There are very few hard and fast rules when it comes to successful sports betting. All kinds of different strategies and skills can be applied; and to succeed, you ultimately have to determine what works best for you. There are, however, certain fundamental practices that simply cannot be ignored.
Managing your betting bankroll correctly is one of them. No matter how good you are at other aspects of sports betting, if you don't manage your money properly, you will greatly harm your chances of turning a profit. It would be fair to say that bankroll management is one of the single most important skills required for successful sports betting, and for most forms of gambling for that matter.
In this article, we explain why managing your money is so important and offer some advice on how to do it properly. For anyone not familiar with what the term bankroll means, we start with an explanation.
In sports betting, your bankroll is basically how much money you have allocated. It's not necessarily how much you have in your online betting account, but rather how much you are prepared to risk overall.
Many bettors, particularly recreational ones, make the mistake of not actually deciding upon the amount of cash they are willing to spend on betting. This is not necessarily a major mistake if you are purely betting for a bit of fun, although even then it's a good idea to set aside a fixed sum of money. It is essential to do so if you are remotely serious about trying to make a consistent profit.
Good bankroll management involves having a clear system that dictates how much money you should stake on a wager. This can be a fixed amount, or it can be an amount that varies depending on certain factors. We'll cover more about how to manage your money later, but the first point to understand is how it helps you.
The reason why bankroll management is so important is basically because it helps you avoid one of the biggest mistakes that bettors make--betting too much. This is an incredibly common mistake, and one of the main reasons why so many people tend to lose money.
If you bet too much, you can expect to go bust at some point. At best, you'll give up and decide to quit before this happens. Regardless of how good you are at picking winners, you will pick plenty of losers as well. If you happen to go on a bad run when losers all seem to come all at once, then you could lose a lot of money.
These bad runs can and do happen, even to the most successful gamblers. They can really get you down, and many bettors quit even if they don't go bust. Good bankroll management can help to prevent them from becoming a major problem.
Bankroll management ensures that you only risk a relatively small percentage of your overall money on any individual wager: you should be able to withstand even the most brutal of bad runs. It also helps to maintain discipline and stops you from increasing your stakes in an attempt to recover previous losses quickly. Chasing losses very rarely works and is never a good practice.
To sum up, bankroll management is important as it should stop you from going bust or getting too disheartened. If you do it properly and still manage to lose your whole bankroll, then you know that something else is fundamentally wrong. In such a scenario, it might simply be that sports betting is not for you. At the very least you'll need to rethink your overall approach.
There is no definitive correct way to manage your bankroll, as certain variables are involved, such as personal circumstances and attitude to risk. There are, however, some general pieces of advice that you should follow.
First and foremost, absolutely make sure that you decide upon an amount of money that is going to form your bankroll. We touched on this earlier, but it's worth repeating. The amount of money you set aside should be no more than you are prepared to lose in a worst case scenario.
You should also set yourself some rules about when to take profit and how much. Let's say you have a bankroll of $500. You may decide to take out $50 every time you make $100 of profit. Alternatively, you could decide to take out a percentage of any profit you have made on a weekly or monthly basis. These examples are based on the desire to grow your bankroll over time. You can also choose to take out all of your profits if you prefer.
Another important rule pertains to what percentage of your bankroll to risk on a wager. This percentage should be somewhere between 1% and 5%, depending on your attitude to risk. Professional gamblers tend to stake just 1% of their bankroll on any one wager, so it's worth bearing in mind; but there's nothing wrong with risking a higher percentage.
The percentage you choose determines the size of one betting unit. If you decide upon 2% and have a bankroll of $500, for example, then one betting unit is equal to $10. If you decide upon 3% and you have a bankroll of $1,000, one betting unit is equal to $30.
You should also think about whether you want to use flat or variable staking. Flat staking is very straightforward and simply means that you bet one betting unit for every wager. This is the approach we generally recommend for beginners, or those with very little experience.
Variable staking entails adjusting the size of your wager depending on your confidence of winning. Thus you would risk fewer units for a speculative wager, and more for one you are very sure of. Again, there is no definitive correct way to approach this. A good method, in our opinion, is to rate your confidence of winning any wager as low, medium, or high. Low confidence means half a unit staked, medium confidence means one unit staked, and high confidence means two units staked.
This is all you need to know about bankroll management. It's vital to understand the concept if you want to be successful, and it's not actually that difficult to implement it. Hopefully the advice in this article will help you out.
One final word of advice is to make sure you stick to the rules you have set for yourself. This is harder to do, but there is no point in having a bankroll management system in place and not having the discipline to follow it.