Bankroll Management
Definition
Bankroll management is the practice of setting aside a dedicated sum of money for betting and following strict rules on how much to wager per bet. Proper bankroll management protects you from going broke during inevitable losing streaks and ensures long-term survival.
Example
A common rule is to never risk more than 1-3% of your bankroll on a single bet. With a $5,000 bankroll, each bet would be between $50 and $150, regardless of how confident you feel.
Related Terms
Kelly Criterion
StakingThe Kelly Criterion is a mathematical formula that determines the optimal fraction of your bankroll to wager on a bet with positive expected value. It maximizes long-term growth rate while minimizing the risk of ruin. Many bettors use fractional Kelly (e.g., half or quarter Kelly) to reduce variance.
Unit Size
StakingA unit is a standardized bet size expressed as a percentage or fixed amount of your bankroll. Using units allows bettors to compare performance regardless of bankroll size and helps maintain discipline in staking.
Staking Plan
StakingA staking plan is a systematic approach to determining bet size. Popular plans include flat staking (same amount every bet), proportional staking (percentage of current bankroll), and Kelly staking (optimal fraction based on edge). The choice of plan affects both expected growth and variance.
Flat Betting
StakingFlat betting means wagering the same fixed amount on every bet regardless of perceived edge or confidence. It is the simplest staking strategy and is popular because it limits downside risk and removes emotional decision-making from bet sizing.
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