Lesson
Bankroll Management and Bet Sizing
Two people can have the exact same win rate and one goes broke while the other doesn't. The difference almost always comes down to how much they bet, not what they bet on.
Quick answer
A bankroll is money set aside just for betting, sized in units (usually 1-2% of the bankroll per bet) instead of dollar amounts, bet flat and consistently rather than sized by feel or confidence.
Your bankroll is a number, keep it separate
Your bankroll is whatever money you've set aside just for betting, nothing else. Not your checking account, not "whatever's left over this week." A real number, sitting on its own, that you already made peace with potentially losing all of.
Why "units" instead of dollars
You'll see bets described in units instead of dollar amounts, like "1u on the Yankees." A unit is just a percentage of your bankroll, usually 1 to 2 percent. Talking in units instead of dollars keeps your bet sizes scaled to your actual bankroll instead of to how you're feeling that day. It also makes it possible to track a track record that means the same thing to a $500 bankroll and a $50,000 one.
1 unit at different bankroll sizes
| $1,000 bankroll, 1u = 1% | $10 |
| $5,000 bankroll, 1u = 1% | $50 |
| $5,000 bankroll, 1u = 2% | $100 |
Same "1 unit" bet, very different dollar amount. That's the point. The unit scales to you.
Why flat betting beats chasing a feeling
Betting the same size every time, regardless of how confident you feel or how the last few bets went, is called flat betting. It sounds boring on purpose. The alternative is betting more when you feel good and less when you feel shaky, which just means your biggest bets happen to line up with your worst judgment, right after a big win when you're overconfident, or right after a loss when you're trying to get even.
Bigger edges can mean slightly bigger bets, not wild ones
Some structured approaches (Kelly Criterion is the well-known one) do scale bet size to how big the edge actually is. Even then, most people who use it bet a fraction of what the full math suggests, because the full number assumes your edge estimate is exactly right, and it never is. A grade A release being sized a bit larger than a grade C one makes sense. Doubling or tripling a bet because it "feels like a lock" doesn't.
The number that actually matters
Not your win rate. Not any single bet. How much of your bankroll is left after a bad stretch, because bad stretches happen to everyone, including a model with a real edge. Betting small enough that a rough two weeks doesn't wipe you out is the entire game. It's not exciting advice, but it's the difference between still being around to see your edge play out over time, and not.
Bankroll management: frequently asked questions
What is a betting unit?
A unit is a standard risk amount expressed as a percentage of a separate bankroll. Using units makes records comparable without encouraging anyone to copy another person's dollar stake.
What is flat betting?
Flat betting means risking the same number of units on each position. It reduces the damage from emotional sizing and makes performance easier to evaluate.
How much of a bankroll should be risked on one bet?
There is no universal safe number. Many examples use 1% as one unit, but even that can be inappropriate for someone who cannot comfortably lose the full bankroll. A stake should never come from money needed for bills, savings or debt payments.
Should bet size change after a win or loss?
Not to chase a result. A unit can be recalculated on a fixed schedule as the bankroll changes, but doubling after a loss or pressing after a win adds volatility without improving the model. If losses create urgency, the right move is to stop, not increase the stake.