Bankroll management: The key to success.

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I’m not sure if I’ve written an article regarding this explicitly, but I’m seeing so many tweets recently from people; unhappy that the tipster they are following lost a 2/3 point bet or is 10 points down and frankly, the answer is and should always be ‘manage your bankroll and your expectations and the profit will follow’.

See, the key to making money in this business is easy. You need the following:

  • An edge (value, knowledge or both)
  • A bankroll
  • An understanding on how to manage that bankroll
  • Patience and an emotionally detached viewpoint.

With just one of those missing, you will never make money. It’s a simple fact.

No edge? Overround wins

No bankroll? No sustainability

No management of bankroll? Same as above

No patience? Loss chasing, tipster swapping, portfolio abandonment – you name it.

So what is effective bankroll management? This is what we want to know, right? The real nitty gritty? Or otherwise titled ‘how I make money Mark please’

It’s the understanding of drawdown and variance, swings and roundabouts, upturns and downturns.

Long term readers (If you exist) know I like to put things across as simple as possible and then expand on them at a later date, so I’ll do just that.

Here’s a task for you:

Next tipster you’re going to follow. Ask him the following questions:

What is your recommended bank size

What is your maximum drawdown

What is your longest time to return to a profitable state (bonus points if they answer this because frankly, it’s super cool)

Take the figures they give you and a figure you’re happy to lose. Say, 100 points and £100. Divide them (£100 divided by 100 points) and use that as your 1 unit (1 point stake- £1)

Then don’t. Deviate, at all. Do not chase losses. Do not be concerned about point drawdown, do not message the tipster with torrents of abuse. Just sit back, do your betting and develop the skills and patience needed for a long term viable portfolio. It can be done, I know! I liase with people who have been successfully doing it for years on a daily basis!

I’ll go into all of these in detail at a later date (because it’s a huge article needed) – suffice to say, bankroll management is absolutely key to a viable investment gambler. Fact.

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