I’ve often used this phrase and others often use this phrase, mainly incorrectly, so I felt I should qualify what it means!<\/p>\n
Simply backing or laying something ‘Because it is value’ just isn’t good enough. If we see something priced at 1.50 and we think is should be priced at 1.20 there is clearly defined value, 30% in fact. We could feel pretty confident about putting some decently money on that. While it may not win this time, doing it one hundred times would produce a decent return for us. But therein lies the problem, it’s not very common to see 30% edge in the market.<\/p>\n
I can price a number of markets very very accurately. But the edge I find is often quite narrow, maybe a few percent. Therefore, to return money over time, I must base my stake on the chance of winning and the theoretical margin of my edge. To place a bet any other way is just lunacy as the prospect of ruin lurks just around the corner of a bad run. In short , it’s possible to be right but still lose money because your staking method is shot to bits.<\/p>\n
Most people use the Kelly Criterion or something similar to work out what they should stake. You can read more on it at this link: –<\/p>\n
https:\/\/en.wikipedia.org\/wiki\/Kelly_criterion<\/a><\/p>\n