More advanced bettors only.
Post updated on 28th November 2017
This post is only really relevant for people who already make a consistent profit from sports betting. If you are an absolute beginner this probably isn’t for you and you should check out bankroll management for newbies instead.
This is designed to amplify that profit as much as possible.
There are a number of ways you can do this without changing your strategy.
For example a common one of these is using the Kelly criterion to determine how much to place on each individual wagers.
The problem with this is:
- It’s complicated.
- It’s time consuming.
There is a better way though.
Relating Unit Sizing To Perceived Probability (Manually)
This is a strategy that I’ve used for a while.
Let’s assume for the sake of maths for a second that all plays are at +100. Meaning you should be needing a 55% perceived probability edge to take this play.
If you make 100 bets you will earn 10 units (55 wins – 45 losses) @ +100 = 10 units.
That’s great and all but what happens when our perceived edge increases but the odds decrease?
How much should you play on an event that is a 90% but at -300 for example? Should it be 3 units? 9 units? 30 units???
Well this comes back to bankroll management.
A 90% bet wins 9/10 times. But its not impossible that you actually get 2 losers in a row. Put in odds format there is a 1 in 100 chance that this happens. That’s too much even for me!
So instead I want to look into having a 1 in a million chance at losing my entire account. If this does happen then I’m happy to say WOW and move on. That’s how unemotional you have to be.
So in a 90% betting case we have to = a 1 in 1 million odds.
- That means the probability of losing once is: 1/10.
- Twice is 1/100
- Three time is 1/1000
- Four times is 1/10,000
- Five times is 1/100,000
- Six times is 1,000,000.
That means for plays that are 90% plays we want to risk: 1 sixth of our account (in theory.) But I actually recommend halving this for 2 reasons.
The first is that although 90% plays don’t come around very often when they do we don’t want to be over-exposed with the balance we have. If 3 plays come up at once as well as all our usual 55% or 60% edge plays, that means our entire bankroll could be on the line. Definately something I don’t want to do.
Second is that when you first start out you might only deposit $1000 in a betting account. But as your account grows you should start to use % of account instead of fixed $ units. E.G. if you started with $1000 you should start with around $10 or $20 units. Or 1-2% of your account per “normal” bet.
If we look at bets that could be 1/6th of our account when we first start that’s only $170 range, not a lot of money.
If we grow our account to $100,000 over 2 years say and then we see a 90% play appear, playing this for $17,000 is going to be tough as that’s an insane amount of money to risk on any one single bet.
Instead I would recommend risking 1/12th of the account. That’s around $8,500. That I can live with.
Warning: Don’t over estimate your perceived probability. This is an easy way to lose your hard earned cash!
Remember this entire article assumes you know how to build reliable perceived probability statements. That’s something that most people actually do not do well.
If you are unsure, under estimate.
Thanks for reading.