In the context of betting, compounding refers to the practice of reinvesting your profits or winnings back into your betting bank or stake.
Instead of withdrawing your winnings, you keep them in your betting account and increase your wager size based on the growth of your bankroll.
Here’s a step-by-step description of how compounding works in building a betting bank:
1. Determine your initial betting bank: Start by deciding on the initial amount of money you’re willing to dedicate to your betting activities. This amount should be affordable and not interfere with your regular expenses or savings.
2. Establish a percentage for your stakes: Determine the percentage of your betting bank that you’re comfortable risking on each individual bet. This percentage will typically depend on your risk tolerance and betting strategy. A common approach is to risk around 1-5% of your bankroll per bet. This is also known on the site as splitting your betting bank into ‘Points’.
3. Calculate the stake size: Once you have determined your point value (stake percentage), you can calculate the stake size for each bet. Multiply the current size of your bankroll by the stake percentage to obtain the amount to wager.
4. Adjust stake size based on bankroll growth: As your bankroll grows due to successful bets, the stake size will increase accordingly. Recalculate your stake size for each new bet based on the updated bankroll value and stake percentage.
5. Reinvest your winnings: Instead of withdrawing your winnings, reinvest them back into your betting bank. This means that your stake size will be based on the increased bankroll, allowing for potentially higher returns in the future.
6. Monitor and adjust your strategy: Continuously monitor your betting performance and make adjustments to your strategy as needed. It’s important to evaluate your results, learn from your mistakes, and refine your approach to maximize your chances of long-term success.
7. Practice responsible bankroll management: While compounding can help accelerate the growth of your betting bank, it’s crucial to practice responsible bankroll management. Avoid taking excessive risks or increasing stake sizes too rapidly.
Remember, successful betting requires a combination of skill, knowledge, discipline, and a long-term perspective. Compounding can be a powerful tool in building your betting bank, but it’s important to approach it with a well-thought-out strategy and prudent risk management.