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Staking plans and Bankroll Management

What staking plan should I use to maximise my returns?

This is a question that a lot of people have asked over the decades. How much should I bet on a particular event?
 

Well I think the first part of that question is simple

1. How much money do you have?
2. Bet what you can afford to lose or to put this another way, don’t go broke!

The worst possible outcome for any gambler is to go broke. I’ve read a few books from poker players and professional gambler and traders where it says everyone goes broke at least once, and it’s how you bounce back from these setbacks that makes you who you are etc…. Bollocks!
 

I’ve never heard such nonsense in my life. You can’t justify after the event saying ‘oh well it happens to everyone’, it doesn’t and it just means you over staked and you’re an idiot. Never go broke. It’s not a hero movie like on TV, it’s your life. Be sensible, don’t chase losses. Treat it like a job, even it’s not and you will already have a head start on the competitions.

So what is the optimal staking strategy?
 

On betwade a standard 10 point level or unit system is used except for the bet of the month which can go to 20 points. This level staking isn’t a bad way to trade especially for the beginner or novice punter. It takes the emotion and stress out of deciding your stake and means you can focus on your selections. However, should you be having the same stake on a 100/1 shot as a 1/3 shot?
 

The answer is probably not. The main reason you enter any trade or punt is because there’s value. Think of it like you are backing a stock on the London stock exchange. Value is investing your money in an investment strategy where the stocks (or bets you make on sports teams) are selected that trade for less than their intrinsic values (or what the odds are). Value investors actively seek stocks they believe the market has undervalued.
 

So, if we make something a 50% or Evens (1 to 1 chance) and we can get 6/4 or 2.5 or 40% implied odds with a bookmaker or exchange, then we are getting 10% value on the bet.
 

Therefore the greater the difference in percentage terms we are getting on th bet, the higher we should stake on the selection.
 

(However, as you become a more skilled punter, this system can come a cropper when bookmakers start to restrict you as they employ very low skilled workers who can’t price anything up and just copy betfair. Bar this anamoly, this is the best way to go about increasing your bankroll and becoming a winning trader).

 

How should I manage my Bankroll and adjust my stakes?
 

It’s absolutely vital to never stretch yourself too far or over stake. In my opinion bankroll management is probably the second most important element after the selections themselves. If you are a gambler who is trying to win long term, improve what you are doing and maybe supplement your income, I think it’s unwise to stake more than 20% of your bankroll (the money that you put aside for only betting) on any one selection).  
 

It’s also important not to over think the staking system. Bet what you are comfortable with, but also have a general idea in your head what you should be staking on each selection at a given price

Here’s a rough guide that I use to manage my bankroll. It's based on a very loose Kelly Criterion. Kelly's Criterion is a formula that is used to determine how much of a bank should be risked on a given bet. The formula takes into account the odds of the bet and the probability that it will win and the probability that it will lose. However, Kelly Criterion is extemely aggressive and can recommend staking up to 90% of your bankroll on one bet which is ludicrous.

1 point / 1 % of bankroll – Fun bet size, big odds or accumulators
2 points / 2-3% of bankroll – Single and Doubles
3 points / 4-5% of bankroll – Singles only with implied value of 5%>
Max bet / Up to 20% of bankroll – Singles with implied value of 15%>

I hope this helps gives a good introduction to staking and bankroll management. If you have any questions about bankroll management or staking plans use the contact us page or google Kelly Criterion or bankroll management for further reading on the subject.

Good luck.