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How to Manage Your Bankroll
One of the most crucial subjects for knowledgeable sports bettors is bankroll management.
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Sports betting has very little profit margins. The break-even point is 52.38% once the normal -110 vig has been taken into consideration. Because it's practically unheard of to win more than 60% of your sports wagers, the difference between winning and losing money is only a few percentage points in either direction.
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Knowing this makes bankroll management — besides actually handicapping games — possibly the most crucial ability to have.
Why its Important
Dealing with losing streaks is extremely tough, for even the most seasoned sports bettor. It’s human nature to try to “chase your losses.” This is a bad idea, and is a good way to blow through your entire bankroll quickly. Employing sound bankroll management is the easiest way to ensure you aren’t chasing your losses and you can live to fight another day.
The same can be said when you’re on a winning streak. You can feel almost invincible in those situations, which may lead to poor decision making. You can definitely increase your bet amount when you’re on a roll, just make sure you don't overplay your position.
How To
There are different approaches to sports betting. Here are a few well known examples -
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Flat Betting Strategy
The simplest and longest-lasting bankroll management method is this one. You just need to decide on your unit size and bet one unit exactly for each wager.
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Take your beginning bankroll amount and split it into equal units to decide how much to wager on each game. This will determine your unit size and the amount you wager on each game.
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When employing this method, you should occasionally examine your bankroll. If your unit count has changed significantly, you might want to think about increasing or decreasing your unit size to reflect your new bankroll.
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Percentage Strategy
The flat betting strategy and the percentage strategy are comparable. The only significant distinction is that your unit size will depend on your bankroll rather than being predetermined. The figures should start out quite similarly, but your unit size will change much more quickly than with the flat betting strategy.
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Let's use a hypothetical $1,000 beginning bankroll as an example. In both the flat bet and percentage strategies, your first wager must be $25 if you want your standard unit to be 2.5%. After this first bet, the strategies will begin to differ. Your bankroll will rise to $1,025 if you succeed with your first wager. Consequently, your subsequent bet will be $25.63, or 2.5%.
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This sports betting strategy's main benefit is that it enables you to capitalize on winning streaks. After each winning wager, you responsibly raise your stake, enabling you to record a higher return on investment throughout your upswings.
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The drawback is that it could be more difficult to get yourself out of a jam. Your wager size will shrink if your bankroll falls below where it was when you started. As a result, the timing of your winning streaks is much more crucial than it was under the flat betting strategy. This method has a little higher total risk because to the additional variation.
Confidence Strategy
In games where you feel more sure, you can raise your bet size using the confidence model. Although 1 unit should still be your regular wager, you can occasionally boost it to 2 or 3 units. It is not advised to increase your unit size above that unless you have proven you can regularly win your most confident bets.
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It's recommended to test this particular strategy before jumping in. When betting, monitor how sure you feel about each wager using a scale of 1-3 while you're tracking your bets. You can view your history for each wager size even if you start off wagering the same unit amount on each wager. Increasing your wager amount in those circumstances makes a lot of sense if your most confident plays have a noticeably better record than your less confident ones.
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You can occasionally sprinkle a half-unit on specific bets using the confidence strategy. This works well for wagers with bigger potential returns, such as parlays and moneyline underdogs.
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Kelly Criterion Strategy
Instead of giving each wager a confidence level, you try to calculate your precise winning % for each stake. After that, you would enter that figure into the calculation below to estimate precisely what portion of your bankroll you should stake:
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(bp – q) / b = f
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"b" is the multiplier of your stake that you can win with the suggested bet. When using decimal odds, b is simply equal to the odds less 1. For instance, a $10 betting at 3.00 gives a total return of $30, which includes the initial bet. Depending on the stake, the prize is a multiple of 2 or $20.
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"p" is the probability of the bet winning in decimal form. For instance, if a bet has a 45% chance of winning, the probability of the bet winning is 0.45.
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"q" is the probability of the bet losing in decimal form. Extending on the above example for "p," if a bet has a 45% chance of winning, then that same bet has a 55% chance of losing, or 0.55.
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"f" is the suggested percentage of your bankroll to stake on a proposed bet.
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On the basis of the examples in the explanation above, let's see how the formula functions. We'll state that the suggested wager has odds of 3.00, a 0.45 winning probability, and a 0.55 losing probability.
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( (2 * 0.45) - 0.55) / 2 = 0.175
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Based on this formula, you should be betting 0.175, or 17.5% of your bankroll on the proposed bet.
Best Practices
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Your bets should typically stay between 1% and 5% of your bankroll.
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Play within your bankroll. Don't overextend yourself.
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Separate your personal and sports betting finances. You should treat sports betting as a business, and the money you use should be treated like business expenses.
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Avoid desperation bets to dig yourself out of a hole.
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Adjust your bets when necessary. If your bankroll has reduced in size, reset your betting units to reflect that.
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Track your bet results, regardless of which betting strategy you employ.
