Bankroll & Money Management: Know Your Gambling Budget
To know what the term ‘bankroll’ means, you’re going to want to do a bit of history lesson – just before the advent of ATMs, credit cards, and other forms of electronic money, punters would have rolls of money with which to play a game at the casino, these rolls of cash serving as their banks. However, in modern times, bankrolls have become much less palpable. In simple terms, a sports bettor or casino player’s bankroll refers to the amount of money that the player has at his disposal for gambling with at the casino or during sports betting. In some cases, however, such as in a casino card game and other games in the casino, the bankroll may be stacks of chips for the player to make use of instead of money. It therefore goes without saying that for a punter to win after gambling at the casino for some time, his bankroll or money must be properly managed.
- Bankroll management strategies help control the way you wager
- Various laid down bankroll management strategies are used by experienced punters
- With Bankroll management strategies, your chances of winning are heightened
- Bankroll management strategies help you know when it’s time to stop.
Bankroll management on a losing streak
In an instance where the punter experiences a losing streak which is almost bound to happen when betting, instead of running after the losses aiming to make back the lost money immediately, a laid down strategy would instead help the player be disciplined and take his time betting with his money. Conversely also, in the instance of a winning streak the player is also protected from the excitement that may intoxicate the player into increasing the money to bet which helps prevent irresponsibly and an eventually loss.
Losing streaks are an eventuality that every punter, even professionals must prepare for when betting or gambling, as a win is only one side of the coin when gambling and won't happen all the time. However, the difference between professionals and novice bettors is the change of mindset of discipline to cope with such eventuality when you lose a bet. The use of working casino bankroll management strategies can help enact this much needed discipline that will control the punter’s wagers and give him time to restore his balance.
Bankroll management on a winning streak
As earlier stated, a winning streak may influence the player to lose his cool and want to just risk his money on bets that have been influenced by overwhelming feelings of excitement and false confidence. When the player has a management scheme that he diligently follows to spend his money on any game or sports, he is guided by these schemes to keep away from rash or raised stakes. It is obvious that increasing the money being staked is a risk and can prove to be dangerous since there will be a serious decline in the bankroll if the player’s bets become losses. Nonetheless, if these raises are done just as a process in the bankroll management scheme that suits the want of the player, it could turn out growing the bankroll.
The ability to make sound, logical decisions when betting even in the occurrence of a losing streak is a cushion that players need and which can be attained by having a bankroll management strategy in place. Bankroll management is probably one of the first skills that punters need to learn to make, because in the long run betting responsibly ideally increases a player’s chances of winning.
Bankroll: Establish betting rules
There are various betting strategies in casino and sports from which every punter has the opportunity to choose based on his like to help him not to lose. For beginners this is a great plus, because every person can establish his bankroll, research strategies, find one that he finds suitable to his ideas and goals and use it. If the gambling plan doesn’t have the expected impact on the bankroll, you may need to change it to another one until you find the one you like based on how you win at the casino. Below we have explained a couple of different money management strategies and underlined the pros and cons of using them
Fixed Stake/Flat betting strategy
When discussing the flat or fixed stake betting strategy, in its essence it is a strategy in which the player wagers the exact same amount of funds of his or her bankroll on every single bet he or she makes. This is known as the flat betting or the fixed betting strategy. To understand this strategy better, here is one example. If a player employs this strategy, he will wager a 1.5% of his $100 budget while the main implication here is that every wager he makes will bring him a profit of 15$. This happens when the player is a winning strake.
On the other hand, when the player is on a losing streak, and he still wagers the same amount which is $15, the percentage of the funds being wagered compared to his budget is higher. This naturally increases the risk. This is an obvious risk that stays on the player’s mind. Needless to say, amateur players oftentimes reduce the amount they wager when on a losing streak while they invest more when on a winning streak.
However, the losses when employing this strategy will not be recovered since the size of the bankroll played is smaller. On the other hand, players can manage this obvious risk by betting the funds which have been calculated as the current bankroll’s percentage. This is known as the percentage staking plan. When using the fixed stake strategy, you bet $15 when you have $1000, $18 when you have $1200 which is a 1,5 percentage of your bankroll.
Kelly criterion strategy
This scheme follows a mathematical equation to determine the optimal amount or percentage of your bankroll that you can lose on a certain bet in the casino. Several variables such as the player’s winning probability of the selected outcome, the player’s bankroll, and the odds of the selected bet, are make the equation, as it is shown below:
F = bp – qb OR p (b + 1) – 1b, where:
p (probability of a win)
q (probability of a loss) (1 – p = q)
b is the net odds of the selected game i.e. if the odds selected is 1.60, then b = 0.60
f is the percentage of the player’s bankroll to be loose on the next bet
The Fibonacci betting strategy
Another extremely popular betting strategy revolves around the Fibonacci number sequence which goes as 1, 1, 2, 3, 5, 8, 13 and so on. This method dictates the way in that the player will lose her or his budget. When you look into the Fibonacci number scheme, you see that the numbers included represent the certain pattern which players using this betting strategy will follow. To understand this better, let’s take one example.
