Bankrolls & Staking
The single most important point that we must always bear in mind is that everybody's 'end destination' is to go broke without having a profitable method of selecting bets.
Varying bet sizes or increasing stakes after a loser might work for a while but in the very long run, if your bets don't show a profit, whatever staking method you use, it won't get you out of jail.
If there was a 'world beating' staking method, we could all by-pass the process of trying to bet when the odds are in our favour. All we would need to do is bet on 'red' or 'black' on a roulette wheel, vary or increase stakes until a winner is found and the job would be sorted.
Were it possible to do this, I could have saved myself over 40 years of hassle in trying to find bets where the odds more than
cover the risk!
Staking methods that recommend increasing stakes until a winner is found may work for some considerable time, possible a significant period of time, but the dreaded long losing run will come along and wipe out all previous gains. You may win small on a regular basis before the terminal losing run occurs, wiping out all previous gains.
Laying often appears like an easy route to profits, especially if laying outsiders. Again, a similar scenario awaits. You will win small amounts often but the losses when things go wrong will eventually remove all profits unless you are genuinely laying outcomes at odds that are shorter than the real risk.
❶ It is impossible to be a long-term winner unless you are betting when the odds more than cover the risk.
With regards to bankroll sizes, we all want to use the smallest 'safe bank' possible as this will maximise our return on capital (ROC).
But what is the smallest safe bank? Risk levels are relative to the odds we bet at. Should you only bet on events that are odds on, you will need a much smaller bank than someone who bets at odds of 20/1.
When betting at odds of 3.00, assuming a break-even scenario is the end destination, what are the likely losing runs that will occur?
Using random numbers to generate results, I have looked at 25 sequences of 2,000 bets. Here are the losing runs in each of
the 2,000 bet sequences:
Varying bet sizes or increasing stakes after a loser might work for a while but in the very long run, if your bets don't show a profit, whatever staking method you use, it won't get you out of jail.
If there was a 'world beating' staking method, we could all by-pass the process of trying to bet when the odds are in our favour. All we would need to do is bet on 'red' or 'black' on a roulette wheel, vary or increase stakes until a winner is found and the job would be sorted.
Were it possible to do this, I could have saved myself over 40 years of hassle in trying to find bets where the odds more than
cover the risk!
Staking methods that recommend increasing stakes until a winner is found may work for some considerable time, possible a significant period of time, but the dreaded long losing run will come along and wipe out all previous gains. You may win small on a regular basis before the terminal losing run occurs, wiping out all previous gains.
Laying often appears like an easy route to profits, especially if laying outsiders. Again, a similar scenario awaits. You will win small amounts often but the losses when things go wrong will eventually remove all profits unless you are genuinely laying outcomes at odds that are shorter than the real risk.
❶ It is impossible to be a long-term winner unless you are betting when the odds more than cover the risk.
With regards to bankroll sizes, we all want to use the smallest 'safe bank' possible as this will maximise our return on capital (ROC).
But what is the smallest safe bank? Risk levels are relative to the odds we bet at. Should you only bet on events that are odds on, you will need a much smaller bank than someone who bets at odds of 20/1.
When betting at odds of 3.00, assuming a break-even scenario is the end destination, what are the likely losing runs that will occur?
Using random numbers to generate results, I have looked at 25 sequences of 2,000 bets. Here are the losing runs in each of
the 2,000 bet sequences:
The worst losing run, when betting at 3.00, was 28 (in sequence number 10).
The shortest losing run was 13 (sequence 7 and sequence 15).
Compare that to the losing runs when betting at 4.00:
The shortest losing run was 13 (sequence 7 and sequence 15).
Compare that to the losing runs when betting at 4.00:
The worst losing run was 34 (sequence 13). The shortest losing run was 17 (sequence 9).
The numbers clearly show there is a direct link between odds bet at and losing runs. The higher the odds, the longer the losing runs.
There are a couple of points I want to discuss in more detail in connection with the number shown above.
A bankroll must be able to deal with the worst losing runs we are likely to face. For various reasons, we all think we are exempt from 'normal rules'. Losing runs are things that happen to other people, not to us. Losing runs happen to everyone regardless of whether you are a long-term winner or whether you are a long-term loser.
Our ability to deal with losing runs will play a significant role in whether we are in the betting game for the long haul or whether betting will be a passing phase in our life. When the going gets tough, many people will be forced to quit because they under-estimated risk levels in the first place!
Betting services will probably be quick to tell you that winning money is easy. They feel compelled to do that or else you won't subscribe; you will probably subscribe to a service that is telling you what you want to hear. That's how humannature works. The underlying problem is that no one should be telling you winning money is easy.
Even when betting with the odds in your favour, avoiding the pitfalls and banana-skins associated with bankroll management and staking, still poses a huge challenge to everyone.
Some people's emotions will get in a tailspin at the thought of backing ten losers running, whilst others won't bat an eyelid. This is why I purposely don't tell other people what they should do. I prefer to provide you with the evidence and let you make your own mind up depending on the risk levels you feel comfortable with taking.
As a general rule, I strongly believe that most people under-estimate the size of the bankroll they need. This isn't necessarily because they start out with the wrong size of bankroll, it is because many people get cold feet if they lose half of the starting bank.
In effective, this means they only had a bankroll that was half the size they thought they'd got in the first place. Indirectly, they have been taking risks relative to a different size of bankroll than the one they actually started with!
