Introduction
Winning long-term isn’t only about finding edges—it’s also about sizing your bets so you can survive variance and compound gains. This guide covers risk, bet size comfort levels, and how small edges add up.
Understanding statistical variance.
The Mathematics of Survival
Before you can win long-term, you must survive short-term variance. Even with a 55% win rate (excellent by sports betting standards), losing streaks are inevitable:
Statistical Reality Check:
- 55% winner has 8.3% chance of 5 straight losses
- 20% chance of being down after 100 bets
- 5% chance of losing 10+ units in worst drawdown
- Maximum drawdown typically 15-25 units
Without proper bankroll management, these natural swings will bust you before your edge manifests.
Risk of Ruin Calculations
Risk of Ruin (RoR) is the probability of losing your entire bankroll. Here's how bet sizing affects your survival:
Flat Betting 1% of Bankroll:
- 55% win rate, -110 odds
- Risk of ruin: ~0.01%
- Expected bankroll growth: 4.5% monthly
- Time to double: ~16 months
Flat Betting 2% of Bankroll:
- Same parameters
- Risk of ruin: ~0.5%
- Expected growth: 9% monthly
- Time to double: ~8 months
Flat Betting 5% of Bankroll:
- Same parameters
- Risk of ruin: ~13%
- Expected growth: 22% monthly (if you survive)
- Time to double: ~3 months (87% success rate)
Building Your Initial Bankroll
The Minimum Viable Bankroll:
- Absolute minimum: $500 (limits options severely)
- Recommended starter: $1,000-2,500
- Comfortable operating: $5,000+
- Professional level: $25,000+
Bankroll Building Strategies:
- Start with sign-up bonuses - Risk-free bets and deposit matches
- Focus on low holds initially - Preserve capital while learning
- Reinvest all profits - Compound growth in early stages
- Add monthly deposits - Treat like investment contributions
- Track meticulously - Know your true ROI
Unit Sizing Systems
Flat Betting (Recommended for Beginners):
- Bet same amount regardless of confidence
- Typically 1-2% of bankroll
- Pros: Simple, controls risk
- Cons: Doesn't maximize EV on best bets
Variable Betting (Intermediate):
- 1% for standard plays
- 2% for high-confidence plays
- 0.5% for experimental/learning bets
- Requires accurate confidence assessment
Kelly Criterion (Advanced):
- Mathematically optimal growth
- Full Kelly often too aggressive
- Quarter Kelly (0.25x) recommended
- Adjusts based on edge and odds
Separate Bankrolls Strategy
Why Multiple Bankrolls?
Different bet types have different variance profiles:
Straight Bets Bankroll (70% of total):
- Spreads, totals, moneylines
- Lower variance, steady growth
- 1-2% unit sizing
Props/Parlays Bankroll (20% of total):
- Higher variance plays
- 0.5-1% unit sizing
- Mental accounting for "lottery tickets"
Futures Bankroll (10% of total):
- Season-long investments
- Can't compound quickly
- 2-5% of this bankroll per play
The Mathematics of Survival
Before you can win long-term, you must survive short-term variance. Even with a 55% win rate (excellent by sports betting standards), losing streaks are inevitable:
Statistical Reality Check:
- 55% winner has 8.3% chance of 5 straight losses
- 20% chance of being down after 100 bets
- 5% chance of losing 10+ units in worst drawdown
- Maximum drawdown typically 15-25 units
Without proper bankroll management, these natural swings will bust you before your edge manifests.
