Some observations:
- If you don't have an edge, the best money management will be to minimize your bets and unit size. No matter how you manage your money, your bankroll will dwindle.
- That being said, if you have a slight edge, note that a typical account will still have swings of +/- 20 units or more. This is just due to the volatility of the betting world.
- Thus if you have $1000 in your account, the "noise" and randomness of even betting as little as $50 a unit will cause your account to scrape the bottom from time to time.
- I often think of my bankroll in two pieces: what I have in active accounts (my "active bankroll"), and what I have "in reserve" to back up the "sports investing" activity in the near-term ("near-term bankroll").
- To withstand the impact of volatility and randomness, I use about 5% of the "active bankroll" or about 3% of the "near-term bankroll" as my unit size.
- To some, this may seem small and not very exciting, but sports betting is a "double-or-nothing" investment exercise. You either win your bet (and almost double your money) -- or lose the entire bet. Thus, even 5 losses in a row, at 5% per bet -- can lose 25% of your "active bankroll."
- If you practice good money management activities, you will be able to stick to your guns in time for your approach's upswing -- and won't feel the pressure to reduce your bet size at the worst possible time.
