However, the concept is unlikely to help gamblers calculate exactly how much to risk. The concept of utility is the best answer. But you have to have at least a basic knowledge of mathematical expectation. It can also be used to create the most effective betting strategy.
In the context of betting, you can calculate the mathematical expectation by multiplying the probability (percentage) of winning by the amount of potential winnings, minus the possibility of losing. Briefly, the formula is as follows: EV = P*O-1. P in this case stands for probability of winning and O for odds in decimal format. The mathematical expectation is considered by many experts to be a very important concept, as it helps us know what the odds are for a bettor to lose or win in the long run. It is a good place to start planning and creating a strategy. Correctly calculating the mathematical expectation allows you to understand how much to use for a bet.
The importance of the concept was confirmed in the 18th century by Daniel Bernoulli. However, the mathematician added that it is foolish to start from the mathematical expectation alone, ignoring the expediency of the winnings. Subjective consequences are also extremely important. They are what characterise the concept of utility. It is an effective enough approach to betting that it is worth considering.
Features Of The Concept Of Utility
To avoid getting bogged down in history, formulas and the like again, let’s look at the concept of utility using a fairly simple example. Suppose a bettor has only two options to choose from for a bet. The first is presented with the best chance of a pass and allows you to get 5,000 $. The second is with the risk and allows the bettor to win 20 thousand $, or lose it all. No bettor, bookmaker or even the teams themselves know how the match will end, but for obvious reasons, both will win.
So which option to choose? If you trust the mathematics, both solutions come with almost the same mathematical expectation, except for the additional risks, which are better considered in a separate order. The calculation is very simple in the example. If you choose an event with a lower possibility of losing, it is likely that the 5000 will still end up in the bettor’s balance. If a player wants to make a bigger score, he would rather take a risk. Here, everything depends not only on a high-quality analysis, but luck plays its part as well. When all the details and details are studied, as well as in the case of luck, one can earn 20000 $. However, with a negative set of circumstances, the bettor will lose everything at once. It is clear that nobody is happy with such situation, that is why almost everybody choose less, but more promising, than more with unclear results.
If we look at the situation from the point of view of utility concept it is more profitable to get a bet with smaller odds and correspondingly better odds. However, it is worth understanding that not every game with a 1.05-5.5 odds has a 95-5 chance of success. For example, in a match between football teams A and B, the odds on the former are 1.1 and on the latter 4.9. The client decides to bet 50,000 $ on the favourite in order to simply and without problems raise 5,000 net. Once the match starts, Team A loses their two leaders in the first half due to injuries, and also gets their best defender suspended. In play the odds will skyrocket, but the ‘proven’ bet has already been made. So a simple set of circumstances turned an ironclad pass into a flop. The example is crude, but from it we can conclude that low odds do not always mean confidence when placing a bet. All the more reason not to bet millions, believing the matter is done.
Mathematical Strategies For Calculating Bets
We have already had quite a few articles on mathematical strategies on our website, so let us briefly describe their influence on bankroll management. Professionals advise you to use one or two concepts, so as to avoid confusion at least. Also, many strategies when used at the same time can give drastically different results, which confuses the bettor considerably and the bettor needs to revise his betting approach again.
The most basic, popular, and effective mathematical strategies
Martingale
A well-known strategy according to which the bettor has to increase the amount for a prediction twice, after losing. That is, the first success afterwards will allow the losses to be covered. The strategy itself is not bad, but still professionals advise not to use more than 1-4% of the total bank for betting.
The Ladder
A rather interesting approach, in which the size of each future bet is equated to the payout from the previous bet. In fact, this strategy can only be considered a certain ritual, as it has no mathematical explanation. For example, a bettor bets 100 $ at odds of 2.0 and wins. Then 200 $ bets again at 2.0 and earns 400. The scheme works only with coincidence and sure help of luck. But in this case it is possible to use minimal risks, therefore it is quite realistic to reach the set goal.
Oscar Grind’s tactics
According to the terms, the bet amount should correspond to the set goal and you should not change it even after defeats. However, before closing the cycle it is better to double or triple the size of the prediction, especially if the series of defeats is excessively large. Naturally, if your goal is to earn 100,000, but your bank is only 20,000, you should start with 100 $, or better still 1,000.
Forks
In this case, you will have to calculate betting amounts for at least three events at once: a win for one of the teams or a draw. Also, it is necessary to find the fork itself, because not all games can be used to apply the strategy.
These are the basic options that are most commonly used by experienced players. Beginners prefer to believe amateurs who make up strategies on the fly, suggesting to choose 5, 7 or 20% of the pot depending on the chosen market: handicap, total and others. Such advice is best rejected because there is no interaction between the option to bet and the percentage of total capital. It resembles a similar ritual used in laddering, but with a chaotic approach.