Bankroll management is an efficient strategy that allows bettors to have control over their bets and optimize their winnings. Indeed, there are several methods that can be employed to establish effective bet management.
Understand with this article how bankroll management works and how to develop it profitably while safeguarding your financial resources.
What is bankroll management and what is it for?
In simple terms, bankroll management is a strategy to manage the amount of financial resources allocated to sports betting. It is an efficient tool to direct your bets and safeguard your resources from losses.
Without a doubt, using this strategy allows you to evaluate whether a bet is truly worth it, as well as to maintain a balance in your bets, avoiding excessively high stakes. The allure of a high profit potential can attract many players.
However, there is no certainty of winning, and bettors can lose all their resources, effectively depleting their bankroll. This is why it’s important to analyze the situation before placing bets and to maintain emotional control, avoiding impulsive decisions.
Factors influencing betting decisions
It’s important to consider various factors that influence betting decisions, including the following:
- Financial reality of the bettor
This is the first point to analyze before starting to place bets. It’s essential to assess how much of your income can be allocated for this purpose without affecting your monthly budget.
Considering around 10% of your income to form your monthly bankroll would be a good idea.
- Setting defined goals and profit targets
The idea here is to think of bets as an investment that requires defined goals to direct your actions. Even if it’s for fun, it’s important to remember that your money is being invested, requiring caution and strategy.
A good strategy is to set a timeframe to achieve returns, for example, 2 months, 6 months, or 1 year. Once the timeframe is set, it’s time to plan the strategies to adopt to ensure higher chances of profit.
- Establishing a strategy to determine the value of each bet
This is a crucial point in establishing a good bankroll management strategy. Betting $50 on one day and $500 the next is a lack of strategy that can quickly deplete your bankroll.
Consistency in the values of bets is essential, and it’s not necessary to place bets every day of the week. To decide whether to bet, you should analyze whether the event holds value and genuinely has a chance of generating substantial profits.
Additionally, having a coherent stake, or the value to be bet, is essential. This can involve using a predetermined amount or a percentage of your bankroll.
Strategies for effective bankroll management
There are several bankroll management strategies that cater to various types of bettors and betting objectives. To choose a strategy that suits your interests, it’s necessary to understand them. Here are some strategies:
Fixed Value Method
This is a simple and easy-to-apply strategy, where a fixed value is considered for placing bets. For example, if your bankroll balance is $100 and you consider 20 units, you’ll have $5 for each bet.
Percentage Value Method
In this method, the criterion is a percentage value of the available balance in your bankroll. Some bettors work with percentages between 5% and 10%. This means the value of each bet depends on the account balance available at the time of betting.
Martingale Method
This is a widely used method that involves doubling the bet every time there’s a negative outcome. For example, if you bet $10 and lose, your next bet would be $20, and if you lose again, it would be $40.
Kelly Method
This method is also widely used but is more complex, requiring calculations to determine the bet value. By using the estimated probability of the outcome and the offered odds, it’s possible to determine the percentage of your bankroll to be used.
The formula to use is: (B x P – Q) / B, where:
B = Odds presented -1
P = True probability (your assessment of the chance of the expected outcome)
Q = 1 – P
Fibonacci Method
This method is slightly more complicated than the others and is used for cases of draws with odds higher than 2.86, using a specific progression. This means you would employ a sequence that increases gradually, such as: 1, 1, 2, 3, 5, 8, 13.
Now that you’ve understood how to profitably manage your bankroll, you can start placing your bets.
