Money ManagementPosted by: Mitko Atanasov in Mar, 2010
Money Management is the most important step in your betting journey.If you master this, you will probably master every business that includes money in it. So take out a pen and a piece of paper, or open up that word document and get this down.
Why is this step so important you ask? Because if you are going to make money, you will have to learn to manage them. Unfortunately for a lot of people, if not the majority, this seems like a very easy task to do, and it’s often overlooked. And guess what, the majority of the people playing and trying to make a profit from betting are neither winning nor making money.
So let’s get to the money management part. Get familiar with the following terms: Drawdown and Maximum Drawdown. To make it easier for you to understand them, I will give you the following example:
Say you have 1000€ in you player’s account and you just lost 500€! What percentage of your account have you lost? You are right if you said 50%.Now what percentage of that 500€ you have to make up to break even and get back to your original 1000€?What, 50%? Wrong, you have to now make up 100% to get back to your precious 1000€. This is called a drawdown, or in this case 50% drawdown.
The above example has the idea to show you how easy is to lose money from your player’s account and how hard is to gain it back. But that can’t happen to you right? Of course it can, and it will if you don’t pay attention seriously to what I have been talking about until this point. Even with a good strategy and betting systems that often returns profit, there’s always a time where things head in downwards direction.
Always and always risk a very small percentage of your total account amount. Again to make it more clear let me show you an example:
Example 1: Risking 2% of your account
Example 2: Risking 10% of your account
Starting Amount: 20,000€
Scenario: You are in a period where nothing comes up right, and you lose bet after bet.
By the end of the 20th consecutive loss, when risking 2% you would still have 13,903€ left, while risking 10% will get you down to 3,002€. Do you see the huge difference? Eight percent difference on every bet, but a whopping 54% difference on the money left in your player’s account.
That’s 10,000€ right there. Of course that’s a lot of bets, but even after only 5 losses the 2% risk scenario will get you down to only 18,447€ , compared to the 10% scenario that will get you down to 13,122€.
I bet you never looked at it this way. My point here is to teach you how to make some money management rules so after a big losing streak you can still be in the game.
Here’s one more example of the Drawdown:
10% lost -> you need to win 11% to break even, 20% lost -> 25% to break even, 50% -> 100% to break even, 80% -> 400% to break even, 90% -> 900% to break even, and etc. Do you see the pattern?
The more you lose the more you need to break even. I hope by now you got the idea that you need to risk only a small amount of your account.
Alright you got that,hopefully, now you need to know the kind of bets you will be taking. There’s something called Risk-to-Reward ratio. Be sure that your risk-reward ratio is always around 3:1. This means that for every buck that you stake, you must be waiting for at least 3 in profit. So your betting slip will need combined odds of at least 4.00 in decimal.
Let’s say you bet on such odds 10 times, you lost 7 and won 3 times. Can you calculate what you have lost?Wait what nothing? That’s right. You lost 7 timed x 10€ and you won 3 times x 30€ so you made an extra 20€. Now do you see that you don’t have to be correct 100% of the time? You don’t even have to be correct 50% of the time. Pretty cool eh?
So let’s sum up everything that we talked about here:
Drawdown WILL get to you at some point. The less you risk the less the drawdown will be.
The more you lose from your account the harder to break even.
Bet only small percentages of your money 2%-3% max.
Bet if possible on higher Risk-to-Reward ratio. The higher it is, the less right you have to be.
Do you feel ready now to start your football betting journey? If yes , head to the Sportsbook Reviews Section, read about the brands you have chosen, pick the one that suits you best and register.