Money Management in Sports Trading is the basic "strategy" to follow always, in all situations, because no operational strategy will be successful without proper and strict money management.
The rules of money management in sports trading, as well as having a positive long-term impact on our operating account, will allow us to operate in the best possible way from the psychological point of view because we would already know at the beginning the sum that can be lost for each operation.
The importance of money management
Using a minimum and default percentage of our trading account we could endure an unfavorable series of transactions without affecting the initial account (bankroll), thus allowing to stay on the market in the long run.
The main reason in fact because those who work in the forex lose everything in a very short time is due to the fact that the broker "cunningly" grants a disproportionate financial leverage so that the customer self-destructs in a short time, not respecting the main rules of money management. The granted financial leverage therefore leads to not respecting the correct money management by the customer who will see, in a very short time, lose all his bankroll at the expense of the broker who in this case will cash the loss of the customer.
This principle also happens in traditional bets where the bookmaker collects the losses of the customer and therefore has all the interest that the customer is a loser ..... The Betting Exchange instead offers the possibility to the customer to defend themselves with a series of innovative tools such as the green up and the red up which are the main tools of betting money management.
One of the fundamental rules that must be follow concerns the stake to be used for each play (money used for each back or lay). It is necessary to use 5% of the total amount on your account as the extreme value of the back/lay, but it is preferable to start using around 2%.
Never ever use higher percentages for no reason! Remember that in a football game every second can happen something you can not imagine and you can foresee (a gross mistake of the goalkeeper, the defender, the referee, a penalty or an out of play that is not there) so you can suffer a loss at any time.
To start operating in the Betting Exchange you can open an account with an initial deposit of 1000 euros and use as initial stake of 20 euros and then move to 50 euros after increasing the account proportionally. Never enter the betting market by having an initial account of 1000 euros, with a stake of 100 or 200 euros because after some negative operations the future possibility of trading is compromised and therefore seeing your strategy applied.
By applying our Money Management rules on bets you will always be profitable in the long run. You can and you will "have" to lose a day, two, but in the long run the trader will always be a winner!
To realize how the stake is essential to be profitable it is advisable to study by heart the table of drawdown that allows you to see with your own eyes that using a stake of 2% you can also lose 10 times in a row (something unlikely) to see that your capital will not be affected, which is the opposite if you use 10% for each operation instead!
This is the reason why the classic bettor is mathematically losing because he does not know how to manage the cash available for his bets.
The real secret to making money
All the strategies for the Betting Exchange that are presented on our site are a necessary tool to the trader, but not sufficient if applied to a given market to obtain a certain profit at the end of a given time interval.
We want to reiterate clearly that strategies alone do not bring any results in the long run, but must be combined and used together with the money management rules described previously. We must imagine our account (which we decide to use) as our "treasure" to defend against external attacks and to grow steadily over time.
The reason why about 90% of the Betting Exchange accounts (source Betfair) is at a loss, is right here: the psychology of people leads to not respecting the rules in the long run, but only for short time, tending to increase the exposure after a loss.
Several sites offer systems such as martingale, doubling, mediate losses, lay at high odds that are very good systems to "destroy the accounts" of people. We advise against all to put into practice systems and advice of this kind because they are losing systems and dispensed by those who do not know the most basic concepts of probability, statistics and money management.
We want to create a different culture for all traders and bettors who are approaching the Betting Exchange because it is our interest that people do not self-destruct, but stay in the system for a long time.
If you tackle the Betting Exchange with the right preparation and professionalism (money management is essential), you will make your personal free bancomat!
Do not look for any amazing strategies or magic advice anywhere, but immediately use the money management. A professional trader will reiterate always that the only secret to being in profit is the military respect of these rules. During the professional courses on the betting exchange, this concept is reaffirmed by showing the real operating account statements so that the student can realize by himself that positive and negative transactions can be done, but only the respect of the stop loss always brings the account on the positive part. One must touch with hand to realize this simple but basic rule.
Deepen the money management
To better understand this fundamental aspect of the trading that only those who gain really understand and therefore disclose to others, it is advisable to buy the book “Betting Exchange - The Sports trading revolution” of Gianluca Landi where this aspect is widely discussed, analyzed and allows anyone to understand the importance.
Who is not a professional never talks about the money management as he believes that only a winning strategy is the key to success and goes in search only of the latter: nothing more wrong and misleading for those who start.
- Written by: Gianluca Landi
- Category: Sports Trading