Using variable staking to minimise your losses - Bet Angel Academy

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Using variable staking to minimise your losses

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People have asked me now and again why I use certain stakes in the market.

That question is relatively simple to answer, but you have to go a bit deeper to really get to grips with exactly how you should be staking in general.

If you look at a lot of my content you’ll notice that sometimes my stakes jump in strange multiples.

Now this does look a little bit unusual to start with, but there are a couple of reasons for the way that staking is done. You need to understand where I sit within the market and how I trade to understand that as well.

If you’re looking at traditional trading, you’re going to be putting an order in and out of the market. When you are actively trading, you need to be able to decide what your stake is going to be.

So whenever I turn up to a market, I already have in my mind the limit at which I’m prepared to be able to actively stake to. The basis on which I do that is down to a couple of key factors.

Why I vary my trading stakes

The first factor is a certain level of confidence.

If I am pretty sure that the trade is going to work, then I will be a little bit more aggressive and I will use a larger stake within the market. However, if my uncertainty increases, then my stake decrease. This is a classic way of managing your risk within the market and minimising your losses.

If you turn up to a market, and you just use £100 as your stake, and you’re doing it in every single market, you’re probably not managing your risk correctly. You are staking the same in a market that you consider risky and too little in a market that you have a level of confidence in.

I go down a checklist of things that I’m looking for, and it scores very high, then I’ll stick a large amount of money on it. At the other end of the scale, you turn up to market and you haven’t got a clue. So I’ll bring my steak all the way down to err… zero.

If I can’t read a market and don’t have a clue what is going to happen, or consider it too risky, I just avoid the market altogether.

Varying your staking makes perfect sense as you improve your expectancy by losing less when you are taking more risk.

Know your perspective

Staking is also important to understand from the perspective of what type of market you are trading in.

The primary perspective that you need to worry about when you’re staking is your opportunity to get out.

So if the market is weak I will stick with small amounts, simply because I’m more concerned about getting out of a position. If your exit position is much more than the market can tolerate, then you’re going to end up pushing the price against you when you try to exit and you will help create your own loss.

You have to stick within the limits of what’s available within the market so you can’t overstake.

The two key factors to staking

The key to winning money in the long term is to get a positive expectancy. There are four variables in that mix, how often you win, how much you lose and how much you win.

Some trades are obvious and should give you confidence, while others are less obvious and therefore much riskier. To influence your expectancy vary your stakes to capture more profit on more obvious situations and minimise your losses when you are less certain.

In short, vary stakes according to: –

Confidence – Are you confident that the market will do what you predict?

Underlying liquidity – When you place your exit position in the market, will the market take that position quickly?

Focus on both those things and it will make a dramatic difference in the long term.

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