# Flat Vs Variable Stake

I have no intention to write neither about another post on the better management of the bankroll, nor if variable or flat (fixed) stakes are better, nor about the yield concept.

If you search on google, you can surely find hundreds of full and possibly better articles.
As always, my idea is to use a practical component, which can make us think (even by opening a constructive debate, if you want). I’m going to give some examples and make some personal comments on the pros and cons of each of them, and I will analyze and try to specify some myths.

(Another important thing: there are no absolute truths about this topic. Everyone must manage the stake with which you feel more comfortable. For example I like a mixed method between flat and Kelly, a “rolling” stake, if you want to call it so.

VARIABLE STAKE

The variable stake can be used to read the tipster’s or our ability to show how good or bad we are, “by assessing the value” and assigning the corresponding stake to a bet. A tipster who knows how to assign the stake well, is the one who in a sample, THE SUFFICIENTLY GREAT ONE has the best long term yield of his high stakes. But I INSIST on a large sample and if we compare the results to the stakes: What do I mean by this? Well, if you have a range of stake from l to 5, we must evaluate the yield regardless of the picks played with 1, 2, 3, 4, and 5 stake…Can I explain? Another interesting fact to “look at”, is the yield per odds and its correlation with the stakes I mentioned before.

Before continuing, I would like to reflect. When you choose what stake management you are going to use with your picks or with somebody else’s picks (and the % that you will give to your bankroll in a case or another) How will you deal with it?…You will you see which is the greatest benefit that it can give us in the long run and make an analysis of your past results, won’t you? Yes? Are you sure? A kind of “Counting the chickens, before they’re hatched.”

My opinion (and after I have been given a good blow when I had a portfolio of tipsters), is that the more tipsters you follow, the more you run the risk to go astray (and the more psychological damage you will suffer) … Or that you can panic before a bad run of 3 or 4 that form your portfolio in a period of time (that happens)…

As I said, to make that decision you have to analyze it, by seeing which is the management that will make us lose less or at least analyze the worst case and the bigger “down” expected (in periods of time). It is important to analyze the management and allocation, according to the range of odds and history of the tipster.

We all have “Downs” and they will ALWAYS be. And yes, of course. Take your decision from there, without giving up earning the “dough”, which is what we are talking about (I know it’s a complicated equation…)

In the good moments all stakes and bank managements are good, but for the bad series, no management of positive results has been invented yet. But there is one that minimizes losses and also, if you have a very aggressive management, the blow will be greater…

If we talk about the variable stake, Kelly’s criterion for me is the “fairest”, it is the best as long as you are good at assigning a value to each bet or if you follow someone good enough, who gives you something already done.

As you said, Kelly’s criteria makes you win longer if you are good and lose less when the bad streaks occur, and in fact they ALWAYS OCCUR.  Another thing is to know when they occur or when they have occurred to someone you follow…There are clues in both cases, but it is not easy to see, otherwise we would all be rich…I always hear talking my friends who check the stock market about something similar, “if an action continues to reach its maximum let it run”.  The problem is to know when to sell, because this is a bit the same…

There is something very interesting and important: do tipsters use good or bad variable management and also, do they do it sometimes well or ill-intentionally…If there are any “sudden” movements in their graphs during the good series and above all, during the bad spell series. Spend some time and see what is happening…

The ideal to see this, is to transform the variable graph to stake 1 flat and see if there is parallelism with the variable graph FROM THE START TO THE END. If that gap is opposite or random and not “corresponding”, is an indication that the management of the stake is not the ideal one.

There are quality webs that in my opinion correctly bet on the “transparency” and they facilitate us a good choice when we want to follow someone and it’s there where you can compare what I am telling you with the tipsters that you want to have. I will show you a chart to see the comparison and evolution of a tipster with flat stake and his real stake.

THE YIELD AND FUTURE PROFITABILITIES, EXPLANATIONS OF THE MYTH

Before giving you my opinion on the flat stake, let me provide you with a couple of reflections that are not always taken into account in the articles that deal with this topic…

I will not be the one who doubts that the yield is the best way to evaluate the profitability in absolute terms, that is a tipster in the long term and above all, as regards the risk assumed or run by each of us, how profitable we are in our bets Vs assumed risk.

This is where I want to point something out, because even in long series with very good yields, there can also be “something fishy”…Let us imagine a tipster who has 2.000 picks (and we all consider it as someone to trust at least? That in his 100 or 200 first picks, he has used a very high stake, in not very liquid markets, who knew very well how to generate great profits and then for the rest of the tips, he is committed to “maintain” that yield with lower stakes in big markets, while still being profitable. That of course  attracts followers who see him as a tipster who has great yield and plays in liquid markets …Do you follow me?

