If you were to ask any successful sports bettor for their top five tips, it is almost certain that they would all include good bankroll management in their list. Managing your money correctly is absolutely vital if you're going to turn a profit through betting on sports. It helps with discipline and should ensure you never go bust from a bad run.
We've offered some advice on bankroll management in a previous article, and it's worth taking a look at if you're not familiar with the basic principle. In this article, we look at a specific aspect of bankroll management – staking plans.
Staking plans are used to determine how much you should stake when placing your wagers. There are several different plans you can use, each of which has its own advantages. We're going to look at two of the simplest, and most popular, plans. These are fixed staking plans and variable staking plans.
A fixed staking plan is the most straightforward way to determine how much to bet on your selections. Quite simply, you stake one unit each and every time you place a wager. The only real decision you have to make is the actual value of a unit.
The best way to decide how much a unit should be is to base it on the size of your bankroll, which should be a defined amount. It is widely accepted that you should bet between 1% and 5% of your bankroll as a general rule, so your unit size should be somewhere in this range. There is no right or wrong amount to choose here, it ultimately depends on your attitude to risk.
If you are risk averse and want to be as safe as possible, then valuing a unit at 1% of your bankroll is the best way to go. If your bankroll is say $500, a unit would be $5. So you would stake $5 on all of your wagers. This would mean you could lose 100 bets in a row before busting your bankroll, and if that happened then sports betting probably isn't for you.
If you're prepared to take a riskier approach, then 2-3% is fine. 4% or 5% is really only an option if you are either very confident in your betting skills or are happy with a high level of risk. At 5% it would take just 20 consecutive losing bets to go lose your entire roll. This is perfectly conceivable, depending on what sort of selections you're going for.
The other thing you need to consider with a fixed staking plan is how often you realign the size of a unit with your roll. Over time your bankroll will grow, or shrink, depending on how well you are doing, so at some point you will want to adjust the size of a unit accordingly. For example, if you were betting at 1% based on a $500 bankroll and you turned that $500 into $1,000, you would probably want to start betting more. 1% would now be $10 per wager.
A good approach is to adjust your unit size once every couple of months or so, or sooner if your bankroll changes dramatically. You can do it more or less often if you want though; there are no hard and fast rules.
A variable staking plan is a little more complicated. As the name suggests, it involves varying the size of your stakes for each wager. There's a range of criteria you can apply to determine exactly how your stakes vary. You can base them on your confidence level, the odds, or the expected value for example.
The most common way to use a variable staking plan is to use the fixed profit model. What this means is that you adjust your stake to make sure that each wager returns the same amount of profit if it wins. The key decision you have to make here is how much you want to make from each bet. Typically this would also be measured in units, so again you would have to decide on how much money a unit represents.
Let's say, as we did earlier, that you have a bankroll of $500. You decide to set a unit value at 2% (so $10), and set your target profit per bet at 2 units. This would mean that you would set the stake for each wager at a level that would ensure a $20 profit if it wins. Your stakes would therefore vary according to the odds of your selection. The following table shows how this works in practice.
As you can see, with this plan you could be required to stake quite high amounts relative to your bankroll if you were betting on selections with very low odds. While the general rule is that you shouldn't bet too high a percentage of your bankroll on any one selection, the idea here is that you would only do so when the wager has a very good chance of winning. You should, in theory at least, lose very few wagers when the odds are as low as 1.20 for example.
At the other end of the scale, your stakes would be very low when betting on selections with high odds. There is obviously more risk involved in wagers of this type, and you are likely to lose more of them, so it makes sense that you should stake a lower percentage of your bankroll.
Please note that you should periodically realign the size of a unit with your bankroll with a variable staking plan, in the same way as you should with a fixed staking plan. If your bankroll grows over time, then you will want to increase the size of your target profit. This will result in staking higher amounts, but you will have a larger bankroll to justify this.
Staking plans are a very important part of sports betting. The plan you decide to use could have almost as big an impact on your overall returns as the selections you choose to bet on. It should therefore be no surprise that there has been a lot of debate about which staking plan is the best to use.
There are advantages and disadvantages to both the plans as we've discussed in this article, and it's possible to make a case for either of them being the best one to use. There are other options too, such as the percentage of bank model for example, which have their own set of merits. It's also possible to design your own unique staking plan, which is something that many successful bettors do.
Many betting experts have very clear views about the correct staking plan to use, and may advise that the use of a particular plan is better than the other options. Our view, however, is that there is no one plan that is the right one to use. There are simply too many factors at play, and a lot depends on an individual's betting style and attitude to risk.
Our advice is simply to spend some time examining the different options and try to determine which plan is likely to suit you the best. If your preference is to use a very simple plan, and you tend to back selections at fairly similar odds, then a fixed staking plan will probably be best for you. If the odds of your selections vary significantly, then a variable staking plan with a fixed target profit might be a better option.
Regardless of what you decide to do, it's very important to recognize that the point of a staking plan is essentially to help you manage your money correctly. It can help you to maximize potential winnings, or minimize potential losses, but it is not a magic fix to guarantee you will win money regardless of how good you are at picking winners.
In some circumstances, a good staking plan can turn a losing bettor into a winning bettor. This would only be the case if a bettor was making fundamentally good selections though, and making bad decisions about how much to stake. No staking plan can make up for fundamentally bad selections.