People always ask me how best to invest their bankrolls and hey, that’s a tough one for everyone. Straight up, I would say that the most important factor is to know the different methods out there. Some people really go by the book and others come up their own strategy or juggle them around.
So let’s be a bit technical and talk about the strategies for bankroll investing. At the end, I will tell you my own choice, but maybe by then you might be clear that another method is you way to go.
Slice of the Pie
This is one of the strategies that aim to maintain a constant percentage of your bankroll with each bet. This method protects gamblers from losing their entire bankroll as the betting amount decreases at the same time the bankroll decreases. The way it functions is by deciding on the same value for each bet and furthermore, it seeks equal odds for each bet. The Slice of the Pie strategy fails in that it doesn’t recognize value as a vital part of a successful management strategy. It just focuses in the management of how gamblers lose their money.
The Kelly Strategy
This strategy considers both the probability of the winning of a gambler or team and the value of the odds offered in relation to that probability: the overlay. It invites gamblers to bet more depending on the result of the overlay; however, gamblers have to seek the probability of a given outcome in a consistent manner.
Overlay Calculation = (probability * odds) – 1
The Kelly Strategy has these versions:
- The Full Kelly – It can make gambling a more exciting experience and it takes riskier betting amounts. For example, it may suggest a bet of 50% of your bankroll. Meaning, it can empty your bankroll fast. However, a winning streak can take it to a high new level of dollar numbers.
It is calculated as:
Percentage of bankroll to bet = overlay / (odds – 1)
- The Fractional Kelly – Easy and a more conservative stem of the Full Kelly. Gamblers bet a certain fraction of the recommended bet. It could be a 50% which is The Half Kelly, 25% which is the Quarter Kelly or any chosen amount. This might be a safer long-term method with better results.
- The Constant Kelly – This one is the same as the Full Kelly, but it invites gamblers to take a percentage of a constant number. For example, instead of suggesting 15% of a diminishing or improving bankroll, it recommends 15% of a constant amount.
This strategy is similar to Slice of the Pie, but it considers the odds offered for a particular bet. For example, if you bet %5 of a $1000 bankroll the standard unit is $50. If betting on $2 odds, the unit remains $50, but when betting for example on $11 outsider, that unit becomes $5. Again, the downside to this strategy is that it doesn’t take into consideration the recognized value of a particular betting proposition.
My personal choice is to combine the Fractional Kelly, since it protects my bankroll while I can play with the types of bets that I usually make. It’s what best works for me. I guess I see it as the safest, but at the same time fun way for me to spend my greens.
Whichever you choose, all I have left to say is: Good luck! And don’r forget that the CoolCat has all those wonderful casino games you love only a few clicks away!