Be careful! The guy is still good because, if not, the graph would start to go down. The tipster is good but not so much as that 17% yield can say of those 500 or 1000 picks at first sight. To be totally objective when evaluating to a tipster, the ideal is to see the history of that tipster pick after pick, the stakes used since he started and the markets used by him (these data also contribute to what I have already mentioned) and what he is currently using …You are following me, aren’t you? Also here it is important to see or calculate your inter-monthly yield (with intervals of 6 months for example) and compare his form…

And what can you say about this “past profitability does not guarantee the future” so repeated by some gurus, or any similar…For me this das make full sense, but I see it a little out of use, if this is so …Because, when we need to do an operation, we always look for the doctor who has operated more times the same thing and with better results? If not, it does not guarantee us anything, does it? Then let’s go to the general practitioner of the neighborhood and God help us? I have not seen Messi in my neighborhood with a crutch…

Well the same thing happens with the tipsters. They do not guarantee anything but the background gives you more confidence if you have done the analysis that I am telling you. Trust in him when he has won and in bad series you must help him, not criticize him. If we paid attention to this phrase, we would be all at home every day, just in case it is worse than yesterday…Let’s be positive!!!

To finish this point, one last question…If you are not a professional tipster, do you earn a living from the yield… Or from the profit? This is an interesting debate, too.

STAKE FIXED (FLAT)

To talk about this management, I will start by mentioning the case of USA tipsters. What happens when we follow these tipsters who usually prefer flat stakes? Or not USA tipsters: there are MANY good tipsters who use flat…or at the most 2 stakes…What’s the problem if you’re good? Ask Kbarcellan, why he used only 10?

The flat stake has other interesting advantages. Above all, because on the one hand it eliminates the subjective character of each bettor (very important in down or tilt moments). It helps those who do not have the best ability to always “value the value”, provided that eliminates choosing picks and assign a low stake (it is difficult to see a pick with value after having discarded it and it is even more to assign a correct stake. A tipster who uses flat stake will say to you: “The pick is either good or not good. Instead of selecting a worthless tip, it is best to let it be …Why would you need it??

Okey. I don’t get more involved with the theory, I will give you real examples of the impact that this has on what I am commenting:

I am going to present the chart of an American tipster, who sent flat stake, but to which I assigned a % of my fixed bank that updated daily, and on who applied the next tip. He had a glorious year and another normal one in line with the USA …You do not lose but you also do not win the bad thing is that from time to time you get into a streak of failures that leave you touched psychologically:

Year 1: Graph with a 64% hit!!! Almost nothing!!! Average share that I got 1.87. Flat 150 units Vs roll 0.5% of the bank.

Year 2: Hit rate 54%, average share 1.86%. Same case management 1.

As you see, when the thing goes right vs the minimum hit to defeat the payout there is hardly any difference (I win a small flat stake). I prefer to sacrifice that bit for a better control down, in bad series or for the possibility that it might go very well. If you have a good year, or the tipster you follow has a good year, the difference is spectacular.

This difference is more noticeable if you are able to link long series of greens (because of the multiplier and “shuttle” effect), but be careful, it is also more “effective” to minimize losses in bad streaks… I put a zoom on 2 opposing streaks of 15 green and red events:

It’s not a big difference, but in a big bank and in the long run yes it is … with the roll flat on % bank, if you win, you win more, and if you lose you lose less … it’s a “mix”, as I said before not is the best is mine, but I still think the advantages of a variable management and those of the flat …In fact I am a little limited to “value the value”. I like having 2 ranks for things I do and I like to simplify things. But always before having valued and tested…the advantages and disadvantages.

The bookies earn millions of euros a year not only because of a poor selection of picks (and in fact there are poor picks) or by over-betting (there is over-betting too) or by following tipsters with no value, or already dropped odds. The bookies win of all those that before a bad streak of 10 or 20 picks, are left without a bankroll or they start to make experiments with the management. Those that resist bad series without doing unusual things, will have the predisposition to be winners in the long term and that is the first thing that we should learn and with what we have to be consistent. Likewise I think it is the first thing: that the tipster himself should teach his followers. In this case, the problem is that you sometimes read worthless things to manage the bank (like assigning a 5% of the bank to a tip or similar things). That it is almost better to be us, the ones who measure the risk in the bets AND MORE EVEN IF WE HAVE A BANK of several tipsters, the risk multiplies.