Finding the right events to bet on is one challenge. Some bettors rely on their gut feeling, while others make technical predictions based on athlete’s strategies, while others adopt a purely statistical approach. Whatever your strategy of choosing the right bets is, you will still need to decide how much money to bet for each of your bets. This is where betting bankroll management comes into play. There are several common strategies for managing your bankroll, which is often employed by professional bettors, in fact, these strategies are what separate the pros from the amateurs. This article will help you decide how much to bet to keep you making a profit.
Table of Contents
- Best Betting Sites We Recommend for Sports Betting in 2020
- What is your betting bankroll?
- Why money management is important for your success?
- How much should I bet on each bet?
- Taking Odds into Consideration when Making Bets
- Advanced Bankroll Strategies
- How Much Should I Bet?
- How much money do you need to start sports betting?
- How to manage your first £100 bankroll
- 5 tips to help you keep a clear head when betting!
- Bankroll Management FAQs
- ThePuntersPage Final Say
What is your betting bankroll?
Your betting bankroll is the initial amount of money you wish to use for betting. It is the amount of money you are willing to risk and invest. Having a bankroll will help you bet in a consistent and logical way. It will help you analyse your betting strategy and learn from your betting mistakes. Having a bankroll instead of single bets or deposits will make you think about the long term instead of the short term. And the long term is where the value lies. A professional sports bettor knows he can take a loss, since his bankroll is big enough, and he has not bet the whole thing. He also knows that in the long run, he will win more money than he loses, as long as he has the correct betting strategy.
Why money management is important for your success?
Money management is a key factor in becoming a professional bettor. Managing your bankroll wisely will make sure you do not bet everything on a single event. It means you will have money to spare in order to make up for losses. Good management sets professional bettors aside from professionals.
Casual bettors usually make single bets, usually as a one-off, without any long-term strategy or goal. They see a match they want to bet on, make a deposit, and place their bet. Usually the bet for the same or similar amount as their deposit. If they win, they will either withdraw immediately or bet again until they lose.
Professional bettors have a bankroll. They use this to invest in different events, using a betting strategy. After they have made several wins, they withdraw their profits, leaving enough money in their bankroll for future investments. This is how they ultimately beat the bookies.
How much should I bet on each bet?
There are two basic strategies in choosing how much of your bankroll to risk on each bet. Most professional bettors use either a constant percentage or units. Each has its own advantage.
A Constant Percentage
Many professional bettors will consistently bet a certain percentage of their bankroll. A good percentage could be anywhere between 1 and 3 percent of your total bankroll. This has an obvious advantage. As your bankroll grows, your bets will also grow in size organically. If you lose, you can make smaller bets until you resume your win streak. This is one easy way to keep from going broke.
Other bettors simply bet in units. This means you will have more or less the same amount for each bet. Best is to divide your bankroll in 50 or 100 units. If you have a £1,000 bankroll, this means you will have units of £10 or £20 per bet. Betting small bets instead of giant ones might mean it could take a while before you start making a worthwhile profit.However, remember, you came here to make money, not just to have a bit of fun. Focus on the long term.
Don’t be too flexible
Both strategies (units or percentages) allow for a bit of flexibility of course, but do not be too flexible with them. You can choose to bet double or triple units on an event, or choose a higher percentage. However, we recommend not using more than three times your normal unit or percentage for any bet.A systematic approach pays off in the long run and we recommend changing your methods only after careful analysis.
Taking Odds into Consideration when Making Bets
While a systematic approach to betting size is key, your bet size should ultimately depend on at least three things: your bankroll, the odds and the value. Of course, if you see odds with very good value, you can consider betting a bit higher, especially if you are on a win streak.
Advanced Bankroll Strategies
There are several more advanced bankroll strategies, which can give you a good indication of how much you should bet in any situation. These depend on the value of the bet and your win streak. The most scientific of these is the Kelly Criterion, while Level Staking and the Fibonacci Method are also very popular. We will discuss each of these in detail
The Kelly Criterion
The Kelly Criterion is one of the most popular methods. It was proposed by J. L. Kelly, Jr, a researcher at Bell Labs, in 1956. It is a mathematical formula that will give you an indication of how much you should bet, taking into account the probability of something happening versus the odds offered on it. The theory proposes that you should bet a higher percentage of your bankroll according to value.
In its most basic form, the Kelly Criterion looks like this:
- Multiply the chance to win by 2
- Subtract 1
- The result is your optimal wager size (relative to your total bankroll)
- If a bet has 70% chance to win, it has 0.70 probability.
- Multiply 0.70 by 2 and you have 1.40.
- Subtract 1 from 1.4 and you have 0.4, or 40% of your total available funds as your optimal wager.
