| Banned Join Date: Jun 2006 Location: Las Vegas, NV
Posts: 27
|  Money Management - A Must Read !
Money management: Some thoughts and a proven system, courtesy of:
TodaysPicks
There has been at least a thousand articles written about the importance of money management over the years, but I have gained very little from my time spent reading. Why? Because most of what I've read is an amalgamation of nonsensical tidbits that are difficult to make sense of, difficult to use, and ill conceived to begin with. This essay is not about criticizing other systems, however. Rather, the goal here is to formulate and explain a money management system that is user-friendly, works in the long term, and can have a real impact on creating and retaining profit from your sports betting investment. So without further ado, here's the Whocovers.com money management system that's been proven to work over the long term.
It starts with these five words: Straight bet and flat bet. Meaning, avoid the parlays, teasers, props etc that most books like to promote (it increases their own profit margins, of course). If you like the Broncos to cover the spread on a particular day, and the Bears and Falcons as well, bet them all individually. If you win all three, that's great, but winning two of three is much more likely than sweeping the card. And two out of three produces a profit. Even winning just one of the three bets is not a disastrous result. Sure, it's not a winning day, but for the three bets you made, at least you got a return on one of them. When you get into the habit of parlays and teasers, there's no result possible except winning all three bets that will allow you to get any return on your investment at all.
Flat betting means to wager a similar amount on every game that you play. We'll talk about wager size as a percentage of bankroll in a moment, but first we must discuss the concept in general. When you vary your bet size, it's easy to pick more winners than losers, but not bring home any profit as a result. Again, let's go back to the day where you like the Bears, Falcons and Broncos as well. Let's say you feel like the Broncos are the best bet on the board, and you decide to bet $330 to win $300 on LA. Then you like the Falcons and Bears a bit less, betting $165 to win $150 on both of those. Lo and behold, you win two out of three. Unfortunately, the two that you won were the smaller ones, and on a day where you picked more winners than losers, you'll still lose money. Specifically, you risked a total of $660, won two out of three, and got back only $600, a loss of $60. Had you bet them all for the same amount, you'd have a profit. For example, had you flat bet all three at, say, $220 to win $200, you'd have won $180. Same thing, winning two out of three; same amount of total cash risked, but one method shows profit, while the other shows loss. This is the key: When you vary your bet size, picking more winners than losers does not guarantee a profit. Same thing with parlays and teasers. But when you flat bet, keeping your bet size constant, regardless of how much you supposedly 'like' the plays the results are extremely predictable. Win more games than you lose and you'll make a profit every time.
Determining the appropriate bet size is a bit more difficult, but it's not hard once you understand the basic concepts involved. The goal is to bet enough to maximize winnings while keeping plenty in reserve to withstand any potential losing streak. Because you could be the best handicapper in the world, but if you lose all your money during a bad run, you're done - it's that simple. You have to be conservative enough to keep yourself in action, during good times and bad. And the amount of your bankroll will determine your standard bet size. Few folks recommend this, but I think your percentage of bankroll that you should be willing to risk on each and every play does vary depending on the size of your bankroll. Here's why:
Most bettors begin with a short bankroll, perhaps a few hundred dollars or a grand - somewhere in that range. For bettors with larger 'rolls a standard play involves around 2%-3% of their bankroll. For example, with 10k to invest in sports betting, the standard wager size should be between $220 to win $200 or $330 to win $300. But if you only have $200 to begin with, betting 2% of your bankroll equals a $4 bet. Not much fun or excitement to win four bucks, nor much profit when you do win. That's why, with lesser bankrolls, I'd advocate a more aggressive betting strategy for the short term; somewhere in the range of 5% - 7.5%. You have to be able to win something, and beginning bettors with this type of bankroll generally aren't as concerned from the get-go about riding out a losing period. I would never recommend beginning to get involved with sports betting without a minimum of $500 in your bankroll, making a standard wager size in the $25 - $30 dollar range perfectly normal and acceptable for beginning bettors. It's high enough to make some kind of profit and enjoy the fruits of your labors when you win, but you can ride out a bad week or two and still be in action.
Bettors with larger bankrolls must bet a lower percentage on each wager. Firstly, you have more to lose, so protecting your investment becomes crucial. It's one thing to lose a couple hundred dollars sports betting; it's quite another to lose a five figure bankroll. And you must think about what will happen if you do lose, because losing, while extremely undesirable, is a possible outcome. A rational bettor accepts this risk, understands it and makes his or her decisions accordingly. When you've got 5k in various accounts offshore, you can afford to take lesser risks to achieve your desired goal of making a profit. Again, the range of 2%-3% makes sense. You still make a nice profit when you win, and you limit your risk of losing your hard earned investment.
Straight bet and flat bet a specific and pre-determined percentage of your bankroll. That's the key. The hard part is having the discipline to do it, every single time. NO exceptions, no wild betting sprees off a big winning weekend or chasing to win back all the losses from a bad week in a single day. There isn't anyone reading this essay that hasn't seen a game that they absolutely loved, a sure winner. The temptation is there to load up on these games, the 'it's a lock to win' mentality. The reality is that when a $50 bettor places a $500 wager on a game, it's no more likely to win than any other game that the same bettor puts $50 on. The goal is always the same: If you can pick more winners than losers, you should show a profit.
The term for this kind of betting pattern is 'grinding'. We're not looking for the big score. Sure, there's someone somewhere who hits a seven team parlay every week, and there's someone else who risks his or her entire bankroll on a single play and wins that bet. But there are many more who don't have that kind of success, and those that do have it rarely maintain that kind of 'luck' over the long term. Eventually, they return everything that they've won back into the bookies hands. The grinders method is much less volatile and much more likely to achieve positive results over the course of a single season, or many, many years.
The bottom line is this: don't look for the quick score, because that's when the odds really are against you. Professional bettors including myself don't look for the 6-0 weekend. Rather, our goal is more like a 12-8 week that coveted 60% winners to losers’ ratio. A $110 bettor who goes 12-8 for a week will return $320 on a total investment of $2200 for the week, about a 15% return. Ask any stock investor if they'd be happy with a 15% return for a week and the answer is universally 'YES'. If you can average that kind of return over the long term, and it is quite possible to do so, you'll be betting and winning on sports for years to come, and enjoying the profits from your sports betting investment. Small, steady, regular profit over the long term can only be achieved with a solid money management system such as this one. Use it, be disciplined and watch your sports betting investment grow.
Last edited by BangTheBook : 07-01-2006 at 10:57 AM.
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