility of being disappointed or dissatisfied. The problem is that when that potential exists it can have a detrimental effect on how we perceive our information.
If I go into a bet thinking I must be right because I did all the research, I will then have a tendency to use the information to justify my thinking when I lose. I won't be able to identify a trend if I am putting in an inordinate amount of significance on the information that is telling me that I am right and ignoring the information that is telling me I am wrong.
Over all if we want to be consistent, we have to ‘cut our losses and let our profits run’. Or, we have to ‘make more on our wins than we lose on our losses’. And the problem is that if I am susceptible to being disappointed on a bet, I may get into a race expecting to do what I think it is going to do and have a tendency to distort the pattern information that causes me to hang on to my losers.
Slot Machine Example
Understand what you’re getting into. For instance, you put a quarter in a slot machine. You put your money in the machine and the pattern indicating a payoff doesn't show up. How do you feel? Betrayed? No. Why do you not feel betrayed by the machine? Because you went into it with the belief that you know that you are participating in an event that has a random outcome. And as a result, your expectation of the outcome was in perfect alignment with the event itself.
The difference between playing the slot machine and betting is that we can't play the slot machine until we have accepted the risk. We have to put the money in the machine first or otherwise we can't play. We have accepted the risk first. Then we find out if it’s going to work. We wait for a pattern to show up.
Here’s the difference with betting - and this is where people’s mental ideal of what this is all about gets messed up: the pattern shows up in the race first, then we have to put up our money. Meaning how much am I willing to risk to find out if the bet is going to be a winner. But because handicappers will evaluate and judge and analyze, they then think that they have a case for the pattern being right and they actually talk themselves out of believing that any risk even exists. And they over bet and play too many races. Many handicappers don't accept the risk because they don't want to be wrong.
You have to understand that this is not a right or wrong game. Betting and using a technical method have nothing to do with being right or wrong. It is just an odds game. That's all it is. You get an edge that says the odds are in your favor for a series of bets. And you have to take every single race with that pattern because you don't know the sequence of wins and losses. You have to be able to identify what your risk is. Know how much you are willing to spend to find out. You have to have a consistent money management plan.
You have to change how you think about this. Think. You know that there is a random outcome to these patterns. You know that it is not right or wrong. So what potential do you have to be disappointed? No more potential than you had when you put the quarter in the slot machine. You have to be able to change to that way of thinking.
You have to eliminate the potential to think that a bet is going to lead to a disappointment. And you do that by understanding that handicapping is not about being right or wrong. It is a probability game.
There are stages of development.
We start out learning these fundamental skills and learn how to think in probabilities so losing doesn't cause us emotional pain. We have to learn to take our losses and then move on, walk away. How good can a person be at predicting a horse's behavior? The methodology that we have attempts to predict that. The mathematical formulas written into in the propriety software do that for us. But it can't predict the sequence of outcomes. And finally, you have to determine what the cost of finding out is.
Paper Bets
Paper bets can be beneficial because they show the person if their mental skills are lacking or not. Winning on paper is a no pressure situation and requires very little mental skill. Real betting requires that your mental skills be intact. Therefore, paper betting is a graphic representation of the mental skills that a person needs to acquire.
Once you graduate from paper betting you can go on to betting in small amounts with no fear.
You have to learn to think about handicapping in a way that doesn't cause you to have the potential for you to think that you’re going to be disappointed or that you’re going to be betrayed. Or put you in the state of emotional pain. You need a care free state of mind. Once you shift your perspective everything changes. It’s not about being right or wrong. When you really understand that, then you go through the process of the risk of losing and then everything about your handicapping will change.
The patterns present themselves, you don't think, you bet. When the pattern presents itself there is absolutely nothing to think about. And there is no way you can know what the outcome will be.
References
Mark Douglas has written:
"Trading In The Zone"
"The Successful Trader"
An Edge means that there is a higher probability of one thing happening over another.
Both a software generated odds line and real, tote board odds are based on people's belief of the future.
Editor’s Notes:
Rewriting the article at first to me seemed like plagiarizing. However I was driven to tailor Mark Douglas's words to handicapping because I have never seen this topic addressed in depth before. Also the examples that he uses make the points that he presents self evident.
Mark Douglas also touched on a topic that I still have not unraveled. He said that a losing bet taps into other losses in our life and results in emotional pain. Loss of a loved one, a house, a pet, a job etc. All are losses that can be re-stimulated by a losing bet.
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RDSS - Racing Decision Support System™
Last edited by Ted Craven; 02-21-2011 at 07:46 AM.
Reason: Video available again!
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03-01-2009, 04:44 AM
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