The player wagers on draws only. In the case of his bet losing, the player will wager again and again until he scores any profit. With this method, it is highly recommended that you place bets that come with winning probabilities of 2.618 or higher. Nonetheless, the chance that the player will be moving onto the following Fibonacci sequence after wagering on several draws in a draw is very low and this is probably the major disadvantage of using this betting strategy.
To understand this drawback, let’s take another example. If the player’s betting strategy is the Fibonacci number sequence, a specific amount has to be fixed to represent a single unit. Let’s say that this amount is $20. This fixed amount implies that the very first wager placed by the player on a draw is $20.In the case that the player’s bet loses, the player has to adhere to the Fibonacci sequence of numbers and wager $40 that is two units of the initial, fixed stake set according to the Fibonacci sequence. The process is repeated according to the Fibonacci sequence until the player scores a win after that he moves down the sequence by two units.
Martingale betting strategy
This scheme was originally used for basic heads-or-tails game in the 18th century, with heads being a win and tails being a loss. Employing the method in gambling would involve you doubling your wager every time you lose until you win, with the aim of recovering the bankroll. Many professionals acknowledge this method as having a positive effect, especially when the stakes are favorable towards the punter. However, it goes without saying that a disproportionate series of losses will ruin this strategy as, the bankroll of the player will reach its limit in this kind of situations.
To illustrate the martingale betting system, an instance to analyze the strengths and weaknesses of the method will be used. Firstly, the bettor has to allocate a sum, representing a unit (like in the Fibonacci betting strategy). Assuming we pick the amount representing the one unit to be $10, when the punter begins betting he places his bet with $10 and replies a win with another bet at one unit which is still $10. Conversely, if a bet returns a loss the bettor will double the units on the next bet, and in this case the first loss will require the player to place $20 on the subsequent bet, then $40 following the next loss, and so on.
The idea is that after we lose one time, if the following bet (which will be the increased unit) wins then we have gained back one unit. However, take for instance that the player loses the next ten bet - $5120 will the total amount lost in the instance that we have assumed here, and is a lot of money. Therefore, using this strategy and succeeding would require the odds to be favorable to the bettor.
Betting strategies using software
If already laid down strategies do not do the punter or sports bettor any good, he could develop his very own custom money management strategy with the use of specific software that will display how the input of certain variables will influence the profit and loss of a punter in several simulated betting instances. With detailed use of data, the software can come up with suitable bankroll management approach for the player.
Hedging the bets and bankroll
Hedging conceptually involves the player betting on different outcomes (usually opposing), that could either;
- Result in profit notwithstanding the outcome of the different bets
- Significant profit from the first outcome
- Insignificant loss from the second outcome
This can be seen as an insurance method that help to protect the bankroll of the player from losses by using already existing bets. This is done by creating a scenario where the bet placed by the bettor almost always returns a profit.
It is important to know the difference between arbitrage betting and hedge betting and the major difference between the two is the timing of the bets. In arbitrage betting the punter places opposite bets of the same event at the exact same time, whereas in hedging, the punter places the opposite outcomes on the same event with one however coming after the original bet has been placed.
Simply put, hedging is a reaction to an earlier event to provide some form of insurance, as was stated earlier.
Where can you test your bankroll management strategies
Betting in a casino or on sports without a bankroll strategy and a good one for that matter in casino or sports betting is not an advisable tactic as it carries quite some risk as various occurrences will coerce the punter into using up his bankroll and ending up bankrupt after massive losses. However, you can still increase your chances of winning by simply betting responsibly using your preferred method of managing your bankroll when next you're ready to gamble. You can learn how to effectively manage your bankroll with any of the online casinos provided on our online casino comparison page. Simply select any of the provided casinos and start sharpening up your bankroll management skills by betting on sports of your choice or on online casino games like blackjack, video poker, baccarat etc.
Conclusion:Manage your bankroll for effective gambling
In the world of gambling and sports betting, most of the occurrences have a lot of risk, are unpredictable and thus not within the control of the casino players or sports bettors. However, there are certain other things that can be controlled by a gambler or sports bettor and indeed, they must be controlled by the gambler or sports bettor wishing to have higher chances of winning. One such thing as we have seen in this article is the player’s bankroll, which you need as a player before you make a bet. Certain strategies like the Fibonacci betting system, follow certain patterns to help the players maintain self-control and attain discipline they need no matter how the player’s bets may be going. This will help the punter or sports bettor to make less rash decisions and more logical and calculated ones, which increases the odds in your favor and helps to stay in the game longer which means the player would have a higher chance of a win.