Question about bankroll management and compound interest

[0liver]

Hi everyone,

I'm starting to test some automation on horse racing with Bet Angel (in Guardian mode) and I'm trying to plan my ramp-up a little more seriously. Currently, I'm running on a 5% monthly return basis. I've done a few simulations on my own to see what would happen if I systematically reinvested the winnings, while adding a small fixed deposit each month to increase the starting capital. On paper, the snowball effect with compound interest seems enormous after 12 months, but I have my doubts about how it would work in reality. For those who use bots continuously, do you adjust your stakes automatically via Excel to keep up with the growth of your bankroll, or do you cap your stakes at a certain level to avoid liquidity problems on Betfair?

[Anbell]

Hi everyone,

I'm starting to test some automation on horse racing with Bet Angel (in Guardian mode) and I'm trying to plan my ramp-up a little more seriously. Currently, I'm running on a 5% monthly return basis. I've done a few simulations on my own to see what would happen if I systematically reinvested the winnings, while adding a small fixed deposit each month to increase the starting capital. On paper, the snowball effect with compound interest seems enormous after 12 months, but I have my doubts about how it would work in reality. For those who use bots continuously, do you adjust your stakes automatically via Excel to keep up with the growth of your bankroll, or do you cap your stakes at a certain level to avoid liquidity problems on Betfair?

You probably arent running into liquidity problems on Betfair yet. If it is going well, give it some oxygen

[ShaunWhite]

Best to run at one stake for a week or two, nudge it up, and repeat. You'll hit a point of diminishing returns and then it'll tip over into losing. The most effective stake will obviously depend on the sport, method and phase of the market. Let your bank grow organically, if you've got an edge then your balance will grow quickly enough without adding to it. Just make sure your bank is big enough to cover the inevitable drawdowns.

[jamesedwards]

Hi everyone,

I'm starting to test some automation on horse racing with Bet Angel (in Guardian mode) and I'm trying to plan my ramp-up a little more seriously. Currently, I'm running on a 5% monthly return basis. I've done a few simulations on my own to see what would happen if I systematically reinvested the winnings, while adding a small fixed deposit each month to increase the starting capital. On paper, the snowball effect with compound interest seems enormous after 12 months, but I have my doubts about how it would work in reality. For those who use bots continuously, do you adjust your stakes automatically via Excel to keep up with the growth of your bankroll, or do you cap your stakes at a certain level to avoid liquidity problems on Betfair?

Stake tends to have a huge effect on ROI%.

Here's an example of an automation I was running on greyhounds a few years ago.

Impact of stake.PNG

I would advise not linking stake to bankroll at all, but to slowly adjust stake over time to try and find the level that maximises overall profit.

[0liver]

Thanks for all the insights, everyone. I see the point about letting the bank grow organically and being careful with stake adjustments. I guess part of my curiosity comes from trying to visualise the snowball effect of reinvesting winnings plus adding a small monthly deposit.

For anyone interested in experimenting with this concept in a risk-free way, I found this kalkulator compounding gratis quite handy, it lets you see how a consistent monthly growth can develop over 12 months without touching real money. It’s been useful for me to get a more realistic sense of how much “oomph” compound interest really adds.

I’m definitely going to follow the advice here: run one stake consistently for a bit, observe, and only nudge up slowly while keeping an eye on drawdowns. Better safe than sorry with automation!

[Acheron]

I think the advice here is spot on.

For anyone interested in experimenting with this concept in a risk-free way, I found this kalkulator compounding gratis quite handy, it lets you see how a consistent monthly growth can develop over 12 months without touching real money. It’s been useful for me to get a more realistic sense of how much “oomph” compound interest really adds.

Maths isn't my forte - doesn't variance play a crucial role in these growth estimations? I may well be mistaken but the following simulator appears to show far more conservative estimates when I try to use equivalent inputs:

https://sportsbettingcalcs.com/betting- ... _simulator

Getting the average odds and ROI right can be tricky when trading. I assume that "Bet Size: Variable" as opposed to "Fixed" simply means that you're compounding your growth by increasing stake (liability) with bank size, although I'm not sure what the "2.20% to win 2.00%" part means...

[jamesedwards]

For almost all investments in life, economies of scale are prevalent. The greater the size of each investment, the bigger the ROI%.

Gambling is the complete opposite. The greater the size of each investment, and the smaller the ROI% becomes.