Why is bankroll management important in betting?

Why is bankroll management important in betting?

on 28-Jul-2017 by MyFairBet Admin

If you are just stepping into the world of punters and betting, you’ve probably heard words like ‘bankroll’, ‘staking plan’, or ‘staking strategy’ being thrown around. Any profitable punter, whether they are professionals or amateurs, will tell you that managing your money is the lesser known job of bettors. Choosing value bets is important, but it is useless if you do not have good bankroll management skills.

So, why is bankroll management important in betting?

Punters can make many mistakes - they can choose a bet which has little value, or place stakes on sportsbooks with high commission rates, but the worst and most common mistakes made by both new and pro punters tend to be due to a bad staking plan.

To put it simply: to build a bankroll, all you need is to set some money aside and decide to use it solely for betting. A staking plan is your strategy behind how you use your money and how much of it you use. It is how you set your rules, your limits, and your exceptions.

But, why is a staking plan necessary?

In this article, we’ll go over the main reasons why good bankroll management remains the most important tool at the disposal of any successful pro punter.

Well, it keeps your money safe. The aim of bankroll management is to minimize exposure. Your bankroll is the money you set aside for the purposes of betting, and this money should always be separate from your savings. So, if for some reason or another you lose your bankroll, your finances and lifestyle should not be affected.

To put it simply: Make sure your bankroll is not your monthly salary.

Let’s say you set aside £1000, make sure you won’t need this money in the future. So take a close look at any debts or expenses you have going on before you decide to take money from your savings.

If you want to become a savvy money manager, we suggest taking a look at this article

There are many staking strategies that you can follow, from the Fibonacci, the Martingale (we do not really recommend progressive staking systems), to the simple level staking plan. We suggest opting for the proportional & percentage staking plan, alternatively known as the Kelly Criterion betting strategy. Don’t worry, it is not as hard as it sounds.

Actually, it is quite straightforward:

Let’s say you found a value bet. Betting your full bank on one wager - no matter how attractive it looks - is never a good idea. At the end of the day, there’s risk involved. If your bet loses, you’d end up bankrupt (your bankroll will be gone). At the other end of the spectrum, an ultra-cautious approach will not allow you to grow your bankroll efficiently.

The Kelly Clarkson approach works by balancing out two extremes. Firstly, the fraction of the bank to be staked (the money you will use from your bankroll), and second the size of your edge (what is the true probability that your bet wins). The latter is found by calculating implied probability. Remember, bookmakers build their own margin into the odds, which means the odds-on sportsbooks do not always accurately reflect real probabilities.

A staking plan is a set of ground rules that define how you will use your bankroll. Having limitations on how much money you can stake on any given wager will keep you from chasing losses.

The most important part of your staking plan? You become disciplined.

As you invest yourself in following your plan, you will become more calculated, cunning, and shrewd. This is the kind of punter bookies are afraid of.

If self-control is not your strong suit, consider finding someone you can reach easily who can act as your consultant. This will make sure there is someone to cool you off before you make decisions based on emotions. One rule you can set up is that you cannot bet above a certain percentage of your bankroll without consent from this person.

Of all these points, we want to emphasize this the most. As you learn more about the betting world, one advice you’ll keep hearing is something along these lines:

Do not let your feelings cloud your decisions.

But, we’re all human. If you’re betting on a team you’ve invested a lot of time and research on, and it loses, there is no way you won’t feel frustrated.

Find an outlet. Develop a ritual prior or after making bets - preferably something you enjoy doing (aside from betting!). Opt for something physically engaging, but easy and fun. Basically, choose an activity that makes you lose track of time.

Many pro punters suffer from mental burnouts, and this causes them to release their frustrations on friends and family.

Remember,

If you’re not in a good place in the real world, there’s no way you will do well in the world of betting.

So every couple of weeks, step away from betting, close the betting apps, and go somewhere nice with your family or friends. Cool off for a couple of days. We promise that in the long run, it will be worthwhile.

Patience and perseverance are key.

When it comes to betting, especially on sports, emotions can run high. A pro punter who has grit knows when to move on and look for the next opportunity, but it is easier said than done. So make sure you find an outlet.

On the other hand, overconfidence is equally reckless. Don’t let the rush of outwitting a bookie cloud your head. Make sure that you do not recklessly increase the amount you stake above the Kelly Criterion.

If you want to be taken seriously in the world of betting, good bankroll management and a sound personalized staking plan are cardinal rules.

Good luck!

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