In this post I want to walk through what it means when we say the term bankroll.
Your bankroll is the amount you’re willing to risk when you are betting.
Most serious bettors will have an amount that they are happy risking (lets say £1000) and they will use this as the starting point for how they place their bets.
Why is bankroll important?
Maintaining a bankroll is critical if you want to be anything more than a casual bettor who puts a fiver on their favourite team every so often. Even if you win more than you lose, if you don’t properly look after your finances you can still be losing money in the long run.
If you put too much money on losers and your winners aren’t covering those loses, then even if you feel like you’re on a winning streak you probably aren’t.
Not having a mature outlook and planning properly can lead to money disappearing all too quickly and when some of the more negative traits in gambling can come out, like chasing and overspending money.
How to protect your bankroll
There are a few things people do to try and protect their bankroll.
- Always bet a percentage of their bankroll. If you only ever bet a maximum of 10% of your bank roll, it is very hard to run out of money, it is just your bets will get smaller and smaller. For example if I always bet 10% of my bankroll and lost 10 times in a row, I’d still have £348 left, losing another 10 times in a row would still leave me with £121
- Use a variation of the Kelly Calculator. The calculator takes into account several key pieces of information;
- Your Bankroll
- The Odds for the bet you want to make
- The probability the bet will land
- Any commission or money you will have to pay for the bet
And using a formula best known as the Kelly Criterion it will suggest the optimal amount of money to be placed.
One of the most important ways you can protect your bankroll (and remain profitable) is to focus on losing less often. It doesn’t sound as sexy as winning big, but it is how you maintain your profit for longer and beat the bookies.