Risk management is an essential aspect of value betting, and it can make a significant difference in your long-term success. If you stake too much, you risk losing your entire bankroll, but if you stake too little, you may not see the growth you desire. By following these principles, you can effectively manage your bankroll and increase your chances of success in value betting.
Bankroll management in value betting
The importance of bankroll management
Effective bankroll management is a crucial aspect of successful value betting. To be a successful sports bettor, you need to have a strong understanding of the sports betting world and a solid bankroll management system in place. Proper money management is crucial for success in sports betting, as it can mean the difference between winning big and constantly losing. The two most important benefits to effective bankroll management is:
- Protecting against the possibility of losing your entire bankroll
- Maximizing your winnings
How much to start with
The first step in managing your betting bankroll is determining how much money you want to allocate for this purpose. It’s important to make rational decisions when it comes to betting money, and one way to do this is by keeping your betting funds separate from your regular finances.
But how much should you include in your bankroll? Start with an amount that you can afford to lose without causing financial discomfort. Consider your current financial situation and choose a number that makes sense for you. By following these principles, you can effectively manage your value betting bankroll and increase your chances of being profitable.
How much to stake at value bets
Once you have determined your total value betting bankroll, it’s important to consider how much you should stake on each bet. For example, if you have a bankroll of €1000, your goal should be to gradually increase your profits through a series of bets. To do this, you’ll need to divide your bankroll into smaller stakes. Keep in mind that you should be prepared to lose a few bets before you start seeing profits. As a general rule, conservative sports bettors should aim for stakes that never exceed 1% of their total bankroll, while average bettors should aim for 2%.
This is probably the most important topic there is. Many sports bettors go broke because they fail to manage risk.
One option is to use a fixed staking plan, where you always bet the same amount on each value bet. This can be a simple and straightforward approach, but it’s important to be aware that you’ll need a larger bankroll to support it, as you’ll be risking the same amount on each bet regardless of the size of the expected value you’re getting.
The percentage staking plan is similar to the fixed staking plan in that it involves betting a consistent amount on each bet. The difference is that, rather than betting the same amount at the start of your bankroll, it involves betting a percentage of your current bankroll.
For example: if your bankroll is €1,000 and you have decided to go for 1%, your initial stake would be €10. However, this amount can vary daily depending on changes in your bankroll. If your bankroll increases to €1,200, your wager would increase to €12, but if it decreases to €700, your wager would decrease to €7.
An advantage of the percentage staking plan is that it allows you to take advantage of a winning streak by betting larger amounts, which can potentially lead to more winnings over a longer period of time. However, if you experience losing streaks, it may take longer to recover from those losses due to the smaller stakes.
The Kelly Criterion
If you’re looking to boost your success in sports betting, one strategy you might want to consider is adjusting the size of your bets based on the expected value (EV).
The Kelly Criterion is a method of bankroll management that is designed to maximize the efficiency of bankroll growth. It is based on the idea of betting a certain percentage of your bankroll based on EV and the probability of winning.
Staking % of bankroll = (odds * win probability – loss probability) / odds
While this can be a theoretically optimal approach, it’s not always practical for most bettors due to the potentially large stakes it can require.
One solution to this problem is to use fractional Kelly staking, which involves betting a smaller percentage of your bankroll than the full Kelly recommendation. This can reduce the risk of large losses while still allowing for the potential for significant gains.
Overall, finding an effective staking method is an important part of any sports betting strategy. By carefully considering your options and choosing a method that aligns with your goals and risk tolerance, you can increase your chances of success in the long run.