Many professional punters like to have a set betting bank (size varies depending on wealth) from which they place all their bets. This allows them to easily keep track of profit and loss because all winnings and losses are coming from the same bank. It also allows them to stake set proportions of their bank on bets which reflect their confidence in the selection's chances. Profit from the bank is periodically withdrawn or withdrawn when it reaches a certain amount to be used for non-betting purposes.
You may have a betting bank of £1000, from which you may withdraw profit every time the bank reaches £1500 or instead whatever profit has been made each three months.
Assigning unit stakes to bets can be useful as it makes the punter more disciplined and less likely to over bet an event. Sometimes a maximum and minimum unit stake is used, from one unit to twenty units for example. Depending on the seriousness of the punter a unit may be £1, £10, £100 or even more. These units are usually referred to as points.
The more disciplined a punter the smaller band of units they will probably use. This makes them even less likely to over or under bet an outcome as the difference in confidence between units will be even more clearly defined in their mind.
You may have stakes varying from 1 to 5 points. Each point is worth £20. A minimum bet for you would be £20 and a maximum bet would be £100.
Kelly's Criterion is a formula that is used to determine how much of a bank should be risked on a given bet. The formula takes into account the odds of the bet and the probability that it will win and the probability that it will lose. This does have the advantage of ensuring the whole bank is never lost on a bet and helps to steadily increase the bank. A disadvantage of this is that there is no way of guaranteeing that money won't be lost. In fact, there is a 1/3 chance of halving the bankroll before it is doubled.
The Martingale System is often associated with Roulette but can be applied to any sort of betting. It is essentially doubling up after every losing bet. If the odds are evens or over then in theory the punter cannot lose as they will receive all of their losses back every time they back a winner.
However, in this theory the punter has an unlimited betting bank to cover each bet.
In reality betting banks can run out and maximum stakes that bookies will allow can be exceeded so the Martingale system is not recommended as the stakes can soon get out of control.
You bet £1 and lose
So you bet £2 but that loses
So you bet £4 and that loses too
You bet £8 and that wins.
You make £8 profit on your final winning bet which after the previous 3 losses of 1,2 & 4 = £7, leaves you with £1 profit
Other Staking Systems
Some punters will consistently bet the same percentage of their bank. For example, every bet placed will be 5% of the bank. This means that during bad runs the stakes will be reduced and good runs the stakes will be increased.
The problem with this however is that it doesn't take into account how confident the punter is about the bet. It can often be better to change this system slightly to take into account confidence. Three levels of confidence can be assigned, with 7.5% of the bank being a confident bet, 5% being an average bet and 2.5% being a not so confident bet. The exact percentages used are of course up to the punter.
The key to managing money is to bet sensibly. The main rule every punter should have is to only ever bet what they can afford to lose. Betting should be viewed as fun more than anything else and when it is no longer fun it is probably time to give it up.
Betting an entire bank is never a good idea either. However confident you may be about an outcome, freak results do happen and it can leave you with nothing left with which to try and claw your losses back.
The biggest mistake someone can make is to chase their losses. Chasing losses is when someone tries to win back what they have lost in a day or week by either upping their stakes or betting on selections they wouldn't normally gamble on.
The best way to avoid chasing is to set out exactly how much you are going to bet on your fancied selections at the start of a day and preferably what prices you expect (so that you don't over bet to compensate a shorter price than you were expecting). Stick to this rigidly and there shouldn't be any problems.
If you find that you are one of those people that just can't help chasing your losses then place your bets in the morning and don't check the results until that night when all the racing or football matches have finished and there is nothing else to bet on. If you find you have lost money then there is nothing left to chase on .
Chance Versus Odds
A good way of determining how confident you are about a bet and therefore how much you should stake on it is to consider how many times you think that outcome would occur if the event was run or played ten times. The more times it should happen the better the bet is.
Then you have to consider value so consider how many times you think the event will occur and compare it to the odds available. Something that you would expect to happen five times out of ten but is only a 4/5 shot is not as good a bet as something you would only expect to happen one time out of ten but is a 20/1 shot. The better the chances seem compared to the odds available, the more units should be assigned to the bet.
You think a horse would win half of the time if the same race was run ten times.
FAIR ODDS: If the horse is priced at even money.
5 wins @ Evens = 5 profit, but 5 losses =-5 => break even
BAD ODDS: If the horse is 1/2
5 wins at 1/2 = 2.5 profit, but 5 losses =-5 => -2.5 loss of our 10 staked
GOOD ODDS: If it was 3/1
5 wins at 3/1 = 15 profit, but 5 losses =-5 => 10 profit from 10 staked