Successful sports trading in Betfair or any other online betting exchange depends a lot on proper money management. It may only seem important to pick up the online betting odds movements correctly, but applying money management in trading the online betting odds will make money for serious sports traders. If we are just starting out trading the odds, managing our betting bankroll will certainly make us last a lot longer in this trading game.
To begin with let us try and define what a Bank is in the Sport trading business. Yes this is a business and the earlier you see it this way, the better.
So what is a Betting Bank?
A betting bank or simply called the BANK is a sum of money we put aside (money which we can afford to lose) and is used exclusively for our betting or trading. It can be as big or as small as we like. A betting bank can be used in a number of ways. A popular method is to divide it into points and this is referred to as money management in the betting business. Yes this is a business like I said and you have to see it as such if you want to be successful with it.
What is Bank Management?
This refers to the way you use or manage our betting bank so that it grows instead of depleting or getting wiped out completely.
What is the importance?
This is so important because without your betting bank, you cannot trade or bet. Betfair or any of the betting exchanges will never allow you to trade without money. You have to have money in your trading account and the money for every trade will be deducted in advance and held by the exchange. Only at the conclusion of the trade or event will the money be returned to your acct depending on if you are successful. If you are not successful with your trade, the money is gone. So without your betting bank, you cannot trade. So you can see how important it is to manage your bank well. In sports betting, your inventory is your cash. If you run out of cash, you are out of business.
How to manage your bank
Divide your bank by 40 or 50. This means 2.0% – 2.5%. This is what you will use in trading. If you are Laying first, make sure that when you lay with this 2.0 – 2.5%, your exposure or risk is not more than 10% of your bank. And If you are Backing first, then make sure you do not use more than 10% of your bank as your bet. Doing this will ensure that you preserve your bank.
This simple explanation above took me a long time to understand. As a result I blew three banks because I was not applying this well. I wish I had a close teacher then. What I was doing was to first Lay with 10% of my bank and when you translate this into the Lay odds of say 3.60, it meant I was exposed to over 30% of my bank (oh I shake my head at this now). When it appeared the trade was not going as expected, it made me panic and place bets that were not necessary. Just one or two loses and my bank was almost empty. I had to learn this the head way. Do not be like me. Learn well from my instructions above. You can read the article as many times as you need to understand it. It will form one of the core lessons that will be with you in your trading.
Why must I manage my Bank?
I had to add this one to drive home my points. Remember the saying that If you fail to plan, then you plan to fail. It is as simple as this. We should always have a plan in this life if we are going to succeed.
Imagine a Trader without a plan for his bank. He will trade twice with small random amounts and succeed. Then he decides to risk all his money on a trade which goes wrong. What happens? He has lost even the ones he won earlier.
Let’s also look at another example. He trades twice with big amounts and the trades did not go well. The third time, he decides to go with the least amount in Betfair which is $4. The third trade was successful but alas he did it with the smallest amount having lost his first two trades.
So you can see the importance of having a plan and sticking tp it.
I wish you well with your BANK.