Is flat staking good for value betting?

Hello. I hope you are well. I was looking at past conversations in this group and came across something about using the kelly or flat stake criteria. Well, I want to give my opinion on that. I prefer to use flat stake. The reasons are:

  • Since I bet the same amount on each bet, I reduce the probability of losing a good percentage of my bankroll when the big bets are lost. If you had used Kelly for a + 9% edge bet with odds of 1.60, the software would probably suggest betting a large amount. Now, if a losing streak causes me to lose these types of bets, obviously it will affect my bank and it will be very difficult to recover the lost money.

  • When you are betting on value bets, you won’t know if your bet really has value until the start of the match and the closing odds are settled. Of course value bets beats the closing line almost 80% of the time (or so I read) but again, it is not certain that the initial placed edge will be the same as the closing edge. So sometimes if a bet has +9% starting edge, it will end with -9% or maybe +5.4%.

  • I also read from some forum that value shrinks by 40% on average from bet placement. So if you place vb with 2% avg edge, your expected yield will be 1.2%, which is good if you have a large daliy turnover. So It doesn’t matter if I use flat or kelly stake, I should end up with profit since I have a +EV right? Well that’s what your analysis tool shows.

Of course, using Flat Stake has downsides. You must be aware of them. Personally, I would use a flat bet with a minimum initial edge of + 5% and odds less than 3. I would like an opinion from someone who has experience using Kelly or Flat Stake. This is my humble opinion, thank you ! Flat stake when using value bets! Is flat stake good for value betting?

TL/DR: Fractional Kelly criterion staking (30%) with a max bet size (1-2%) is much more profitable compared to flat staking, with just a small increase in max drawdown risk.

I actually ran a test to see what would happen if our members would have used flat staking instead of Kelly.

Max drawdown is a good indicator of variance. The difference in profit indicates how long it will take to recover from a loss.

Flat staking results (compared to Kelly):

Members placing 500 bets or more: No difference in average or median max drawdown. Profit decreased 10%. Same yield (because of smaller turnover).

1000 bets: Same.

3000 bets: Max DD decreased from 18,3% to 17,2% - no other change.

Conclusion: running our default settings of Kelly 30% and max bet size 1.5% is recommended compared to flat staking.

Be careful running Kelly with max stake 3% or more, that will probably lead to larger drawdowns.

@Simon what are your thoughts on this situation?..

Using sharp bookies doesn’t allow me to follow the Kelly staking criteria… some markets you can bet big, and some markets I am limited to $6. If bet amounts are way out of sequence with kelly or even flat betting, would this pose a problem? Example, some bets $6, some bets $200. Would this smooth out over time as all bets are staked at positive EV, or could this wipe out a bankroll quick?

As long as you keep your highest bet sizes within 1-2% of total bankroll there is no extra risk of placing small bets as well.