"There's not a man alive that made a living at 4 to 5". Always remember these words. Generally, favorites win about 32% of the races. Therefore, you should expect to win about one-third of the races you play. If you play nine races with $2 to win, win three of them but all three of those are even-money favorites, you would lose $6 per day (bet $18 minus $12 winnings = $6 net loss).
Money management is an important factor in making sure your day at the track is enjoyable.
When you like the favorite but his odds are too low, you have several options. Find the most logical choices to be runner-up and play some exactas. If you like some live longshots, you could play three or four different exactas. If it is a small field and your second choice is 5-1 or less, you may have to take a shot with just one exacta. A $2 exacta costs the same as a $2 win bet, but there is greater potential in the return with the exacta.
Another option is to play a trifecta. You should not wheel the favorite with "all" in the trifecta unless you have some live longshots. You can do a trifecta key with two or three horses even if none of those horses are over 10-1 and still make a profit. A trifecta part wheel is recommended if two or more of the horses you are using are 5-1 or less along with a short priced horse.
If you believe the favorite is beatable in this race, find the most logical horse to spring the upset. A favorite may be vulnerable at a new distance, a switch in the surface from dirt to turf, a sloppy or muddy track, or a class change. There have been many horses that could win often over their home track but couldn't run a step when shipped to another track.
As a general guideline, bet win only (or exacta) if the odds of the horse you like are 5-2 or lower. From 3-1 to 9-1, bet win and place. You can bet across the board if 10-1 or higher. Be cautious if there is a strong favorite in the race because even though your horse's odds may be high, such a favorite can create a "minus pool" forcing much lower payouts than normal for other top three finishers.
Look at the potential return on investment. If some of the horses you like are double-digit odds (10-1 or higher), you should consider an exacta box. You can box four horses in a $1 exacta for only $12 or box 5 horses for only $20. Look at the "Probable Payoffs" for the exactas that you are considering before placing your wager.
Remember, longshots are longshots for a reason. They are usually (but not all the time) outclassed in this race. Many times you can find a horse that had an "excuse" for running poorly in a previous race. Check to see if a horse is dropping in class, bled last time out or had a troubled trip, getting first time Lasix today, etc.