Bankroll Management in Sports Betting
Throughout our sports betting guide we mention repeatedly that there's a lot more to being successful than simply picking winners. We mention this so often because it's such an important point, and yet one that so many bettors fail to really grasp. There's a common assumption that all that's required is the ability to pick winners with some degree of frequency.
It's of course true that you will win money if you only ever pick winners, but the reality is that no-one can accurately predict the outcome of sports events all of the time. Even the very best bettors in the world lose a percentage of their bets, and most of them will experience bad runs from time to time.
The risk of a bad run is a major reason why money management, or bankroll management, is so important. Bankroll management is the topic we're addressing in this article, and it's one of the truly essential skills you need to master if you plan to make money from sports betting. It should be a consideration even if you are just betting for fun, while it's absolutely vital if you're serious about betting for profit.
Below we explain what bankroll management is all about, and why it is so important. We also offer some basic advice for managing your money effectively.
The Basics of Bankroll Management
The basic concept of bankroll management is really quite straightforward. The idea is simply that you allocate a certain sum of money to bet with, separate from any other money you earn or have. This sum of money is your bankroll, and should be used solely for the purposes of betting. You can add more money to it if required, and take money out of it if you want, but at any given time you should have a fixed bankroll in place.
Once you know how much money you have to bet with, you can then manage that money in an appropriate way. Bankroll management is effectively about defining, and following, some set rules about what percentage of your bankroll you are prepared to risk for any wager you place. There's no single correct way to define these rules, as that depends on a number of factors. The point is just that the amount you stake should always be directly influenced by the size of your bankroll in some way.
There are some general principles you should try to adhere to when deciding how to manage your bankroll, and we offer some advice on these later. First, though, you should understand just why bankroll management is so important.
The Importance of Bankroll Management
There are four key reasons why good bankroll management is essential for your sports betting success. These are as follows, in no particular order.
- It will help you to remain disciplined.
- It will stop you from going bust.
- It will enable you to manage your exposure to risk.
- It will help you to determine your true success rate.
Remaining disciplined gives you a big advantage in sports betting. There have been countless bettors throughout time who have been very good at picking winners, but failed to find consistent success due to a lack of discipline. Common mistakes caused by a lack of discipline include chasing losses during bad runs, staking too much, and taking unnecessary risks.
Good bankroll management won't necessarily stop you from making these mistakes yourself, but it will certainly make it easier to avoid them. With a defined set of rules in place about how much you can bet and when, you are much less likely to do something crazy. You should also be able to avoid going bust, as you'll only ever be betting a percentage of your total bankroll.
You can also manage your bankroll in a way that means that you risk smaller amounts of money on more speculative wagers, and larger amounts on wagers that are more likely to win. This is a great way to manage your exposure to risk, which is important regardless of your overall betting style. Even if you like to take big risks, you still need to manage those risks.
Bankroll management helps you to determine your true success rate because keeping your stake levels uniform to some degree means you can accurately analyze just how well you are doing. If you are betting all kinds of different amounts on a random basis, then this is much harder to do, as your results can be skewed by one big win or one big loss.
In summary, good bankroll management will basically help you to make good decisions. It should really improve your overall chances of making money, and at the very least will stop you from losing too much.
Bankroll Management Advice
The best piece of advice we can give you regarding bankroll management is simply to make sure you use it. There really is no excuse for not managing your money properly, because it's not difficult to do and it will definitely help you to be successful. There's not one particularly right way to go about it, it's just important that you do think about it. With that being said, there are a couple of basic principles that you should try to stick to.
For one thing, your bankroll should only consist of money you are prepared to lose. If you're betting with "scared" money that you can't afford to lose, you'll almost certainly make bad decisions. This is really the main point of having a bankroll in the first place, and you should think of your bankroll as a tool with which to make money rather than as money itself. It should be kept separate from any of your other money.
You should also very clearly define the rules about how much you're going to stake on any given wager, and then make absolutely sure that you follow them. The exact rules are ultimately up to you, you just need to consider what level of risk you are comfortable with and what goals you are trying to achieve. A good guideline is that you should always stake somewhere between 1% and 5% of your total bankroll on a single wager.
The best way to define a set of rules for managing your bankroll is to use a staking plan. There are several different plans you can use, each of which has its own pros and cons. You should ideally learn a little bit about the different options, and then choose the plan that you feel is more suitable.
Author: Brad Johnson
Updated: March 2015
Related Sports Betting Articles