Money management is an important factor if you intend to be a successful sports bettor. The recipe for long term winning is known to be value betting plus money management. Since we already looked into the first part, now is a good time to learn more about money management and how much money you should risk per bet.
The mistake that most players make is that they risk way too much money when they bet on an outcome. This is what keeps them from winning in the long term. Some players tilt and bet everything they have after a couple of losses. The worst case is when players bet money that they can’t afford to lose – money that was supposed to be spent on rent and food. You absolutely never want to be in any of these situations. The aim is to be a smart and winning player, which is absolutely possible with the right strategy. Money management is what separates the long-term winners from the long-term losers.
Here’s how you can implement money management.
Create a bankroll
To avoid these mistakes, you need to put aside a bankroll. An amount that you can afford to lose without much impact on your daily life. If you have 10,000 dollars or euros in your savings account, maybe create a bankroll of 2,000. The exact amount is not important, because it will vary from player to player. Just put aside a sensible amount that you can afford to lose, yet an amount that allows you to bet with the best bookmakers.
Even a small bankroll can turn big if you are patient and skillful. If you only have 100 dollars to put aside for betting, then don’t feel bored or disappointed – it can easily turn into thousands if you’re good at what you do.
The key to building up a large bankroll is to avoid cashing out the first year or two. Let it grow, and when it reaches a significant size, you can begin to consider cashing out.
When you have set aside a bankroll, it is time to find out how much you should place per bet.
You have to decide whether you want to be an aggressive or conservative player. Money management should be practiced no matter what type you think you are, but within reason, you can choose to be aggressive.
Usually, a bet sizing of 4% or more is quite aggressive. Only ten losses in a row (it can happen, even for pro bettors) and you’ve lost 40% of your bankroll. On the other hand, ten wins in a row and you’re up by a lot.
Placing 3% of your bankroll on each bet is semi-aggressive. 1-2% is the Goldilocks zone where you have proper risk management and still have the opportunity to grow your bankroll quite significantly. Conservative bettors, or simply bettors with huge bankrolls, might only want to risk 0.5% of their bankroll (or even less) on each wager.
Aggressive players will probably want to be around 3-4%. Normal players will want to bet in the range of 1-3%. Conservative players will want to bet less than 1% of the bankroll per bet.
We should also mention that the size of your bankroll plays a part. If you have a large bankroll, such as 100,000 dollars or more, you should naturally be more conservative in your approach. If you have a small bankroll, such as 200 dollars, it makes sense to be more aggressive as you don’t stand to lose much anyways.
But in any case, we never recommend you to bet over 5% of your bankroll per bet. You can stretch to 5% on the biggest value bets, but we don’t recommend you to cross the line of five. That is simply too risky in the long term. In general, we recommend betting between 1-2% of your bankroll on each of your bets.
The ideal bet sizing
When you reach a serious bankroll and you want to maximize profits as well as defending yourself against the variance, you will find that 1% or 2% is the ideal bet sizing.
Our experience with money management has shown us that a bet sizing of 1.5% works really well. It’s enough to create a serious profit long term, as long as you’re good at spotting value, or if you have access to the best tipsters. At the same time, it is really difficult to go broke, or even lose half the bankroll, with an average wager of 1.5%. It simply makes sense for most serious players.
Flat betting vs units
Some players operate with flat betting. That means you bet the same amount (or rather, the same percentage of your bankroll) on every bet, no matter how much value there is and how high the odds are. This will limit your variance, but it will not allow you to take full advantage of your greatest value spots.
You can also bet units. One unit can be 1% of your bankroll, two units can be 2%, and so on. You can make the system yourself. It brings more variance (imagine losing a couple of high unit bets in a row!) but it also gives you the opportunity to make the most of the matchups where you find huge value.
Despite everything, we are still major supporters of flat betting, as it makes everything easier – especially for newer players. And for experienced players, flat betting will bring less variance which is highly important.
But generally speaking, it depends on your personality. Some players simply prefer flat betting, while others prefer unit betting. There is no right or wrong here. Both have been proven to work, as long as you’re also betting the right spots.
Constantly update your bankroll
We always recommend you keep track of your bets. But how often should you check up on your bankroll’s size, and how often should you readjust the stakes? Ideally, do it as often as you can. If you can adjust after every single bet, that would be the best in an ideal world, but since most bettors have a lot of action out (for example 50 different bets over a weekend), that is not realistic.
So instead, you can adjust the bet sizing after every 50 bets or so. That will be sufficient. For example, if your bankroll starts out at 100 dollars, the bet sizing will be 1.5 dollars (if you bet 1.5%). After the first week where you have placed around 50 bets, your bankroll has increased to 120 dollars, so now you will start betting 1.8 dollars per wager.
In other words, you work with the same percentage all the time, but as your bankroll changes in size, your staking size will also change. This change will be quite moderate most of the time, but it is important if you want to create growth. It’s like when you have savings in the bank, and you’ll earn interest from the interest in the long run. Eventually, it will amount to a lot, and this concept is even stronger in sports betting – especially if you are good at finding value.
Any questions regarding money management? Feel free to write below.