Staking Method to Directly Influence Profitability of Betting

Profit-making in the gambling industry depends upon two factors: preponderance over a bookmaker and a well-organized staking method. The given article tells us about possible profitability and bankruptcy risk resulted from using five main staking methods.

Previously, it was proved that a sum of money you stake is actually more important than events you bet on are. It is clear that absence of the positive Expected Value will make any money management system completely useless. Nevertheless, some staking methods are naturally riskier than others are. That is why the ability to distinguish them can be rather advantageous for usual gamblers.

Staking methods should be analyzed under the same circumstances. Thus, we should consider 10 000 runs of 500 simulated bets with the odds of 2.0. The Expected Value is 10%, which means that wagers will be successful in 55% times. A gambler`s bankroll amounts to $1 000, with the first stake being $100 (the only exception is found with All-in staking method where the entire bankroll is placed at once). Here, we will analyze such staking methods as All-in, Fixed Wager, Martingale, Fibonacci, and Proportional Wager. Understanding a risk to go bankrupt and probability to obtain any benefits results in the fact that a bettor will be able to absorb interests.

Five Staking Methods Explained

As it is expected, an All-in staking method always leads to a catastrophe. Winning probability in 500 successive binary wagers (each of which has 55% probability of success) amounts to 1.52*10-130. To completely understand the given figure, let us consider an example. If you had a possibility to repeat a set of 500 wagers every second, you would not have enough time to achieve a win streak till the Universe disappearance that is supposed to happen in 10100 years.

Naturally, a greater part of gamblers does not stake their entire bankroll at once. With this, numerous bettors strive to cover previous losses by increasing their stakes amount on events with a favorable outcome. Both Martingale and Fibonacci systems are said to be progressive staking methods.

Under Martingale system, a stake is doubled after every loss, while a win will result in the fact that a stake should be the same as it was for the first time. It is clear that several consecutive losses can lead to enormously high stakes that, in their turn, increase a danger to lose the entire bankroll.

On the other hand, the Fibonacci system is not so radical. In accordance with this system, every stake is a sum of two previous ones (2, 2, 4, 6, 10, and so on). A win signals that you should move back two numbers in a row. In this case, every win compensates for two previous losses.

Unfortunately, no staking system provides bettors with a necessary level of safety. In most cases, a bettor using Martingale system will lose everything before he manages to place 500 wagers. As for those dealing with the Fibonacci system, this result has a 50% probability to occur.

According to statistics, a usual bankroll will be 0 until the end of betting. Moreover, we do not even consider a possibility that the given systems can result in a fact that bettors would face a need to cover the previous losses and place a stake that exceeds bookmaker`s limits.

Advantages of Fixed and Proportional Wagers

It is generally acknowledged that Fixed and Proportional Wagers are the best staking methods. Proportional Wagers manifest themselves in placing a stake that is calculated as a percent (here, it is 10%) from an entire bankroll. Thus, if the first bet of $100 manages to be successful, the second one will amount to $110. The given formula works also in opposite direction. If the first wager fails to generate benefits, the second one will be a $90 stake.

Under the given scenario, both Fixed and Proportional Wagers imply a strong probability to obtain some benefits after 500 bets. An obvious advantage of Proportional Wagers over Fixed ones is represented by the fact that it will not be theoretically possible for you to go bankrupt. However, losing attempts can result in rather small stakes. Besides, an expected final bankroll will be much higher because you will stake greater sums in comparison with those placed under Fixed Wagers.

Staking Method & Chances to Go Bankrupt

However, the Expected Value of 10% in betting is quite rare for a long run. Far from every gambler obtains such benefits in the given sphere. It should be clear that a different Expected Value can influence profitability and bankruptcy risks for each staking method.

So, the progressive systems feature the biggest risk, while Fixed Wagers show rather better results in the cases when you do not have the edge over your bookmaker. In practice, it is proved by the fact that, under the circumstances of a slight edge, Fixed Wagers provide bettors with really better chances to gain some benefits after 500 bets, than Proportional Wagers do.

Mainly, it is explained by the situation that Proportional Wagers require a longer period of time to cover previous losses compared to Fixed Wagers. In fact, it is the main peculiarity of the strategy that deprives you of a possibility to lose all of the money.

Over the long run, the progressive staking methods can be potentially more lucrative and safer than Fixed Wagers are, but a short-term outlook sees them hardly contribute to successful betting. In other words, you obtain a large sum of money in case of a win, but a loss requires more time to recover.

Stake Amount & Winning Probability

While the progressive staking methods are naturally riskier, some bettors preferring Fixed Wagers cannot afford themselves to bet with a 13% danger to go bankrupt. That is why it should be analyzed how smaller stakes can influence risks for each strategy.

Understandably, lower stakes in relation to a bankroll decrease a risk to go bankrupt and increase the winning probability, though an amount of possible final bankroll also becomes lower. To put differently, if you want to obtain higher profits, you have to take a greater risk. Nevertheless, those who are courageous (or silly) enough to follow Martingale system will obviously face a 50% probability to lose everything before they manage to place 500 wagers if their initial stake is $20. Moreover, the given probability will be 5% even if they start their betting from $1.

The Most Suitable Staking Method for You

According to everything stated above, we can draw certain conclusions. First of all, all the progressive staking methods are strongly connected with risk. Even if you have a visible edge over a bookmaker, there is still a strong probability to lose everything trying to cover previous losses, unless you significantly reduce your stakes. In this case, ambition to recoup is said to have little sense. If you are quite successful and beat your bookmaker, there is no need for you to cover previous losses.

Secondly, when you have a significant edge over a bookmaker or if you consider an importance of stake amount, Fixed Wagers can provide you with the possibility to obtain long-term benefits under the circumstance of minimal risks.

Finally, Proportional Wagers can be considered as a panacea in the betting world. To tell the truth, such an attitude is explained by the fact that using this staking method almost eliminates chances to go bankrupt. However, compared to Fixed Wagers, the given method implies a long period of time for you to recover losses. If you are ready to wait, the Proportional Wagers might be suitable for you. On the other hand, if such a thing as short-term profits is rather important for you, it would be better to use simple Fixed Wagers.