Advanced Sports Betting Bankroll Management

Advanced Sports Betting Bankroll Management Guide to Making the Optimal Bet Sizes for your Sports Betting Bankroll

You might be exposed to previous articles about; ‘Bankroll Management’ where the three main bankroll methods that can be applied to sports betting were discussed. The most useful are the Kelly Criterion, the Percentage Method and the Fixed Staking Method. The article suggests using of the last of the three, while providing reasons for its benefits and advantages. However, if you want to make the most amount from your Sports betting, you need to consider the Kelly Criterion, as your best bet.

You will be exposed to exactly how the Kelly Criterion works, with an illustration of the formula in action. We will be describing in detail, the dangers of the system and how you can effectively eliminate risk. The conclusion includes an explanation of how the Kelly Criterion does have a specific challenge when gambling on sport.

The Kelly Criterion in Sports Betting

This criterion is a formula usable to determine the maximum size of a series of bets. This means you will be using an equation to work out the overall size. The final figure will be a percentage of your bankroll.

The equation is:

d = decimal odds - 1

s = Probability of success (between 0 and 1)

f = probability of failure (which will be 1 – ‘probability of success’)

Stake = ((d x s) – f) / d

Although it looks somewhat complicated, having used it a severally, you’ll realize it is not as complicated as it seems at first. Check out this example of the Kelly Criterion in action:

With a bankroll of £500 and then picked out a bet, in which you consider a strong edge, you stand a good chance. It men’s you think a certain Baseball team has a 55% chance of winning a certain game. You are likely to be offered more money (2.0 in decimal odds) by a bookmaker. Let the first thing you think of be the three variables; where; ‘s’ is equal 0.55 (equating to the 55% chance of success), ‘d’ is equal 1.0 (the decimal odds of 2.0 minus 1),  and ‘f’ will be equal to 0.45 (equating to the 45% chance of failure).

 

Plugging this into the formula will yield the following:

Stake = ((1.0 x 0.55) – 0.45) / 1.0

Stake = (0.55 – 0.45) / 1

Stake = 0.1 / 1

Stake = 0.10

Since your final stake is calculated to be 0.10, you will need to multiply your bankroll by this figure. Notice that in this case the gambler had a bankroll of £500. This will mean that he should stake £50 (0.1 x £500) on that baseball game for optimum chances.

Dangers associated with the Kelly Criterion System

The two key risks associated with the Kelly Criterion are significant.

The first risk will be the need for precision. You need to be very accurate when considering the actual chance of success is. This means that simply guessing a figure out of the air will not get this job done. For example, if in the above example, the gamer mistakenly made the assumption that the team had a 65% chance of success (instead of the 55% actual chance), the Kelly Criterion would suggested a bet of £150 (which is derived from the calculation to come out at 0.3) instead of the appropriate £50. This means that most small mistakes can be incredibly costly. With the knowledge of the exact probabilities of a sporting event, as being tough, the gambler should use this staking plan only when sure and confident in their estimations.

The second risk would be that sometimes the suggested stakes my take a large proportion of your bankroll. In the initial example, you wered adviced to stake 10% of your entire bankroll. Unfortunately, this figure is extremely larger than any regular suggesstions from other bankroll management plans. Naturally, the formula will on occasions eliminate numbers much bigger than 10%.

On the contrarty, there is a way out to eliminate the danger, used by many people today. It is; either half-Kelly or quarter-Kelly. This means that you’ll only stake a half or a quarter of the sum that Kelly will give you. This ensures that the system a lot less volatile. Beware that you will not be placing the ‘optimal’ amount anymore according to the new plan.

Challenges of Using the Kelly Criterion

Notice that the Kelly Criterion is designed for making only one bet each a time. This means a new bankroll after each bet for you. If you still want to bet on more than one event; such as on a Saturday afternoon, as you gamble on the UK football, you might be exposed to 8 game options. You may have them where you believe you have value across all the games. This means that adding the 8 stakes together gives you the urge to gamble 112% of your bankroll. Now, this is not possible! The system will tell you to stake 80% of your bankroll across these 8 games. Are you really sure about that much of your bankroll in play instantly? Moreover, you need to remember that if you had lost a bet on each match individually, your stake would reduce with each bet, so you wouldn’t have been wiped out. A winning run, on the other hand, would see the opposite. This means you would have won much more than you actually have achieved in the successive stakes making them much higher.

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