 Lots of people keep asking about the betting system they should follow and how much risk they should put their bankroll in. If you do just a little research, you'll keep bumping into the same percentage over and over again. It seems that 2% is a magical number. Or maybe not? What is a simple explanation of that percentage? And say I'm convinced of not risking more than 2% of my bankroll, what about my staking plan? Should my betting be influenced by the odds or not?
Because we don't really know yet whether our method (strategy, system) is profitable. If we risk 2% of our capital, it means we have 50 bets to try out our system. Of course, we won't lose 50 bets in a row. Still, by collecting enough bets we will have a sufficient sample for the future in order to examine the efficiency of our strategy. The bigger that sample is, the better the analysis we could make of the system. Therefore, we need an adequate capital, so that we can come up with safe conclusions.
As we already mentioned, both systems are good, as long as our risk doesn't exceed 2% of the bankroll. Concerning which of the two is better, a proportional betting system is undoubtedly preferred over a flat one. That is, according to the fixed odds and the probability we calculate for an event to happen, we define the exact betting amount for each situation.
For example, you check an event which is offered at 2.00. You believe that event will come true 70% of the time (1.42). So, you bet 10 euros (1%). Now let's say another event which is offered again at 2.00, you think 60% is more likely to happen (1.66). We'd better bet 5 euros (0.5%). If you trusted it by 80% (1.25), you should bet 15 or 20 euros (2%).
Next, say you examine an event at 4.00 and you calculate the probability for it at 28% (3.57). In that case, you would bet again 10 euros. If you had it calculated at 33% (3.03), you would bet 15 euros. As you can see, it isn't just a case of probability's calculation, but also (and most importantly!) the relation between the fixed odds and that probability!
In conclusion, the bigger the difference between odds and theoretical probability, the bigger the size of the bet, independently of what are the specific fixed odds.
For additional information, you can check Probability Calculations and Value Betting and Bankroll Requirements and Staking Plan of the "How to Build your own Betting System " Series.
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My name is Jimmakos and I am a professional gambler since 2003. I played at the casinos' blackjack tables for a year and during the following 2.5 years I have been a Betfair trader trading the odds in the UK Horse Racing markets. Nowadays I'm playing online poker. Apart from online gambling, I also write about 