Of course, you have to take the real odds of something happening versus the bookies’ odds into account.
The Kelly Criterion offers the following formula for simple bets with two outcomes:
f*= ((p(b+1)) – 1)/b
- f*is fraction of your bankroll you should bet
- b is the net odds you can get for your wager, expressed in decimals (if the odds are 1.3, the net odds are 0.3)
- p is the probability of winning (this is your estimate when betting on sports)
An example of the Kelly Criterion:
- A sportsbook offers 1 to 1 odds (2.0) on a bet: b = 1
- You estimate the odds of your outcome at 60%: p = 0.60
- Fill that into the formula
- f* is then ((0.60(1+1)) – 1)/1 = 0.20 In this example, you should bet 20% of your bankroll.
Do not bet on bets with no (or negative) value
If you make the calculation with a negative value, the calculation will give you a negative amount and recommend that you do not bet.
It is up to you to find that value!
The Kelly Criterion method has its critics, yet has still stood the test of time. Of course, a lot depends on your assessment of value. Bookies are constantly looking to eliminate value by offering accurate odds as possible. Of course, there are many factors that can influence these odds, such as money coming in that moves the lines, overestimation of certain athletes, popularity, injuries, and more. Still, you should assume that bookies are no fools and know why they are publishing certain odds. It is up to you to outsmart them.
Different Kinds Of Kelly
There are several kinds of Kelly Criterion; some are more bullish, while some are more bearish.
The Full Kelly
The Full Kelly is the method described above. If you follow it consistently, it can be risky. If you estimate the value very high, it can recommend that you bet up to 50% of your bankroll. Still, if you are correct, a good win streak can have you winning big and fast. It all depends on your accuracy of estimating value.
For example, with odds at 2.40, your bankroll at £100and your (estimated) overlay at 20%, the Full Kelly recommends that you bet 14.3% of your bankroll, or £14.3.
The Fractional Kelly, Half Kelly or Quarter Kelly
If you want to be more conservative in your approach, you can choose the Fractional Kelly. Here, you can make the Kelly Calculation and use a fraction of it instead of the Full Kelly. Use 50%, 33% or 25% of the Full Kelly, or any percentage with which you are comfortable. In the end, this can be a more advantageous strategy, since you will risk less of your bankroll.
The Constant Kelly
The Constant Kelly works almost the same as the Full Kelly method. However, you need to wager a percentage of a fixed amount, rather than your total bankroll. If you have regular funds you wish to bet with, rather than a fixed bankroll, this is one way to manage your funds.
For example, instead of betting 14.3% of your bankroll, you bet 14.3% of a fixed amount.
Level staking is a simpler form of bankroll management. In this strategy, you simply bet a fixed percentage of your bankroll. If you have a continued win streak, you slowly increase the percentage. If you run into a losing streak, you decrease your stake. This makes sure you are always in control of how much you are betting.
While this method is less advanced than the above, it is simple and easy to understand. It is more a way to keep mental discipline and stay sharp, than a scientific method like the Kelly Criterion.
This method can easily be used in combination with a Fractional Kelly, however, which is what we would recommend. You can start with a Quarter Kelly and slowly move your way up to a Half Kelly or even a Full Kelly.
The Fibonacci Method
The Fibonacci Method is a method of bankroll management that is based on the Fibonacci sequence that was devised the 12th century by a genius mathematician of the same name. A Fibonacci sequence begins with the numbers 1 and 2. Each number is the sum of the previous two numbers.
The Fibonacci Sequence:
1, 2, 3, 5, 8, 13, 21, 34,…
Calculating the sequence and using it to bet is easy. Starting with 1 as your bet size, you move to the next step every time you win. Every time you lose, you move down two steps.
- Your first bet is £10.
- You win your bet.
- Your next bet is £20.
- You win your bet
- Your next bet is £30
- You win your bet
- Your next bet is £50
- You lose your bet
- Your next bet is £20 again.
This can be a risky betting strategy, especially since it does not take the odds or value into account. However, it can be a very dynamic way to build your bankroll, especially if you are on a significant win streak. If you want to take less risk, you can combine this with the Fractional Kelly. For example, start with 10% of a Full Kelly, move to 20%, to 30%, to 50% and so on.
How Much Should I Bet?
Choosing how much to bet depends on a lot of things. Choosing how much to spend on your bankroll means you should reflect on several important questions, such as:
How much experience do you have in betting?
If you are an experienced bettor, you will of course have a bigger bankroll than a beginner will. Professional gamblers have bankrolls that are upwards of £50,000. Of course, we recommend that you start small.
How much money can you spare?
