What size is the perfect bet?
Well, that depends on what type of player you are. If you're looking for excitement and huge payouts, by all means do large accas and hope for the best. Enjoying the entertainment is a perfectly legitimate reason for betting.
But here, we're going to assume that your end goal is to steadily increase your winnings - nevermind if the graph is boring; the most important thing isn't maximising your potential profits but minimising the risks you take.
There's a simple reason for this: eventually, if you're a winning player with good bankroll management, you'll stand to make a profit - but there are loads of potentially winning players who had to call it quits because they knew sports and odds well, but sucked at money management and subsequently lost their gambling funds.
Of course, swings can be a pain anyway - and there's never a guarantee that you'll be able to invest or withdraw a fixed monthly amount. However, by minimising the effects of your swings, you can get pretty close.
It's very easy to show why neither of the two extremes is desirable. We'll assume here that you are a winning player. Hypothetically, let's take these scenarios:
- You place all of your bets at the odds of +99900
- You place all of your bets at the odds of -10000
In the first scenario, how much can you stake per bet without going bankrupt if you should happen to lose a couple of hundred bets? (Which is very likely, given the odds.)
In the second scenario, what happens to your bankroll the day bad luck strikes and you lose three straight bets?
So we know that huge odds aren't good for swings, and we also know that really low odds aren't either. What happens if we change them to +49900 (half) and -5000 (double) instead? Well, the examples would still be ridiculous, and the same logic applies.
However much we move those limits, we'll always be risking the unexpected loss - or that the expected win doesn't arrive.
So, logically, where do the two extremes meet? The answer is at even money, odds of -100. By placing your bets thereabouts, you minimise the risk for swings having their way with you.
We made some simulations and put them on a graph. One places bets at high odds, one at even money, and one at low odds. Every bet is worth 1 unit, and neither the player nor the bookmaker has any advantage, meaning that the player will go breakeven in the long run. Each simulation is 10,000 bets long.
In this case, the even money odds happened make the most profit, but that's randomness for you. It could just have well have been the opposite. The point is that you should look at how the graphcs curve and swing. Can your bankroll stand the huge leap that the green and blue lines make? And if yes, is that desirable? Can your mental health stand it?
We don't think it's desirable at all, really - and hence, we prefer odds at around between -133 and +125 for the majority of our bets.
But please note that this is not a hard rule. Good odds are good odds regardless of whether they're high or low - and some markets may not even realistically have good odds at around evens.
The bottom line is that knowledge of advantages, disadvantages, and limitations is important in regards to the odds you choose to play. And no term could be more fundamental to this than variance is.
