Without proper money management even the best betting system is doomed to failure in the long run. Good money management is correlated with a disciplined betting behavior while trying to maximize your profits.
In this section, we will present the most efficient money management systems that professional sports bettors can choose according to their preferences.
A lot of sports bettors have the ability to correctly predict the outcome of sports events. What stops them to be successful in the long run is a solid money management strategy. A successful money management system maximizes profits while reducing losses.
The key pillars that sustain an efficient money management strategy are:
1. Establish a betting budget and use it exclusively for betting. The amount of your betting capital must be dispensable without having a major impact on your overall everyday finances.
2. Evaluate yourself psychologically and asses your stress level limit. It’s important to know how much pressure you can take. It’s not worth it to lose your mental health if you can’t handle the pressure. Choose a money management strategy that suits your character.
3. Money Management is about minimizing your losses too. Do not start placing emotional bets when you hit a losing strike. Stick to your strategy no matter what.
4. Whenever possible, try to maximize your profits.
You will find a lot of money management systems but keep in mind that a good money management strategy is about achieving a balance between maximizing profits while minimizing losses. All money management systems fall under the following categories:
Fixed stakes: Always use the same stake;
Variable stakes: The value of the stake is changed continuously
Percentage stakes: The stakes are increased or decreased in relation to the betting budget.
Progressions: Stakes increase or decreases according to the outcome of the last bet.
However, in order to be successful at sports betting, it’s not enough to have just a good money management strategy. The following conditions must be met:
1. You must be able to predict the outcome of sports events better than the bookmaker.
2. An efficient money management system is all about determining the proper amount you will place on each bet.
3. See sports betting as an investment and not a hobby.
Only when those 3 conditions are met you will be successful and worthy to be called a professional sports bettor.
Opposed to fix stakes, dynamic stakes are readjusted after each bet using a certain percentage of the total betting capital.
Assume we have a 1.500 EUR betting capital available and we want to risk only 2% of it (=30 EUR). If we win the first bet with a ratio of 2.5 then our capital increases to a total of 1545 EUR. Using dynamic stakes, we will place 30.9 EUR on the next bet (2% of 1545 EUR).
The main problem using this type of money management is the fact that even with extensive sports knowledge and a good selection of bets you could still lose.
We illustrate the last segment in the example below:
|Bet capital||EUR 1500|
|Dynamic stake / bet||2%|
For simplicity, let’s assume you won in a row the first 60 bets and then lost 59 bets one after another. Although you have achieved a 50.4% win/lose ratio, the total balance after 119 bets is at 1.494 EUR.
The main argument for using a dynamic stake is that you can generate more profits by ever-increasing stakes during a long winning streak than with a fixed stake.
Very popular in money management is the practice of rating the outcome of a sports event using units, in order to assess the risk for a certain bet.
Assuming 1000 EUR capital, we have decided for a 100 EUR maximum limit per bet. This would correspond to 10 units while 10 EUR would then be one unit which in turn is 1% of the total betting capital.
Now when evaluating bets, a notation of 3/10 represents the probability or the security of the bet on a scale from 1 to 10. In the selected example, 30 EUR would be placed for a particular outcome of the game.
The advantage of the “system unit” compared to loss progressions systems is that the risk of a total loss is considerably lower.
The problem with “Money Management by units” is that many sports bettors place their bets following their gut feeling and evaluate the “security” of the bet randomly without a background check for that particular event. Since there is no official scale of rating an event, the “security” of the bet is evaluated subjectively which in the long run will lead to a total loss of the betting capital.
The Kelly System is primarily designed to maximize profits and is generally associated with relatively high stakes. In order to use the system to full capacity, the bettor must be able to determine the correct odds for a betting event and assume that the bookmakers’ rates are too high.
A bookmaker offers a rate of 1.80 for each player for a tennis match. A ratio of 1.80 means that there is a 55.5% probability for each player to win (1/1.80). After detailed analysis, you have found that the actual probability for each player to win is 65% which corresponds to a 1.54 ratio (1/54 *100 = 1.54).
Using the Kelly formula we can determine the optimal bet
Kelly formula = Total betting budget x benefit/ (odds -1)
In order to input the correct values in this formula, an “advantage” must be calculated. The “advantage” indicates how high the “value” of the bet is.
Advantage = (likelihood ratio x - 1)
Assuming 1000 EUR betting capital, according to Kelly system we get:
€ 1.000 x (0.65 x 1.80-1) / (1.80 to 1) = € 212.50
When it comes to sports betting, keeping things simple might be the right strategy. A system using fixed stakes is not a profit generator but it has been used successfully by many professional sports bettors.
A system with fixed stakes makes use of a fixed percentage from your total budget as stake for each bet. The stakes should be 1-2% of your original betting capital. Using the fixed stakes system, the risk of total loss is considerably reduced.
Let’s assume an initial investment of 1000 EUR, 2% stake for each bet (20 EUR) and a rate of 2.0 for each bet. After 100 won and 60 lost bets we reach a total capital of 1.800 EUR. At this point we increase the stake to 36 EUR for each bet.
For the following 160 bets, we got only 70 won and 90 lost bets. Now our betting capital is only 1080 EUR although we have placed a total of 320 bets with 170 wining bets which in turn correspond to 53.1%. If we have maintained our stake at 20 EUR/bet, our total capital would amount to 1400 EUR.