Choosing Your Bet Size
When placing sports bets, it takes more than simply making a winning selection. Anyone can achieve a relatively good hit rate if they bet on big favourites only.
However, this strategy might not turn out successful in the long run because the odds for these teams are always lower than average ranges and the profit margins are small. This leads to losses even with a minimal number of incorrect predictions.
Hence, it is important to select your bets based on their value. You can learn more about that in Value and Probability: Concepts That Will Make You Rich. In a nutshell, you should place a bet only when you think you have an edge over the bookmaker.
In other words, you should bet when the odds are higher than the probability of occurrence of a given event.
Finding value comprises only the first part of the equation, hence it is not enough by itself. The bet size is equally important.
Many successful bettors will tell you that the amount that you stake is more important than what you bet on. I believe it is of paramount importance to give your full consideration to the amount you intend to stake.
This article discusses different staking methods and demonstrates why it is necessary to use such through various examples.
Determining the Size of Your Bet: Fundamentals
All staking methods are based on certain rules governing the exact amount you could bet at any given moment.
There are several reasons why it makes sense to use such methods rather than make random selections.
- Using a staking method provides you with a great money management tool. Having strict rules in place makes it easier to avoid losses and bankruptcy.
- A staking method will help you manage risk more effectively.
All of these staking methods can be divided into two major categories:
- Fixed staking
- Variable staking
As the name suggests, a fixed amount is used for each bet you place. This method is suitable for beginners as well as those who are not interested in sports betting professionally but rather as a form of entertainment. It is an easy method to apply but at the same time could be restrictive for advanced bettors as it prevents them from maximising the potential returns on their bets.
Let us look at two examples of fixed staking:
- Fixed Stake
- Percentage of the bankroll
This is the simplest staking method. Essentially, you bet the same amount every time. The trick lies in the exact bet size. Ideally, you should choose something in the region of 1-5% from your current bankroll. A useful tip: the bigger your bankroll, the lower the percentage you should choose. If your bankroll amounts to £400, you should bet around £10 but no more than £20.
Alternatively, you may set certain betting objectives and readjust the bet size upon achieving them. Once again, it all depends on the particular situation. You may choose to pick a new fixed amount when your bankroll changes by £100 or £250; the idea is to stick to the objectives you have set for yourself.
Percentage of the Bankroll
This method is a bit more complicated than the previous one. It entails staking a fixed percentage of your bankroll every time. While the percentage is fixed, the money you stake varies based on your bankroll size.
Hence, you need to decide on the exact percentage. Generally, you could choose something between 1-5%. The lower the percentage, the lower the risk.
Example: Imagine your bankroll amounts to £400 and you choose to stake 3% of it at 2.00 match odds.
bet 1 – 12.00€ – loss – bank 388€
bet 2 – 11.64€ – loss – bank 376.38€
bet 3 – 11.29€ – won – bank 387.67€
bet 4 – 11.63€ – won – bank 399.30€
bet 5 – 11.98€ – won – bank 411.28€
As you can see, using this method means losses will reduce your bankroll as well as your stake, which prevents you from an overnight bankruptcy in case of a losing streak. When you win, your bankroll grows and so does your stake. As a whole, this option is much more preferable than betting a fixed amount.
This type of staking method is much more flexible than the fixed one, so it provides more opportunities for bettors. Essentially, each wager amount is determined by one or more specific criteria chosen by the bettor as follows:
- chance of success
- odds / potential return
- previous losses
- Expected Value
Here are several examples based on the above criteria:
Chance of Success
A lot of successful bettors use this variable when determining the amount they stake. Please note this refers to how confident you are of a certain outcome.
It makes perfect sense to stake a larger amount when you believe there is a greater chance of success for your wager, as well as a smaller amount when your confidence is low.
- First of all, we introduce the notion of Unit, which is a sort of measurement. Then we specify what percentage of your bankroll a betting unit will correspond to.Let us go back to the basic rule of 1-5%. The lower the percentage, the better, since you will sometimes be staking several units at a time.
If your bankroll amounts to £400 and you decide that 1 unit = 5%, that means every time you stake one unit, that equals £20, and you have a total of 20 betting units to stake.
- The second thing you should do is determine the chance of success: low, medium or high.
- Third, you need to figure out how much to stake given each probability. Use a simple system to avoid unnecessary complications.
Medium probability – 2 units => 40€
High probability – 3 units => 60€
1 unit in the example equals 5%; however, when the stake is 3 units, the total risk amounts to 15% of the bankroll, which is unacceptable. Use between 1-2%. This will provide you with greater safety.
Naturally, you may use any system you like. Experiment with it to find out what matches your personality and risk propensity best.
Odds / Potential Return
A criterion frequently used with variable staking is potential return. That means the odds is a major factor determining the exact amount we spend.
Here the first thing to do is estimate precisely the desired profit margin for each bet. For instance, you could be aiming at £20 per bet. There is a simple formula to calculate the required stake:
return/(odds – 1)
This method entails increasing the wager amount after incurring a loss, and it is mostly used by inexperienced bettors. The idea is to recover the losses as quickly as possible.
THIS METHOD IS EXTREMELY DANGEROUS AND I RECOMMEND STAYING AWAY FROM IT!
It may work at first but will definitely lead you into bankruptcy in case of a longer losing streak. Lots of bettors have squandered their entire bankrolls increasing the stake with each subsequent loss.
The most common method based on EV is the Kelly Criterion. It is probably one of the most complex approaches to determining the size of the stake, which involves a mathematical formula to calculate the optimal betting amount as a percentage of the bankroll.
The formula takes into account the odds and the probability of winning. Essentially, the basic premise is that the wager amount is higher against a higher Expected Value, which in turn leads to an increase in potential return.
Choosing a Staking Method
Before I give you several tips on how to choose a staking method, I would like to emphasize something:
Optimal betting size itself cannot make you a winning player.
At the beginning of the article, I explained that winning selections only are not enough to turn you into a successful bettor. Likewise, the exact betting amount is not a sufficient premise.
Staking methods have been developed to help you make the most out of the matches you play, not to show you what to bet on.
Which Method is the Best?
You might think I am going to tell you which option from the list above is the best but I have to let you down. It’s not that I don’t want to help you but I just don’t think there is such a thing as “the best method”. While one approach might work for one person, it could be a total disaster for another.
Each method has its own advantages and disadvantages. It is important to find out which one is the optimal for you. To do so, answer the following questions:
- Which method corresponds to my betting style?
- Which method is compatible with my risk propensity?
- Which staking plan will help me achieve my objectives?
There are no right or wrong answers. All that matters is what works best for you. Don’t be afraid to experiment and change the staking method in case things are not going well.
Just remember that the good choice of a betting amount is only one component of successful betting. Another essential factor is using the right strategy.