The purpose of a staking plan is to intelligently place bets in order to maximize the growth of a “Betting Bank” while lowering the risk of losing it completely. Generally, frequent bettors will employ staking plans to capitalize on a small success, turning minor winnings into more significant amounts. Some plans are more focused around conservatively attempting to increase one’s profit, while others are far more aggressive.
Before deciding on a staking plan let’s put a gambler’s myth to bed. No staking plan is going to turn a losing system or bet selection method into a winning one. If making bad value bets you will be a long term loser regardless of witch staking plan you use. The flip side is that if you are getting value on your bets, the right staking plan will grow you betting bank faster, meaning greater profits.
Major Types of Staking
Most staking plans define bets through one of three methods, though specific details may vary. These plans form the basis for most other plans, and can be altered or amended as desired to produce specific strategies.
- The first of these methods is to simply keep the bet the same without regard to growth or loss of money. This is referred to as fixed staking, and is naturally the least complex method.
- The second type of staking plan aims to cautiously increase the margin of profit while minimizing potential losses. This method, called variable staking, results in the same amount of money gained with each successful bet. Bets are calculated based on the desired winnings, meaning that it’s completely independent of how much money is in the reserve or in the bank. This type of staking plan is excellent for those who wish to spread bets over a large number of odds at low risk. So if you bet high odds at horse racing and low odds football matches this would be a suitable method.
- Finally, the third plan is staking a percentage. The percent can apply to either the bank or the reserve (the amount of money gained in winnings and/or set aside as an acceptable loss). Despite the sum (or difference) in money changing with each successive bet, the percentage of money wagered is meant to remain static. More advanced percentage based staking plans vary the percentage based on several factors, making it the riskiest of all methods.
The simplest of all staking plans is level staking. Under this plan, a portion of one’s total money (or reserve) is declared. Each wager, regardless of how much is won or lost, is exactly this amount. In order to maximize profit or minimize loss, the static amount can be reassessed at any point (such as the 50th or 100th bet). Level staking is almost a direct representation of the fixed staking method.
Although highly impractical for extended periods of time, the Martingale method is a high risk, small reward plan sequence. Unlike the others, this one is geared towards winning back lost money (along with a single unit stake profit with each sequence of bets). Each time a bet is lost, either its odds or stake are doubled; if the bet is won, the player will earn enough money to return to their initial betting bank along with an extra unit stake profit. Obviously this can spiral out of control very quickly if the player loses just a few bets in a row. This method is more successful in sports betting where there is a chance of a punter finding value in a bet. But our opinion of Martingale is the risks far outweigh the rewards and as there are better staking plans available it is best to give a miss.
The Kelly Criterion
Often simply referred to as Kelly Staking, this method is more complex than all of the previous examples. Bets in this plan are calculated using the following formula: W = (OP-L)/O. The variable W represents the final wager calculated from the formula. This number is a percentage of one’s total capital (or, again, the reserve amount from winnings). Variable O represents the odds of a specific wager in decimal form. Variable P indicates the chance of that wager winning, again in decimal form. This value is usually determined by the bettor’s own system (or by adopting another already established system). Finally, variable L is the probability of losing.
Kelly Staking is plagued by two major flaws, the first of which is a matter of human error. Since the probability of success and failure is left to the bettor’s judgment, there is a significant potential for this number to be far from its actual value. Many factors besides chance come into play for sports betting that are simply not present in other forms of gambling. Human nature suggests that most people will mentally inflate their chances of winning, resulting in a higher overall bet. As such, it’s generally recommended that anyone utilizing the Kelly Criterion lowers their final wager to compensate.
The second major flaw is that this method, regardless of error, can produce extremely unstable results. Since the final wager is a percentage, the amount bet can increase exponentially after a few lucky bets; at this point, one loss will be far more dramatic than it would have been at the start. Betting less than the final wager lessens the impact of potential losses. Nonetheless, Kelly Staking has been mathematically proven to be successful over long-term automated tests. This of course assumes a fixed probability which, as was previously mentioned, simply does not exist in sports.