This is a tricky one to write as everyone has an opinion on staking. My view on bet sizes and staking works for me but again it may not be for everyone. A few things to start us off:
This is the money you have allocated to betting and are willing to lose i.e. not your rent payment, or your kids university fund. I can’t stress this enough; you must be willing to lose this money. Betting is high risk. Even with the best strategies, planning and mental strength, there is still a high likelihood that you could lose your entire betting bank.
Size of betting bank
I’ll repeat what I said before. This should be the amount you can afford and are willing to lose. A good way to think about this – think back to some money you have wasted on a purchase you never used or a night out you didn’t enjoy. When you realised how much money you had wasted how upset were you? Your betting back should be big enough that you are upset when you lose it, but not so upset that you completely lose the plot. When people are starting out, this amount is usually around the 1k to 2k mark.
For some people, losing a 1000 pounds could take them over the edge, for others it may be 10 thousand. Again, your betting bank should be large enough that you care about it, but no so large that you start losing the plot when you lose most of it (e.g. resorting to anger, becoming emotionally unstable). Another way to think about it is, what amount will your other half be ok with you losing? i.e. an amount they are upset about but not an amount where they will pack their bags and leave.
Now back to the staking and bet size
Some people make this very scientific but I try and keep it as simple as possible. First, count how many different betting systems/strategies you are using.
Second, divide your betting bank by the number of strategies. Let’s say you have 2k and have settled on 4 strategies that you believe to be profitable long term. That will leave 500 pounds per strategy (2k divided by 4 for anyone struggling to keep up!).
Third, then divide the amount per strategy by 100 points i.e. 500 quid per strategy divided by 100 equals 5 pounds per bet.
This means that you can have 100 losing bets in a row before your bank for a particular strategy runs out.
I’ve assumed an even split of the bank across each strategy to start with, but please read the next 2 sections.
When should I increase my bet sizes
I suggest revisit every quarter as an absolute minimum. The logical thing is to increase your staking/bet sizes for the systems that are doing well. Makes sense but I will warn to make sure that one system does not have bet sizes far greater than any other system. Before you know, you will lose your diversification, become fully reliant on one system, and you could soon wipe out the majority of your bank if the good system hits a bad run.
System 1: flat, bank size 500 (0 profit)
System 2: +200 points, bank size 1500 (1000 profit)
System 3: +10 point, bank size 550 (50 profit)
System 4: -60 point, bank size 200 (300 loss)
System 2 had a great quarter with the bank size tripling from 500 to 1500. Dividing it by 100 points, you may be tempted to increase the bet sizes to 15 per bet. While I’m not opposed to this, as a rule of thumb, I avoid having the bet size on any given system being greater than 2x the size of the lowest betting system. In this case I would avoid increasing the bet size above 10 pounds per bet (5 pound being the lowest bet size). This will stop you becoming reliant on one system for your profits.
Reallocate your bank
Assuming 4 strategies, reallocate your new total bank (2350 in the example above) to the various strategies (with the bank size on one strategy never being greater than 2 times the size of the other strategies). Then divide the bank for each strategy by 100 points and you’re off again. I’d recommend doing this monthly in the early stages and then moving to quarterly as you get more experience.
Don’t be tempted to reduce your stakes on strategy 4. You have allocated 100 points as you believe it is a profitable system, and the 100 points acts as a buffer to absorb the losing runs.
If system 4 continues to be unprofitable, assess why you think that is the case. If the markets have changed or don’t behave as they previously did, then it may make sense to stop using it (lay the draw strategies being a prime example of this). Only then should you decide to switch the system out with a different one.
When can I spend my winnings?
This all depends on what your end goal is.
If you’re looking for some supplementary income, then you could potentially take out some money relatively early. Aim for a return of 5% per month. If your starting bank is 2k, then you should take out 100 per month. The expectation is that you will gradually build your bank up (get a return greater than 5%) and will gradually be able to take out more each month.
If you aim to be full time, you will want to reinvest all your profits back into your bank as this will see the bank increase a lot quicker.
For example, assuming an optimistic 10% increase in bank size per month, and then withdrawing 5% of the bank each month will see your bank grow from 2k to 3,093 at the end of year one and you will have spent 1,701 pounds (on going out or a new TV etc).
If you had the same 10% increase per month, but didn’t withdraw anything your bank will have increased to 6,277 pounds. In simple terms, every pound you withdraw now and spend, you will no longer earn a return on.
Betting with profits
Another key point, betting with profits is far less stressful than betting with money out your bank account.
Some people like to retain all their profits until they’ve doubled their balance. They then withdraw the original bank and you are back to square one in terms of bet size/staking. The big difference now is you are betting with profits. If things badly go against you, you are safe in the knowledge that you have a betting bank available to start all over again. This is a lot easier to digest than doubling your bank only to lose the whole thing due to increased bet sizes and a bad run.
I read about lots of different staking strategies. Should I use them?
There are lots of articles on a variety of staking techniques. The key is to use strategies that suit your risk tolerance. A word of caution; strategies where you increase you bet size to recover losses are not recommended as all you need is a bad run and your stakes become very large. Before you know it you’ve blown your entire bank. This is the most common way that people blow their entire bank. You have been warned.