Win Percentages, Winning Edge and Money Management
Professional gamblers consider a win percentage of 35%-40% to be very respectable. These expert punters aim for a minimum return on investment (ROI) in the region of 20%, i.e. a return of $1.20 for every $1 bet, which compares favourably with savings and other investments. They place their wagers on “premium” selections, with a clear advantage over the field and offered at VALUE ODDS. Many casual players are capable of achieving a 20% ROI, but few do.
The critical factor that players fail to appreciate is that long-term profits depend on the odds at which the winning bets are struck and the correct stake. Knowing the win percentage and winners` average odds enables a backer to determine their “winning edge,” according to the formula:
Winning Edge = Win % x Average Odds – Loss %
For example, for a punter with a win percentage of 30% at average odds of 5/2: Winning Edge = 30 x 2.5 – 70 = 5%.
This edge determines the correct size of the bet, according to the formula: Stake = Winning Edge ÷ Odds, so for the above, the optimal stake is 5 ÷ 2.5 = 2% of the betting bank.
However, if the backer is able to increase the win percentage to 33%, the winning edge becomes 15.5% profit, a more than threefold increase. The required stakes also increase though, requiring 7.75% of the betting bank. The latter scenario should be within easy reach of most recreational speculators prepared to put in a little work on form analysis.