Proportional Betting System

The Proportional Betting System is a sports betting strategy where the size of each bet is a fixed percentage of your current bankroll. This system adjusts your bet sizes dynamically based on the rise or fall of your bankroll after each bet. Unlike flat betting, where the amount wagered remains the same regardless of outcomes, proportional betting changes with each win or loss, which helps control risk and optimize profits over time.

How Proportional Betting Works

The key principle of proportional betting is simple:

- You bet a fixed percentage of your current bankroll on each wager.

If your bankroll increases, your bet sizes increase as well, and if your bankroll decreases, your bet sizes become smaller. This method is designed to protect your bankroll during losing streaks while allowing you to capitalize more on winning streaks.

Formula for Proportional Betting:

[text{Bet Size} = (text{Percentage of Bankroll}) times (text{Current Bankroll})

]

- Percentage of Bankroll: This is the portion of your total bankroll you are willing to bet on each wager (e.g., 2%, 5%).

- Current Bankroll: Your total available funds for betting at the time of the wager.

### Key Features of Proportional Betting:

1. Adjusts to Changes in Bankroll: If your bankroll grows due to wins, your bets also grow, and if it shrinks, your bet sizes automatically reduce.

2. Limits Losses: By betting a smaller amount after losses, you preserve more of your bankroll.

3. Compounds Gains: As your bankroll grows, your bets get larger, leading to the potential for larger profits over time.

Example of Proportional Betting:

Let’s assume you have a starting bankroll of $1,000, and you decide to bet 5% of your bankroll on each wager.

Scenario 1: Win Streak

1. First Bet:

- Bankroll: $1,000

- Bet Size: ( 0.05 times 1000 = 50 )

- Result: You win the bet and your bankroll increases to $1,100 (including profit).

2. Second Bet:

- Bankroll: $1,100

- Bet Size: ( 0.05 times 1100 = 55 )

- Result: You win again, and your bankroll grows to $1,210.

3. Third Bet:

- Bankroll: $1,210

- Bet Size: ( 0.05 times 1210 = 60.50 )

- Result: You win again, and your bankroll grows to $1,330.50.

By betting 5% of your bankroll on each bet, your stake increased along with your bankroll. Over time, this compounding effect leads to bigger bets and potential for greater returns.

#### Scenario 2: Loss Streak

1. First Bet:

- Bankroll: $1,000

- Bet Size: ( 0.05 times 1000 = 50 )

- Result: You lose, and your bankroll drops to $950.

2. Second Bet:

- Bankroll: $950

- Bet Size: ( 0.05 times 950 = 47.50 )

- Result: You lose again, and your bankroll drops to $902.50.

3. Third Bet:

- Bankroll: $902.50

- Bet Size: ( 0.05 times 902.50 = 45.13 )

- Result: You lose again, and your bankroll drops to $857.37.

As you can see, during a losing streak, the amount you bet decreases in proportion to your bankroll. This means that each subsequent bet is smaller, which helps reduce the impact of losses and preserves more of your bankroll.

Advantages of Proportional Betting:

1. Protects Your Bankroll During Losing Streaks: Since the bet size decreases as your bankroll shrinks, you are betting less when you’re losing, which helps preserve your funds.

2. Maximizes Profits During Winning Streaks: Your bet size grows as your bankroll increases, allowing you to capitalize more on winning streaks.

3. Simple to Use: The system is straightforward, as it only requires you to determine a fixed percentage of your bankroll to bet.

4. Less Risk of Ruin: Proportional betting limits the possibility of going bust, especially if you choose a conservative percentage of your bankroll to bet.

Disadvantages of Proportional Betting:

1. Slow Recovery from Losses: Since your bet sizes decrease after losses, it can take a long time to recover from a losing streak, especially if your bankroll has shrunk significantly.

2. Volatility: While proportional betting protects your bankroll in the short term, large fluctuations in the bankroll can lead to emotional pressure to adjust the percentage you bet or abandon the strategy.

3. Requires Discipline: You need to stick to the fixed percentage regardless of emotions. This can be challenging, especially after a few wins or losses.

Example of Proportional Betting Over Time:

Let’s run through a more extended example over several bets:

Starting Parameters:

- Initial Bankroll: $1,000

- Percentage Bet per Wager: 5%

Bet 1:

- Bet size: ( 0.05 times 1000 = 50 )

- You win at even odds, so your new bankroll = ( 1000 + 50 = 1050 ).

Bet 2:

- Bet size: ( 0.05 times 1050 = 52.50 )

- You win again, and your new bankroll = ( 1050 + 52.50 = 1102.50 ).

Bet 3:

- Bet size: ( 0.05 times 1102.50 = 55.13 )

- You lose this bet, so your new bankroll = ( 1102.50 - 55.13 = 1047.37 ).

Bet 4:

- Bet size: ( 0.05 times 1047.37 = 52.37 )

- You win, so your new bankroll = ( 1047.37 + 52.37 = 1099.74 ).

Bet 5:

- Bet size: ( 0.05 times 1099.74 = 54.99 )

- You lose, so your new bankroll = ( 1099.74 - 54.99 = 1044.75 ).

Bet Sizes Over Time:

- As you can see, after each win, your bet size increases slightly, allowing you to potentially earn more.

- After each loss, the bet size decreases, minimizing the damage to your bankroll.

Comparing Proportional Betting to Other Systems:

- Flat Betting: In flat betting, you wager the same amount on every bet, regardless of previous wins or losses. This method doesn't take into account the growth or decline of your bankroll. Proportional betting adjusts for this by changing the bet size based on your current bankroll.

- Martingale System: In the Martingale system, you double your bet after each loss. This can lead to huge stakes if you hit a losing streak. Proportional betting is much safer because you only bet a fixed percentage of your bankroll, which reduces the risk of ruin.

- Kelly Criterion: While the Kelly Criterion also adjusts bet sizes based on your edge, proportional betting does not require you to estimate probabilities or edge. You simply bet a percentage of your bankroll, which is easier to manage.

Choosing the Percentage to Bet:

The percentage of your bankroll that you bet should depend on your risk tolerance and betting strategy. Here are a few guidelines:

- Conservative Approach: Betting 1% to 2% of your bankroll per wager is a very conservative strategy that minimizes risk.

- Moderate Approach: Betting 3% to 5% of your bankroll offers a balance between risk and potential reward.

- Aggressive Approach: Betting more than 5% of your bankroll per wager can lead to significant growth during winning streaks, but it also increases the risk of heavy losses during losing streaks.

Conclusion:

The Proportional Betting System is an effective strategy for bettors who want to balance risk and reward while adjusting for fluctuations in their bankroll. It automatically increases bet sizes when you're winning and reduces them when you're losing, which helps protect your bankroll in tough times and allows you to take advantage of winning streaks.

While it lacks the mathematical sophistication of systems like the Kelly Criterion, it’s much easier to implement and doesn't require precise estimates of probability. It’s best suited for bettors who want a simple, disciplined, and sustainable approach to bankroll management.