Bankroll and risk
Variance
The spread of outcomes around your expected result — why good bettors have terrible months.
Betting outcomes are noisy. A bettor with a genuine 3% edge will still have losing weeks, losing months and occasionally a losing season. That is not a sign the edge disappeared; it is the ordinary behaviour of a small edge applied to a high-variance process.
The practical consequence is that short-run results tell you almost nothing. Distinguishing a 55% bettor from a 50% bettor with statistical confidence takes well over a thousand wagers. This is why closing line value is the better feedback signal — it measures the decision rather than the outcome.
Want the full version? Read the in-depth guide, with worked examples and the math.
See also
- Risk of ruin — The probability of losing your entire bankroll before your edge has time to show.
- Sample size — How many observations sit behind a number — and whether it means anything yet.
- Closing line value — Whether the price you got was better than the price the market settled at by game time.
- Bankroll — The money set aside specifically for betting, separate from everything else you own.