The easiest way to go bust is to mismanage your bankroll.
Avoid the pitfalls by following this advice.
What is a Bankroll?
In sports betting, your bankroll is a specific amount of money that you set aside for the sole purpose of betting. Do not set aside more money than you are comfortable with losing. Bankrolls vary in size; an experienced bettor may have a bankroll of $10,000, while someone new to sports betting may have a bankroll of $100. You should not be stressing over this money. It should be a set amount that you are comfortable losing if everything were to go wrong, which can happen, but is unlikely. If you cannot afford to lose the amount you decide on, pick a lower amount.
How much should you bet on each game? There are multiple systems used to determine your betting style and amount, each of which has its advantages and disadvantages.
Flat Betting Model
Flat betting may be the easiest bankroll management strategy to comprehend. With flat betting, you are betting the same amount on each of your bets, regardless of the fluctuation of your bankroll. Let’s say your bankroll is $1,000, and you decide to set your flat bet at $25. Now, every single bet you make will be for $25. In a flat betting system, you do not change the amounts of your bet.
The only decision you must make is to choose the “to win” method, or the “to risk” method. For example, if a bet is -110, do you want to risk $25 to win $22.73?
Or do you want to risk $27.50 to win $25? Once you choose your method, you should stick to it for all bets. The advantage of the flat betting system is that it protects you from chasing losses. Many bettors often get themselves into trouble by betting larger amounts during a bad streak in order to try to "win it all back".
Advantage: Since this system prevents you from increasing your bet size, it protects you from larger losses.
Disadvantage: You are betting the same amount of money on games where you have different confidence levels.
Using the percentage model, you would pick a designated percentage of your bankroll to place on each wager. This percentage will be risked on every bet you make. For example, you decide to make 2% your standard bet size. If your bankroll is $500, your bet size will be $10 (2% * $500). Remember, your bankroll will rise and fall with every bet you make, so the actual dollar figure of your bet will be in constant flux. If you are winning many of your bets, your 2% bet can go from $10 per bet to $15 per bet. Conversely, if you go on a cold streak and your bankroll falls to $300, your 2% is now represented at $6.
Advantage: This system prevents the bettor from going bust and allows for the bettor to scale a bit better than a Flat Betting model.
Disadvantage: As your bankroll decreases, it becomes harder for you to dig out of a big hole.
Confidence Level Model
The confidence level model allows the bettor to change their bet size based on their confidence in the bet. It only makes sense that you would put more money on a bet where you perceive yourself to have a greater edge.
As an aside, we would strongly urge you to track all of your bets on the betstamp app. By tracking your plays will you be able to determine if your more confident bets are in fact winning at a greater percentage compared to your less confident bets. If you find that your more confident bets continue to lose, we would suggest switching away from the confidence level model.
Advantage: Easier to scale as you are placing more money on games with bigger edges.
Disadvantage: Some people are actually not as successful when they are more confident in a pick and this could lead to some larger swings.
Kelly Criterion Model
The Kelly Criterion Model should only be used by advanced bettors. This model requires the bettor to have access to probabilities. You would use these probabilities, and plug them into the following formula to determine the exact percentage of your bankroll that you should risk on the bet.
(Decimal odds of your wager * win probability – loss probability) / decimal odds of your wager = suggested wager percentage
Let’s use an example. If you feel that you have a 50% chance to win on a +150 underdog, the formula would look like this:
Based on your probability, the Kelly criterion model is suggesting that 16.67% of your bankroll is the optimal amount to be wagered on this play.
It is very important that you have the utmost confidence in your probabilities. If they are off, your bankroll is sure to take a major hit. Many of the professional sports bettors use what is referred to as “half” or “quarter” Kelly criterion model, where you would simply use half or a quarter of the suggested bankroll wager to avoid drastic swings.
Advantage: The truest form of staking. This formula is optimized to make you the most money in the long run.
Disadvantage: It can often be labor intensive to calculate your bet sizes and sometimes you don't have the time to do so.
Tracking Your Bets
Regardless of which model you use to manage your bankroll, tracking your bets is an absolute must. It allows you to learn from your betting history, and gives you the opportunity to adapt in an effort to maximize future earnings. We would recommend comparing your performance based on sport and wager type. Maybe you are killing it in basketball bets, but your football bets are hitting at a subpar clip. Or maybe your moneyline wagers aren't going well, but your point spreads bets are very profitable. Knowledge is power; evaluate your performance and make the proper adjustments.
The betstamp app is the perfect tool to shop for the best price in the market, and to track every play you make. No need to waste your time creating a spreadsheet. Betstamp does all of the grunt work for you.