Part 3 - Bankroll Management and Maximizing Your Edge
In the last two parts I focused on value; what it is and where to find it. This week I look at bankroll management, and how it can help in maximizing your profit when you do find value.
In case you missed them, here are the first 2 parts of this value-betting series:
- Part 1: What is 'Value', and how does it affect your strategy
- Part 2: Specializing, beating bookies at their own game
Profit in Gambling Through Value – What is Bankroll Management?
Many people have a very erratic approach to staking when it comes to gambling. They might suddenly place their entire bankroll on a selection they feel certain of, they may double their stakes every time they win, they may increase their stakes every time they lose, or they may bet half their bankroll on a longshot for the sheer fun of it – hoping for that big win.
Any of these approaches might be enjoyable, however if you want to make a regular profit, these approaches are unsustainable over the long term, as going bust will be a regular occurrence. Wouldn’t it be better to have an approach where you could never go bust, and if you do have an edge, to make a guaranteed profit with that edge?
There is a bankroll management system that many successful gamblers use, and it is a unit based system.
Profit in Gambling Through Value – Unit Bankroll Management System
The unit system works by assigning a range of units to your betting. In many cases, the unit range is from one to five, but the choice is yours, you could go both higher or lower. Using the five unit system, you would assign one unit to your smallest bets, moving up to five units for the bets you are the most confident in. The one unit bets should form the majority of your bets, and as you move up, you should use each additional unit less – your five unit bets being the rarest of all. The units will correspond to a percentage of your bankroll – in many cases each unit is 1%, but once again the choice is yours.
Here is an example:
You go through the days Baseball games, and you have picked five teams you consider are value, the Dodgers, the Braves, the Mets, the Orioles and the Phillies. You feel that the Braves, the Mets and the Orioles offer some value, you think the Dodgers offer good value and the Phillies price very much surprised you and is the bet of the day. So you decide to stake it this way:
Dodgers 2 units
Braves 1 unit
Mets 1 unit
Orioles 1 unit
Phillies 4 units
So you’ve staked eight units in total, and half of that is on the Phillies. Being the bet of the day you assign the Phillies bet four points, not quite a good enough wager in your mind to hit the maximum five units. You have a bankroll of £1000, so you will wager £80 on these games in total, as each of your units corresponds to 1% of your bankroll.
Profit in Gambling Through Value – How do I Maximize profits in Gambling
As a general rule you want to assign more units to the wagers you place where you think you have most value. If you look back at part two of the series, we saw how to work out odds and compare them to the bookmakers odds – and you could use this as a basis for your unit assignment – the bigger the difference in odds, the more units you could assign. Here is a way you could go about it:
1 unit – Bookmakers odds between 1% and 10% above what you have calculated.
2 units – Odds between 11% and 20% above calculation
3 units – Odds between 21% and 30% above calculation
4 units – Odds between 31% and 50% above calculation
5 units – Odds between 51% and 100% above calculation
This is just a suggestion and depending on the types of markets you play, you may have to change these bands somewhat. Maybe the maximum edge you’ll ever see is 20%, so you could narrow these bands – the decision is yours, but if you use a staking formula and stick to it, you won’t go far wrong.
Profit in Gambling Through Value – Maximizing Profit and Never Going Bust
Using the unit system as a percentage of your bankroll means that it is actually impossible for you to go bust – as there will always be funds left over. As your bankroll increases, so will your stakes, however, the swings will not be too wild, and you’ll be able to cope with that losing run (which will happen).
Profit in Gambling Through Value – Part Three Overview
This week we saw how good bankroll management can protect you from the swings you’ll have in betting, and how it can maximize your potential earnings. Next week we’ll look at using bonuses and offers in gambling, and the extra value that can bring.
If you are looking for the best lines (where you'll naturally find the best value) then US bettors should check out the (US-only) Bovada Sportsbook. This book has been around for years, and was formerly known as Bodog. Check them out at www.bovada.lv.