Proper bet sizing: A key to successful sports betting
No matter the mach - you need a system to control your bankroll.
Besides being right, proper bet sizing is the most crucial aspect of successful betting. Your bankroll is your tool and you need to protect it.
Effective bet sizing minimize the risk of suffering unrecoverable losses. It lets you live and fight another day, and ensures you stay in the game for the long haul.
Do not take this lightly.
Understanding Bankroll Management
Your bankroll is the total amount of money you have set aside specifically for betting. Managing your pile, however small or big, is essential to avoid blowing up your account when the odds go against you.
To manage your bankroll properly you need two things:
- A «business» betting account
- A strategy for sizing your bets
We'll briefly touch on the first point before moving on to two strategies for proper bet sizing.
Lets dig into it.
A dedicated betting account
This is a prerequisite for succeeding. After all, a sizing strategy is not worth much unless you stick to it.
The problem: Betting is exciting and as with all enjoyable things - candy, booze, cat videos or whatever rocks your boat - we humans tend to overdo it. That includes betting.
Seing as you're reading an article on sports betting, chances are you enjoy having a punt if there's a match on the telly. Not because you've uncovered mispriced odds or have an edge, but because it makes the match more interesting.
If you're a casual weekend warrior that kind of unstructured betting, while not great, is not too bad. However if you want your betting to make a real impact on your income and your life, you cant co-mingle your punting money and your bankroll.
One is for fun. The other for business.
The solution: Keep two separate betting accounts. Use your bankroll account for your betting business, and do your impulsive, brain dead just-for-fun-betting on the other one. Don't mix the two. It won't end well.
This is a simple yet powerful step. Having structure gets you closer to thinking like a pro and it makes it easier to succeed.
Strategy 1: Flat Betting
With flat betting, you place the same amount on every bet, regardless of perceived value or odds. It is the simplest approach but gets the job done.
A common recommendation is to bet between 1 to 5 percent of your bankroll on each wager. The percentage can be adjusted based on your risk tolerance.
Below is a few examples with different bankrolls.
Your bankroll is 200 dollar:
- A sizing of 2 percent means you bet 4 dollar per bet
- A sizing of 5 percent means you bet 10 dollar per bet
Your bankroll is 5000 dollar:
- A sizing of 2 percent means you bet 100 dollar per bet
- A sizing of 5 percent means you bet 250 dollar per bet
Rebalancing
Now, the size of your bankroll will fluctuate. If you're skilled, or if you use my tips, it will grow. This means that every now and then you need to rebalance the size of your bets.
Lets say you start out with a small bankroll of 300 dollar and a bet sizing of 2 percent (6 dollar per bet). After two weeks your bankroll has grown to 450 dollar. That means you're winning which is great, but it also means that 6 dollar is no longer 2 percent of your bankroll.
Your 2 percent bet size must now be calculated based on your larger bankroll of 450 dollar. In order to stick with the system you up your bet size to 9 dollar (which is 2 percent of 450 dollar).
This process is called rebalancing. How often you rebalance is up to you, but you need to be consistent about it. You can either do it at a periodic basis, or when your bankroll reach a certain size. Personally I used to rebalance every time my bankroll had grown by 20 percent, but now I do it once a month.
As you can see Flat betting is a simple yet robust system. The strategy reduces the risk of large losses and helps you be consistent.
In short: If you're starting out or just want to keep things nice and clean, Flat betting is definitely a good choice.
Strategy 2: Unit betting
The next strategy is called Unit betting. It's a bit more advanced and starts with you defining a «unit» as a percentage of your bankroll.
For instance, if your bankroll is 200 dollar and you choose to define one unit as 2 percent of your bankroll, each unit would be 20 dollar.
So far the strategy resembles Flat betting. However the next steps is what makes it different:
- When placing a bet, you adjust the number of units based on your confidence level and the perceived value of the bet. For high-confidence bets, you might wager your maximum of 3 units, while for lower-confidence bets, you might bet only 1 unit.
Lets look at a couple of scenarios:
- Scenario 1: Manchester City plays at home against Ipswich, and the odds for City scoring two goals or more is 2,10. This means the bookie has made a mistake (City tend to score multiple goals at home, even against the best teams). This bet has should therefor be cranked up to your maximum of 3 units
- Scenario 2: Lets stay with Manchester City vs. Ipswich. The bet is still City to score two goals or more, only this time the odds are lower, say 1,18. The probabilities of City scoring two goals are the same, but the payout is much lower. Should you still size your bet to three units?
The answer depends on how likely you perceive a win to be. If its a slam dunk 100 percent certainty (although nothing is), you should still bet 3 units.
But If Citys stats show they «only» score over two goals at home versus bottom half sides four times out of five, that means there's a 20 percent chance you'll lose.
A 20 percent risk of loss for the chance of a 18 percent payout, which is what you get if the odds are 1,18, mens there's no value in the bet and you should leave it.
As you see, Unit betting opens the door to higher wagers when the odds are stacked in your favor. However in order for this to work, you must make the correct assessments of odds versus probabilities.
In short: Unit betting offer the potential for bigger winnings, but is more complicated and require a higher set of skills.
As with Flat betting, you need to rebalance as your bankroll grows.
Summary
Both Flat betting and Unit betting are sound strategies for sizing your bets properly. Of the two, Flat betting is the least complicated.
In general you should pick one of them and stick with it. Particularly when you're starting out.
What do I do?
About 95 percent of the time I use Flat betting with a sizing of 2 percent, but when I find odds with a particularly high value I tend to double or triple my standard bet.
PS. An article on bet sizing would be incomplete without at least mentioning a third approach, the Kelly Criterion. This system applies a formula for a calculating the optimal bet size based on your perceived edge and the odds offered.
I've never subscribed to it, but if you're intrigued you can read more about the Kelley Criterion here.