Staking for me is all about maximising profitability. Every market has a finite level of liquidity so ROI% will diminish as stake increases. The gearing ratio at which this happens depends on the type of market and associated liquidity.
eg on Premier League football the relationship between ROI and stake will be low, whereas on an obscure low league match it will be much higher. It's all about finding the sweet spot that maximises total profit in that particular market.
Perhaps a Premier League market with a lower gearing ratio might have a sweet spot of £5.50, whereas the higher gearing ratio on a lower league match might have a much lower £3 sweet spot.
Most youd risk on one market
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jamesedwards
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stueytrader
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That's an interesting approach, using relation to potential return ratios, thanks James.
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stueytrader
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As a general point I think staking level, and risk levels, are fascinating areas because there is a huge amount of potential variability and choice possible.
It seems simple: don't overstake relative to your banks, don't understake relative to returns you want to achieve.
But, within those broader guidelines there is an extremely large amount of choice available to select. I know ideas like risk of ruin and kelly criterion are often discussed too as principles mathematically, and maybe related to your wider idea above for returns ratios.
Then there is the whole question of what you may be 'comfortable' with risking at any given time, or period of time. Sometimes maths suggests an optimal staking would be best, but you might personally not sleep at night with that level!
It's a wide question, both in maths, process, optimality and subjective judgement. Hence very interesting.
It seems simple: don't overstake relative to your banks, don't understake relative to returns you want to achieve.
But, within those broader guidelines there is an extremely large amount of choice available to select. I know ideas like risk of ruin and kelly criterion are often discussed too as principles mathematically, and maybe related to your wider idea above for returns ratios.
Then there is the whole question of what you may be 'comfortable' with risking at any given time, or period of time. Sometimes maths suggests an optimal staking would be best, but you might personally not sleep at night with that level!
It's a wide question, both in maths, process, optimality and subjective judgement. Hence very interesting.