Risk of Ruin Calculations
Risk of Ruin (RoR) is the probability of losing your entire bankroll. Here's how bet sizing affects your survival:
Flat Betting 1% of Bankroll:
- 55% win rate, -110 odds
- Risk of ruin: ~0.01%
- Expected bankroll growth: 4.5% monthly
- Time to double: ~16 months
Flat Betting 2% of Bankroll:
- Same parameters
- Risk of ruin: ~0.5%
- Expected growth: 9% monthly
- Time to double: ~8 months
Flat Betting 5% of Bankroll:
- Same parameters
- Risk of ruin: ~13%
- Expected growth: 22% monthly (if you survive)
- Time to double: ~3 months (87% success rate)
Building Your Initial Bankroll
The Minimum Viable Bankroll:
- Absolute minimum: $500 (limits options severely)
- Recommended starter: $1,000-2,500
- Comfortable operating: $5,000+
- Professional level: $25,000+
Bankroll Building Strategies:
- Start with sign-up bonuses - Risk-free bets and deposit matches
- Focus on low holds initially - Preserve capital while learning
- Reinvest all profits - Compound growth in early stages
- Add monthly deposits - Treat like investment contributions
- Track meticulously - Know your true ROI
Unit Sizing Systems
Flat Betting (Recommended for Beginners):
- Bet same amount regardless of confidence
- Typically 1-2% of bankroll
- Pros: Simple, controls risk
- Cons: Doesn't maximize EV on best bets
Variable Betting (Intermediate):
- 1% for standard plays
- 2% for high-confidence plays
- 0.5% for experimental/learning bets
- Requires accurate confidence assessment
Kelly Criterion (Advanced):
- Mathematically optimal growth
- Full Kelly often too aggressive
- Quarter Kelly (0.25x) recommended
- Adjusts based on edge and odds
Separate Bankrolls Strategy
Why Multiple Bankrolls?
Different bet types have different variance profiles:
Straight Bets Bankroll (70% of total):
- Spreads, totals, moneylines
- Lower variance, steady growth
- 1-2% unit sizing
Props/Parlays Bankroll (20% of total):
- Higher variance plays
- 0.5-1% unit sizing
- Mental accounting for "lottery tickets"
Futures Bankroll (10% of total):
- Season-long investments
- Can't compound quickly
- 2-5% of this bankroll per play
Risk and Comfort Levels
- Very Conservative: Small, steady bet sizes; prioritize protecting bankroll.
- Moderate: Balance between growth and volatility.
- Aggressive: Larger swings; suitable only if you accept deeper drawdowns.
Your risk tolerance should reflect your income stability, goals, and emotional comfort with losing streaks.
Kelly Criterion at a High Level
OddsTide uses the Kelly Criterion behind the scenes to provide recommended bet sizes on +EV bets.
The Kelly Criterion was developed by John L. Kelly Jr. at Bell Labs.
- Kelly ties stake size to edge and odds, aiming to maximize long-term growth while avoiding over-betting.
- You don’t need the math here—just understand that higher edge → larger recommended bet (within reason).
Why Small Edges Add Up
Even modest edges (e.g., 1–3% EV) compound when applied repeatedly with disciplined staking. Volume + patience + consistency can drive results.
Growing Bankrolls & When to Adjust
As you win or add funds, your bankroll changes—so should your stake sizes. Consider adjustments when:
- Your bankroll grows/shrinks materially.
- Your risk tolerance changes.
- Your market focus shifts (e.g., from sides to props).
We’ll cover adjustment methods in our advanced bankroll guide.
Frequently Asked Questions
How much bankroll do I need to start betting professionally?
Start with at least $1,000-2,500 for serious betting. This allows proper unit sizing (1-2% per bet) and weathering of inevitable downswings. You can start smaller while learning, but undercapitalization leads to poor decisions.
What's the best staking strategy for beginners?
Start with flat betting at 1% of bankroll per bet. As you gain experience and prove profitability, consider Kelly Criterion at 0.25x (quarter Kelly) for optimal growth with managed risk.
How do I handle losing streaks?
Never chase losses or increase bet sizes during downswings. Stick to your predetermined unit size. If you lose 30% of bankroll, consider dropping down in stakes until you rebuild.
Should I have separate bankrolls for different bet types?
Yes, consider separate bankrolls for straight bets, parlays, and futures. This prevents one strategy's variance from affecting others and helps track performance accurately.
When should I withdraw profits?
Set a schedule (monthly/quarterly) to withdraw a percentage of profits (like 50%). This ensures you're actually profiting while maintaining bankroll growth. Never withdraw during downswings.
Final Thoughts
Set realistic goals, respect variance, and let Kelly-derived recommendations guide stake sizes. With time, discipline and small edges are the engine of sustainable growth.