Before placing a wager this football season, it’s important to understand the nuances of managing your bankroll.
First things, first… We believe that “flat” betting is the way to go. That is, bet the same amount for each play. “Chasing” or increasing bet size based on your last bet (or series of bets) is not recommended.
Over time, you may hear about various systems where you increase your bet size “knowing” that you are due to win sooner or later. In general, these systems don’t work. Eventually, a bad streak occurs and you are betting a recklessly large amount to re-coup losses.
In general, many of these approaches MIGHT seem to improve short-term performance – BUT at the HUGE expense of increasing your risk of ruin. A bad stretch could endanger your bankroll fairly quickly. If you DO succumb to the charms of various Martingale systems, please use some sort of systematic risk management method. In this business of sports investing, it pays to minimize your risk of ruin.
Professional money managers – as well as sensible sports investors – will agree that you should minimize the chances of “blowing out” your investment portfolio. Flat betting will help you to “stay the course” and ride the ups and downs of investing.
Next, you should think about the type of investor that you are. Are you aggressive or conservative? Are you experienced or a novice? The answers to these questions will help you to determine the size of your typical bet. This is called your “unit” size.
We typically recommend that a sports investor bet 1% – 3% of their bankroll on each bet. Conservative sports investors (or beginners) should bet 1%-2% on a play. Note that professionals are normally in the 1% range.
Aggressive sports investors might want to bet 3% on a play. 2% is a good medium; it allows you to withstand a losing streak while helping to build up your sports investing bankroll. Very aggressive investors might bet 4% or 5% of their bankroll on a bet, but this is too risky for most investors.
Why not 4% or 5%? The short answer is: Streaks and the risk of ruin. If you bet amounts that are too large, a bad streak could cut your bankroll in half (or worse). You then might feel like you need to reduce your bet size – just before the inevitable hot streak. Smaller bet sizes are more prudent and allow you to stick to your approach and stay disciplined.