How to manage your bankroll
One of the most important aspects of achieving success and longevity with your punting is the ability to manage a bankroll. This article will explore the importance of bankroll management and how you should go about it.
Bankroll management
For those new to betting a question that is often raised is “what is a unit”, and similarly, “what should my unit be”? Those who are familiar with tipping services would be accustomed to seeing selections tipped with a unit amount, but why is it important?
A unit represents a percentage of your bankroll and is used as a universal measurement to calculate the size of your bet. Your bankroll is the total amount of money you set aside for your betting. Best practice is to maintain a bankroll of 100 units – for example, if your initial bankroll is $5,000, one unit would be equal to $50 (i.e. $5,000 ÷ 100 units = $50), or 1% of your bankroll. Stakes for this service will typically range from between 0.25 units up to a maximum of 2.5 units, or 2.5% of your bankroll. These stakes are based on the confidence in a particular outcome and the probability of that outcome occurring, together with the perceived value opportunity (the difference between what the tipper has priced the horse at and what price is being offered by bookmakers), rather than arbitrarily plucking a number out of thin air.
The amount of bankroll will differ from person to person, therefore unit betting allows a tipper to communicate their level of confidence for a particular selection, and allows the punter to stake the appropriate amount relative to the size of their individual bankroll.
You should always try to maintain a bankroll of 100 units. This means that you should adjust your unit downwards if your bankroll decreases, and similarly, adjust upwards as your bankroll increases. For example, if your bankroll increases from $5,000 to $7,500 after a series of positive results, your unit should increase from $50 to $75.
We strongly advise that you follow this staking strategy as it can make a huge difference to your profitability over the long term – success comes to those who are patient and disciplined in following their strategy.
Staking strategy
We all know that losing runs occur in betting – returns do not follow a straight line and it is inevitable that over a long period of time there will be occasions where you experience a series of losses. It is critical not to let short-term fluctuations affect your long-term strategy. Trust the process.
This is where the importance of discipline with your staking strategy and managing your bankroll really comes into play. Utilising a staking strategy, based on unit betting, means that you can sustain a series of losses without “blowing up” your bankroll. It allows you to apply a systematic, process-driven approach to your betting that gives you the best chance of yielding positive results over an extended period of time.
Remember, this is a long game and those who chase short-term gains over long-term profitability by letting their emotions dictate their staking will often find themselves frustrated. It is important to stay disciplined to your strategy and to stay in the game for as long as possible. This is harder said than done, particularly after a series of losses, but you give yourself the greatest chance of success once you can develop this mindset and maintain that level of discipline. Eventually, over time, the percentages will work in your favour.
The psychology of betting
Racing and betting in general can certainly test one’s patience and mental fortitude – by its very nature, there will be highs and lows. How you deal with these from a mental perspective will be a huge factor in your long-term success. You can’t control what happens in a race, but you can control what matters most – your actions. Psychology and mindset matter a lot more than people think.
You can be the best analyst in the world, and you can have the best betting strategy – but if your mindset is not calibrated to fit the realities of betting on racing, you’re going to struggle. Doing well as a punter isn’t necessarily about what you know – it’s about how you behave. To become a successful long-term punter, you need to understand and overcome the cognitive/psychological biases that often lead to poor decisions. Humans have a strong bias towards immediacy, but the market rewards patience and discipline. Some relevant cognitive biases include: Confirmation bias, Anchoring bias, Neglect of probability and the Bandwagon effect.
Your goal as a punter should be to develop “equanimity” (calmness and composure, especially in a difficult situation) so that you stop reacting blindly, purely out of emotions and impulse, rather than logic and strategy. When you remain calm you have clarity of thought. Fear and greed is what the amateurs suffer from – to overcome fear and greed you need a disciplined mind and a proven process. What often destroys weeks and months of progress and hard-earned profits is chasing some quick profits in an unstructured way. Without a clear strategy and a deep commitment to it, your moods and emotions will tend to determine what actions you take.
Racing can be a cruel and unforgiving game sometimes and people can convince themselves that everything is working against them – if you’re going through a string of losses, no matter how bad it looks or painful it feels, it is important to remind yourself that no storm lasts forever. If you’re following a proven process and staking responsibly (which we aim to provide in this service), the numbers will eventually work themselves out. When you ignore your reliable and repeatable process in the heat of the moment because of some short-term emotional changes of mind, you set yourself up for failure.
Pause to consider what’s a “gamble” before you burn through your previous hard-earned profits, and develop the awareness to notice when your emotions are telling you to do something you know you’ll regret. If a bet has the potential to hurt you given its size, of course you’ll be emotionally invested – your mindset will be compromised.
It is also important to come to terms with the fact that losses are an unavoidable part of this business. Do not allow yourself to become bitter because of them. Your betting profits don’t go up in a straight line and setbacks are part of the process. When losses begin to inform you instead of crushing your spirit, you’ve separated yourself from the pack. An individual loss, when following a strategy, should not make you overly miserable when you are playing the long game over hundreds or thousands of bets. On the other side of the coin, a big win should not make you overly ecstatic. After a period of winning, it’s very easy to let the ego get in the driver’s seat. The moment you get cocky is the moment the market is likely about to serve you a good slice of humble pie.
If you want to be a consistently profitable punter, you need to learn to minimise your emotional involvement and experience both losses and profits with stability of mind. You need to train yourself to not get too caught up in short-term results – the most successful people are long-term thinkers.
In summary, be the master of your emotions instead of letting previous results or outside events define them for you. Be patient and process driven. And whatever must happen, will happen – whatever is due to you, will flow to you…in its own time. When you’re calm, patient and unperturbed, the journey becomes much more profitable and enjoyable. And most importantly, take care of yourself and have fun.
Track your results
To be successful and achieve a positive betting outcome in the great game, it is imperative that you track and record all of your results.
Tracking results will assist you in identifying exactly how much you are winning/losing and will help identify trends that can assist you in maximising your overall profits.
If you are unsure where to start, please download our complimentary Results Template below. The instructions on how to use are enclosed within the spreadsheet.
Download Results Template – xlsx.
Download Results Template – Google sheets (File > Make a copy)