How much money do you earn, and how much money can you miss? When starting a bankroll, you need to make sure that you are not gambling money you cannot afford to lose. Betting money you need to pay your rent or bills is generally a bad idea, especially for beginners. Bet a realistic amount you can afford to miss.
How much sports knowledge do you have?
How well do you really know your sport? Are you a sports fan or a sports analyst? Can you objectively predict what will happen in an event? Can you do it more accurately than the bookies? Make sure you know your sport well.
Make sure you have these questions answered before you commit a huge amount of your salary!
How much money do you need to start sports betting?
In general, a good starting bankroll for sports betting could be £100. £100 is a nice, round number, which you can easily divide into units or percentages. You can see it as a percentage of your monthly salary. £100 would be about 5% of your monthly salary after taxes. If you earn more, you can start a bit higher, of course. In general, most people can miss between 5% or 10% of their monthly salary, without going broke, or living uncomfortably.
How to manage your first £100 bankroll
Now that you have read our tips, it is time to choose a bookie and make your first deposit as a professional bettor. If you have already made and lost a few bets, it does not matter. Start with these five steps.
- Start from zero and begin your bankroll management from scratch.
- Sometimes it can pay to switch bookies; a fresh start on a new site can help you bet rationally. Our bookie reviews can help you choose.
- Make your first deposit and divide into units.
- If you want to be conservative, place your bets according to the Kelly Criterion. Use 20% of the Full Criterion.
- As your betting skill improves, you can increase to Half or Full Kelly.
While £100 may seem small, it can be a great starting point to test your betting strategy. You can make the bets as small as you want. Remember, if you can make a consistent return with a £100 bankroll, you can do the same for £10,000 or £100,000 bankroll.
Keep track of your progress and stay smart. Congratulations, you have just taken your first steps to become a professional gambler!
5 tips to help you keep a clear head when betting!
Here are our top 5 tips that will help you keep a clear head while betting:
1. Keep a journal
If you want to know your progress as a bettor, you will have to keep track of all of your bets. This is especially important when you bet at more than one bookie. Keep an accurate journal of all of your bets. This will help you in the long run. Use an excel file to keep an overview. It will also be much less messy than a written document.
2. Write things down
When you analyse any sports event, you should think of the reasons why the bookies have the odds wrong. Instead of doing this all in your head, write these things down. Seeing things on paper makes them easier to understand and criticize. In this case, we recommend using pen and paper, since this is generally more conductive to clear thinking and less distracting than a computer (just think of how many distractions are lurking on your laptop or mobile phone).
3. Analyse your performance
At regular intervals, for example every month or every ten bets you place, make an analysis of your performance. See how well you are doing, are you winning more than you lose? Are your analysis of sporting events correct? Should you adjust your bet level?
4. Stay away from alcohol and drugs when betting
This is obvious. You should be sober, well rested and healthy when you place any bet. Betting when you are drunk or high is probably one of the stupidest ways to go broke fast.
5. Don’t bet emotionally
Ah, the thrill of winning and the despair of losing. Ultimately, these emotions can take you on a reeling roller coaster ride of giant wins and huge losses. Unfortunately, the end if this ride is usually the end of your bankroll. Follow a sound bankroll management strategy and analyse the odds and each event thoroughly.
Bankroll Management FAQs
🍒 What is Value in betting?
Value is the difference between your estimation of a game outcome or event, versus what the bookies’ odds predict. If you think a bet is worth placing, it usually means you estimate its probability higher than the bookies do.
💲 What is Overlay in betting?
Overlay is the difference in percentages of how likely you estimate an event, versus what the bookies estimate.It is a mathematical way to express value. For example, if the odds given by the bookie are 1.4, that makes a 60% chance, according to the bookies.
- If you see the probability at 70%, that gives you an overlay of 10%, in which case it could be smart to bet.
- If you see the probability at 50%, that gives you an overlay of -10%, in which case you should not bet.
🎲 What is a bankroll builder?
A bankroll builder is a specific bet or combination of bets that tipsters think will likely help you win big. It is usually a combination of two or more bets that will likely help you score. Some betting sites also advertise some of their bets as bank builders, often in combination with a promotion, or enhanced odds. Be aware of these and use them to your advantage, while still maintaining a sound betting strategy.
ThePuntersPage Final Say
While using a bankroll management strategy may not be as thrilling as placing wild and fun bets, it is probably the only way to win long term. While mathematical models such as the Kelly Criterion may seem complicated, the calculation is very easy to do. Most high school students should be capable of it. If you follow the tips and strategies discussed on the page, you have a good chance of becoming a professional sports bettor.
Stay disciplined, stay focussed, stay sharp and remember: luck only exists in the short term!