The ordinary bettor probably decides his betting stakes in accordance with what he can afford at any particular time, but the more serious gambler usually has some sort of plan with regard to staking in order to maximise success over the long term.
It is generally agreed I think that level staking or cautious compounding are the best way to go, but we will look at various different types of staking plans to get a better overall understanding. The type of stake employed is influenced largely by the odds on offer, and the strike rate, i.e. how often your bets are successful. Some bettors prefer a low odds with higher strike rate approach whilst a few go for longer odds with a much lower strike rate but bigger profits on their wins. Which ever route you take probably depends largely on your personality but I certainly prefer not to go for long periods without a win.
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With level staking you are betting the same amount on each bet, regardless of the odds. Your stake size should be considered in the light of your size of bank and be small enough to allow for a good number of losing bets before your bank is wiped out. So with a bank of £100,for example, a 5% or £5 bet stake would be considered reasonable, since you would have to lose 20 consecutive bets to lose the whole bank, and this you would think is most unlikely.
Once described as the eight wonder of the world compounding can indeed be of great help when betting solely on low odds events. You should have a high strike rate this way and be able to make small but fairly reliable profits over time, whether betting on motor racing just to place rather than win, or on over 1.5 goals with football teams you know can rack up high scores on a regular basis. The idea is simply to increase your stakes by a small amount each time, or perhaps more cautiously, not even each time but perhaps at the end of a successful week or month. Gradually, with compounding a small bank can grow into something substantial over a period of months, and without undue risk or heartache.
The Fibonacci sequence was apparently discovered or created in the early 13th century by an Italian mathematician called Bigolio, and although he may never have thought of using it for betting, it is thus often employed by bettors nowadays. The series starts with 0, 1, and then each successive number is the sum of the previous two. Thus the series continues as 1, 2, 3, 5, 8, 13, 21...and so on.
When betting with this system you start at 1 using a small stake, and then increase your stake amount according to the numbers sequence if you lose. This means that you can afford to lose six or seven bets in a row and still profit overall with one big win the next time. The problem arises however if you get too far down the sequence by losing every bet so far, that then the stakes become impossibly large. The idea can, however, perhaps be put to good use where you have a sport which is very unpredictable by nature, like football or greyhound racing for example, since you are almost guaranteed to get a winner within ten shots whilst betting on very low odds events. You could bet on football games going over or under 2.5 goals at odds near to 2.0, or on short priced greyhound favourites to lose. Low odds keep your liability within reasonable bounds.
The Martingale system has been around for a couple of centuries and simply advocates doubling the size of your bet following a loss. The idea was reasonable when it was invented for tossing a coin since the odds are 50/50 for a win. It has though, been advocated for roulette betting but this is definitely ill advised. The odds on roulette are certainly not so good because of the in-built house edge, and if doubling up your stakes you would quite soon hit the house limit on most tables which would not allow you to double further. This simple system has also been used for horse racing but even then your stakes would soon get out of control after a few losers.
The idea here is to determine your optimum stake by taking note of odds and probabilities. The formula is: f* = (bp – q) / b where f* is the fraction of your present bank, b is the odds in decimal form, or p in fractional form, p is probability of winning, and q is probability of losing.
The big problem here is being able to work out the true probability of winning. This can be difficult unless you really know your sport inside out.
The truth is, and it has often been said, that no staking plan can make up for bad selections. Another good tip is that if you cannot make a profit with level staking then you are doing something wrong. Level staking is the safest type. It limits your losses, and you know where you are. If you combine level staking with gradual compounding then you are a most sensible bettor.
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