 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.
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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!
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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 full time Gambler. I started playing blackjack in 2003 in the local casino until I wasn't allowed to enter. During the following 2.5 years I traded the UK Horse Racing markets in Betfair.com. Nowadays I'm playing poker online mainly at 