## Money management

A money management system allows you to earn a profit out of your winning percentage. Professional gamblers use systems like these to maximize profits while decreasing the risks involved.

Another reason was put up by Paul Paulson, author of Money and the Middle Man. He believes that money management systems are for the bettor to comfortably utilize, and not maximize, his edge. He reasons that the more you optimize your bet size system, the larger your potential draws down.

Take for example wagering with a $10,000 bankroll.

If you optimize your bet, you might draw your account down by over 30%. When this happens, most players would stop using this system and try a different one. Statistically, even a system with a high positive expected value would still have large streaks of winning and losing.

The point is to minimize your drawdowns to a comfortable level by using the right bet size so that even after a string of losses, you can still move forward and gain positive expectation. **Proper money management** could be determined if you bet just the right amount so that each bet has no significant emotional effect.

Losing must be expected and planned accordingly so that psychologically, a player should be able to weather a series of losses to gain profits later. Basically, the money management system sets each bet to be within a level comfortable enough that you could withstand losing that bet. Of course, it should be in relation to your bankroll so you could stick with your system long enough to see if it works.

There are lots of methods that can be used, like the popular ‘percentage of bankroll’ in which the player risks a percentage of his bankroll. A 2% ratio for the bet is ideal to avoid large losses. So for a $10,000 bankroll, your first bet would be $200.

Let’s assume that you have a 60% probability of winning which means for every 100 bets, you could win 60 of them and lose 40. After 100 bets, your bankroll would be $13,493. Compared to a same size betting system, 60 bets at $200 each gives you $12,000 and 40 loses at $220 is $8,800 so your net profits would be $3,200. This is okay, but not as good as the first example using the percentage of bankroll.

Some players who use the same size betting system may disagree since most of the wagers are more than $200. Let’s look into this. If you use an average bet size of $205 multiplied by 60 wins gives you $12,298. 40 losses plus vigorish is $9,019, so your total profit is $3,280. This is better, although still not as good as the percentage of bankroll with $3,485.

To succeed, you must look at gambling like sports betting as an investment, much like the stock market. You must slowly work and toil on it, so don’t expect an overnight success. Betting large amounts is an indication of a gambling problem.