Bankroll Management, Dutching, Kelly Criterion, Variance and general staking advice
Staking Advice and Bankroll Management
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The area of bankroll or risk management is where many many aspiring bettors fall down - even those with an eye for picking a good value winner. Being skilled in this area is fundamental to successful long term betting and I'm going to outline my own methods here. First of all, many people get confused when it comes to how much they should be betting. This is simple; no more than 5% of your bankroll on any one bet and in my own opinion, 2% is enough. I bet anywhere from 0.4% to 2% of my bankroll on any given selection. Losing streaks are inevitable due to probability and if you bet too much, you will go bust. Your betting bankroll should be an amount of money you can comfortably afford to lose.
Some of you will have heard of the Kelly Formula or Kelly Criterion. This is a formula used to optimise exploitation of value in your selections. For me, the formula is far too volatile and I use a spin of it in my own staking plan.
Kelly Formula(from wiki)" F* = bp-q / b where:
f* is the fraction of the current bankroll to wager; b is the net odds received on the wager ("b to 1"); that is, you could win $b (plus the $1 wagered) for a $1 bet p is the probability of winning; q is the probability of losing, which is 1 − p "
Some of you may have wondered before why I use a scale of 1-5 units. I use the above formula on my selections and equate whatever % I get to this scale. Eg: If I come up with a calculation of 10%, this equates to a 1pt bet or 40% equates to a 4pt bet. As alluded to above, 1pt = 0.4% of my bankroll and 5pts = 2% of my bankroll. I then make a few tweaks as needs be.
If you follow the above guidelines, it should eliminate long term risk in this area and it then ultimately comes down to your ability to calculate probabilities and expected value (EV) in the odds. This is referred to as "Risk Intelligence" - the ability to estimate probabilities accurately.
Variance: Put simply in non-mathematical terms, variance is the difference between results in the short term vs your long term expectancy. It is a term often used in the volatile poker world but in sports betting - and golf betting in particular - it's very important you understand there can be big and lengthy upswings and downswings when betting such big odds. My EW golf staking strategy is put into place to combat this and decrease variance over the year. Many people (wrongly) think betting over five players in a golf tournament is detrimental but as long as you're getting value this is not the case.
Dutching
In betting, Dutching is simply combining two or more fancies into your staking plan for a particular market. This is done by splitting up your total stake in such a way that if any of your selections win, they will return the same amount. This dutching method is one I use religiously and is highly recommended for advanced bettors. Markets I particularly like dutching (and will be doing so on the blog) are the man of the match markets and winning margin. Backing a team to win by either one or two goals for example can add a lot of value to the bet and shift the odds in your favour.
Dutching example: Manchester City are away to Fulham and I fancy them to dominate. In the absence of Aguero, I strongly fancy Silva (12/1) and Tevez (8/1) to do the damage. By combining the two for say a £100 total stake in the man of the match market, you will get a return of £531.82 (should either win) by staking £59.09 on Tevez and £40.91 on Silva in a dutch bet. To work out the stakes easily for dutching, you can use a dutching calculator.
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Tweet
The area of bankroll or risk management is where many many aspiring bettors fall down - even those with an eye for picking a good value winner. Being skilled in this area is fundamental to successful long term betting and I'm going to outline my own methods here. First of all, many people get confused when it comes to how much they should be betting. This is simple; no more than 5% of your bankroll on any one bet and in my own opinion, 2% is enough. I bet anywhere from 0.4% to 2% of my bankroll on any given selection. Losing streaks are inevitable due to probability and if you bet too much, you will go bust. Your betting bankroll should be an amount of money you can comfortably afford to lose.
Some of you will have heard of the Kelly Formula or Kelly Criterion. This is a formula used to optimise exploitation of value in your selections. For me, the formula is far too volatile and I use a spin of it in my own staking plan.
Kelly Formula(from wiki)" F* = bp-q / b where:
f* is the fraction of the current bankroll to wager; b is the net odds received on the wager ("b to 1"); that is, you could win $b (plus the $1 wagered) for a $1 bet p is the probability of winning; q is the probability of losing, which is 1 − p "
Some of you may have wondered before why I use a scale of 1-5 units. I use the above formula on my selections and equate whatever % I get to this scale. Eg: If I come up with a calculation of 10%, this equates to a 1pt bet or 40% equates to a 4pt bet. As alluded to above, 1pt = 0.4% of my bankroll and 5pts = 2% of my bankroll. I then make a few tweaks as needs be.
If you follow the above guidelines, it should eliminate long term risk in this area and it then ultimately comes down to your ability to calculate probabilities and expected value (EV) in the odds. This is referred to as "Risk Intelligence" - the ability to estimate probabilities accurately.
Variance: Put simply in non-mathematical terms, variance is the difference between results in the short term vs your long term expectancy. It is a term often used in the volatile poker world but in sports betting - and golf betting in particular - it's very important you understand there can be big and lengthy upswings and downswings when betting such big odds. My EW golf staking strategy is put into place to combat this and decrease variance over the year. Many people (wrongly) think betting over five players in a golf tournament is detrimental but as long as you're getting value this is not the case.
Dutching
In betting, Dutching is simply combining two or more fancies into your staking plan for a particular market. This is done by splitting up your total stake in such a way that if any of your selections win, they will return the same amount. This dutching method is one I use religiously and is highly recommended for advanced bettors. Markets I particularly like dutching (and will be doing so on the blog) are the man of the match markets and winning margin. Backing a team to win by either one or two goals for example can add a lot of value to the bet and shift the odds in your favour.
Dutching example: Manchester City are away to Fulham and I fancy them to dominate. In the absence of Aguero, I strongly fancy Silva (12/1) and Tevez (8/1) to do the damage. By combining the two for say a £100 total stake in the man of the match market, you will get a return of £531.82 (should either win) by staking £59.09 on Tevez and £40.91 on Silva in a dutch bet. To work out the stakes easily for dutching, you can use a dutching calculator.
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