STAKE SIZE STRATEGIES

Bet size strategies are crucial for gamblers looking to maximize their winnings and minimize losses. Whether you’re playing poker, blackjack, or betting on sports, understanding how to manage your bets can significantly impact your overall success.

There are numerous different strategies out there to try, I have chosen to go through some of the most common ones and simulate them on my picks in 2024 so far (until 27 of September 2024).

Flat Betting Strategy

• Definition: This strategy involves placing the same amount of money on each bet, regardless of the outcome of previous bets.
• Advantages: Simple to implement, reduces the risk of large losses.
• Disadvantages: May not maximize potential winnings

Proportional Betting

• Definition: This strategy involves betting a fixed percentage of your bankroll on each bet.
• Advantages: Scales with your bankroll and reduces the risk of going bust.
• Disadvantages: Requires careful tracking of your bankroll, risk of lowering the actual yield because you bet with smaller stakes after some losses.

Kelly Criterion

• Definition: This strategy involves calculating the optimal bet size based on the probability of winning and the odds offered.
• Advantages: Maximizes long-term growth of your bankroll.
• Disadvantages: Requires accurate estimation of probabilities, can be complex to calculate. Volatile.

Odds variable

• Definition: This strategy is a variant of proportional betting, but you also consider the size of the odds.
• Advantages: You scale up/down as your bankroll changes.
• Disadvantages: Risk of lowering the actual yield because you bet with smaller stakes after some losses.

In my simulation all strategies start with a bank of 100 and the stake size is defined as:

Flat betting = 1

Proportional = 1% * BANK

Kelly Criterion = 20% * ((ODDS-1)*(1/ODDS*1,04)-(1-1/ODDS*1,04))/(ODDS-1)*BANK

(This means that I am using expected yield 4% for all bets and a fraction of Kelly 20% to reduce variance)

Odds variable = 1/ODDS * 2% * BANK

At a first glance the proportional strategy seems to be outstanding, but it all depends on what you preferer – Maximize winning or minimize variance! In all the strategies except FLAT you turn over more money as you bank grows, BUT that comes with a cost on the yield.

Table. Accumulated profit/loss for the different strategies

Using Kelly or Odds variable cuts your yield by half! The reason is that when you have had a losing run, your bank is smaller and your new stake is smaller meaning you must win a few more "extra" bets to get back where you were.

Also remember that this is only one simulation, if you have other characteristics in your betting history then the output is probably also different.

Conclusion

Choosing the right bet size strategy depends on your risk tolerance, bankroll size, and the type of game you’re playing. By understanding and applying these strategies, you can improve your chances of success and make more informed betting decisions. I recommend you try different strategies to find out your preferred choose, you can also try to simulate on my historic picks which are available for you in this Excel.