How to reduce variance when value betting
Customer Support Manager
When value betting you bet on the bookmakers overpriced odds. This means that you have a greater chance to win than the bookmakers odds imply. But it doesn't mean you win every bet you place. Value betting is not about short term gains – it's about making long term profit.
It's important to understand that value betting isn't risk-free (But still secure enough that we gladly offer a profit guarantee). You will still lose around half of all the bets you place since you only bet on a single odds and don't cover all the outcomes of the game (as you do when sure betting). But you will profit over time, since you bet on value bets with a positive expected value. This also means that you can't expect a smooth profit curve. There will be variance and you will have to face downswings from time to time. We don't want you to learn this the hard way, so better to be well informed so you know what to expect.
Variance is a measure of the difference from the expected value (see image). A high variance means that you get steeper drawdowns. But it goes both ways as you will also see higher upswings. As long as you understand the concept of value betting and can handle the variance, there is no right or wrong in terms of approach. But if you are a beginner, you might want a smoother ride, so we recommend you to take actions to reduce variance. Read more about expected value, closing line value (CLV) and variance.
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Tips to reduce variance
Place many bets
Value betting is about volume. The number of bets placed play an important role to lessen the impact of variance. You shouldn't evaluate your performance after just a couple of hundred bets. Over time, let's say after a couple of thousand bets, your results will move closer to the expected value (EV).
Bet on high values
Betting on higher value will on average increase your yield, and give you a larger buffer against shifting odds.
After you have placed your value bet, the true odds (and probabilities) will continue to shift. Sometimes the probability of a win will increase, also increasing your value compared to the closing line. Sometimes the probability of a win will decrease, sometimes turning your value bet into a negative value.
If you have enough quantity of bets, try to set the minimum value to 4% for example.
Note: Very high value bets has a small, but increased risk of mismatched data from the bookmakers. Luckily, this happens very rarely, and one wrong bet won't make much of a difference in your profits curve anyway.
Use a low Kelly stake sizing
ValueBetting has a built-in staking strategy we recommend you use. This will ensure optimal profits for your risk tolerance. If you're a beginner we recommend to start with 30% Kelly stake sizing. Using a higher Kelly will increase your profits but also the variance, so your downswings will also increase. Read more about Kelly stake sizing and how you can adjust it.
Set a max bet size
Use a maximum stake on your bets combined with your Kelly stake sizing strategy to reduce variance even further. In the ValueBetting software the default max bet size is set to 1% relative to your bankroll.
Example: You have a total bankroll of €1,000 and you set your max stake to 1%. ValueBetting will then cap your stake to €10, overriding the Kelly stake sizing suggestion (if it suggests a higher stake). Read more about max stake relative to your bankroll.
Adjust your bankroll while betting
If you turn over a significant part of your bankroll on any given day, you should update your bankroll more than once per day.
This is because the Kelly stake sizing is calculated using the bankroll you have entered in the ValueBetting software. If your bankroll decreases, your stake size (and risk) will also decrease.
But if you have half your bankroll in unsettled bets, and still calculate stake sizing based on your full bankroll, you might be taking more risk than you want.
Read more on how to adjust your bankroll while betting to reduce risk.
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Built for maximum volume & profits
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Use the Profit Simulator
Use the Profit Simulator
Try our value betting profit simulator. It can show you how different strategies affects the expected profit and variance. You can find your optimal strategy based on your risk tolerance. It also shows clearly how powerful value betting is long-term (and how high the variance is on the first hundred bets). Check out the video below to learn the basics.
Bet on lower odds
As you know, higher odds mean a more unlikely win but also higher profits when you do win. All this means larger swings and variance in your bankroll.
You can therefore set a maximum odds in your Filters. Odds over this number will not be shown. Note that we filter the true, or sharp, odds. The true odds is the true probability after all, and a high (incorrect) odds at the soft bookmaker is what we're looking for – it just increases your expected value.
Setting a maximum (true) odds will reduce your variance. We recommend a max odds of around 2.90. If you want less variance, you can decrease it to 2.50. Unless you're certain you can handle the extra variance and downswings, don't set max odds to higher than 3.50.
Check out this video for more tips on how to handle variance.
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I wouldn't expect you to just take our word that our service works. Instead, we offer you proof.
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Author: Hanna Falkdal, CCO , Customer Support Manager
Hanna is passionate about building relationships — forging strong partnerships with businesses and creating genuine connections with customers. Making sure everyone is happy is always her top priority, along with educating them on how to maximise their sports betting profits. She holds a degree in Journalism.