❷ If you are likely to quit should you lose half of your bankroll, you will be taking more than double the risks you thought you were in the outset.
As a general rule, bettors who are poorly funded are more likely to take greater risks as they will want to turn their 'small pot' into a 'big pot' as quickly as they can. Increasing a £50 pot into £100 over six months probably won't feel as though it's worth the time and effort. A target of turning £50 into £500 would be their aim.
I don't have a problem with anyone choosing to take higher risks as long as they understand those risks from the outset, but sadly, many people don't.
There is a further potential problem waiting down the line for the 'risk takers'. Should they get lucky early on and achieve their ambitious aim, the urge to 'keep pushing' will eventually lead them to push to a point where the inevitable will happen. No, you don't need to be rich or well off to make betting pay, but you must have realistic expectations with regards to what you can achieve. Push things too far and you'll almost certainly come unstuck.
Whilst no one will win in the long run if they're not betting (or laying) with the odds in their favour, even when doing so winning isn't inevitable. A sensible and appropriate approach to bankroll management and staking is necessary. i have to be perfectly honest and say that I give 99% of my attention to finding 'value bets' and 1% of my attention to bankrolls and staking. This is because I made my mind up a very long time ago as to what was right for me. It works and I feel no need to change it.
I don't stake amounts that take me our of my comfort zone. I have a bankroll that is far greater than I will ever need. The downside is that my ROC would probably look quite poor as I'm not a 'bankroll squeezer'. I may have made more money had I staked more aggressively but I can live with that.
Losing runs cause me next to no stress and that's the way I like it to be. If I get stressed, I am more likely to make poorer decisions with my bet selection processes. I can't afford to let that happen. My livelihood depends on making good decisions!
❸ Do your homework, decide on a bankroll and staking method that suits you and your temperament, then stick to it.
Mike Lindley
Copyright Winabobatoo 2020
The numbers clearly show there is a direct link between odds bet at and losing runs. The higher the odds, the longer the losing runs.
There are a couple of points I want to discuss in more detail in connection with the number shown above.
A bankroll must be able to deal with the worst losing runs we are likely to face. For various reasons, we all think we are exempt from 'normal rules'. Losing runs are things that happen to other people, not to us. Losing runs happen to everyone regardless of whether you are a long-term winner or whether you are a long-term loser.
Our ability to deal with losing runs will play a significant role in whether we are in the betting game for the long haul or whether betting will be a passing phase in our life. When the going gets tough, many people will be forced to quit because they under-estimated risk levels in the first place!
Betting services will probably be quick to tell you that winning money is easy. They feel compelled to do that or else you won't subscribe; you will probably subscribe to a service that is telling you what you want to hear. That's how humannature works. The underlying problem is that no one should be telling you winning money is easy.
Even when betting with the odds in your favour, avoiding the pitfalls and banana-skins associated with bankroll management and staking, still poses a huge challenge to everyone.
Some people's emotions will get in a tailspin at the thought of backing ten losers running, whilst others won't bat an eyelid. This is why I purposely don't tell other people what they should do. I prefer to provide you with the evidence and let you make your own mind up depending on the risk levels you feel comfortable with taking.
As a general rule, I strongly believe that most people under-estimate the size of the bankroll they need. This isn't necessarily because they start out with the wrong size of bankroll, it is because many people get cold feet if they lose half of the starting bank.
In effective, this means they only had a bankroll that was half the size they thought they'd got in the first place. Indirectly, they have been taking risks relative to a different size of bankroll than the one they actually started with!
❷ If you are likely to quit should you lose half of your bankroll, you will be taking more than double the risks you thought you were in the outset.
As a general rule, bettors who are poorly funded are more likely to take greater risks as they will want to turn their 'small pot' into a 'big pot' as quickly as they can. Increasing a £50 pot into £100 over six months probably won't feel as though it's worth the time and effort. A target of turning £50 into £500 would be their aim.
I don't have a problem with anyone choosing to take higher risks as long as they understand those risks from the outset, but sadly, many people don't.
There is a further potential problem waiting down the line for the 'risk takers'. Should they get lucky early on and achieve their ambitious aim, the urge to 'keep pushing' will eventually lead them to push to a point where the inevitable will happen. No, you don't need to be rich or well off to make betting pay, but you must have realistic expectations with regards to what you can achieve. Push things too far and you'll almost certainly come unstuck.
Whilst no one will win in the long run if they're not betting (or laying) with the odds in their favour, even when doing so winning isn't inevitable. A sensible and appropriate approach to bankroll management and staking is necessary. i have to be perfectly honest and say that I give 99% of my attention to finding 'value bets' and 1% of my attention to bankrolls and staking. This is because I made my mind up a very long time ago as to what was right for me. It works and I feel no need to change it.
I don't stake amounts that take me our of my comfort zone. I have a bankroll that is far greater than I will ever need. The downside is that my ROC would probably look quite poor as I'm not a 'bankroll squeezer'. I may have made more money had I staked more aggressively but I can live with that.
Losing runs cause me next to no stress and that's the way I like it to be. If I get stressed, I am more likely to make poorer decisions with my bet selection processes. I can't afford to let that happen. My livelihood depends on making good decisions!
❸ Do your homework, decide on a bankroll and staking method that suits you and your temperament, then stick to it.
Mike Lindley
Copyright Winabobatoo 2020