
What is the Stake and how to use it?
What is the Stake and how to use it?
Let's start at the beginning, the STAKE is a measure of the confidence that a tipster has in each forecast. Easy, yeah?
Not so much, since each tipster has a different conception of their stake and there are different concepts that we must understand before delving into the subject that concerns us today.
STAKE STRIP: It is the stake base used by a tipster and ranges from its minimum stake to its maximum stake. The stake includes values between 0.1 and 10. Thus, a tipster could have a stake base of 1 to 3 and another of 3 to 10.
STAKE SPREAD: This term relates to the difference between the minimum stake and the maximum stake that a tipster uses.
AVERAGE STAKE: Average of all the stakes that the tipster has used so far.
FLAT STAKE: Flat Stake, this term is used when a tipster always predicts with the same stake in all tips.
BANK: Total amount of money available to bet.
How to use the stake properly?
Once these terms are internalized, we can talk about what is important, how to use a tipster's stake to maximize our benefits. Well, this is theoretically simple, because we only have to set an amount of money for each stake point for each tipster. Given that not all tipsters use the same stake band and we each have a different trust for various reasons, it is logical that we set different monetary amounts for each one. To simplify, let's use an example with 2 tipsters who we have the same confidence in but use different stake bands.
OUR BANK: € 1,000
TIPSTER A: Stake from 1 to 3. Medium Stake 2.
TIPSTER B: Stake from 2 to 6. Medium Stake 4.
The classic gambler's theory states that 1% of our bank must be wagered at each stake point of the tipster. So, STAKE 1 = 10€. However, for obvious reasons we must modify that % depending on each tipster we bet on and the % we invest in each stake point of each tipster will depend on the confidence we have in their tips and our own aversion to risk.
In this case, following the theory of 1% bank per stake point, we would have tipster A with 10€ per stake and B with 10€ as well, but what would be our average bet on each one? Well, in tipster A we would be investing 20€ on average while in B it would be 40€. Wouldn't it be logical to equal these amounts? Yes. A simple solution could be to invest 15€ per stake in tipster A and 7.50€ in tipster B, in this way our average bet for both tipsters would be 30€ (3% of our total bank).