High Variance Games Call for Patience; Low Variance for Consistency

When betting on casino games or sports, volatility refers to how much and how often a game pays out. High volatility games have bigger swings, with less frequent but larger wins and losses. Low volatility games feature smaller, more consistent payouts. As a bettor, volatility should significantly impact your strategy. Let’s explore why it matters and how to tailor your approach.

Bankroll Management Varies by Volatility

Bankroll management keeps your betting sustainable by preventing ruin. To properly size your bankroll, you must consider a game’s volatility.

High Volatility Calls for a Larger Bankroll

High variance games at NeoSpin can rapidly deplete a bankroll through strings of losses. To withstand these swings, your bankroll must be large enough to avoid going broke during cold streaks. Exactly how large depends on factors like your risk tolerance and edge. But at minimum, a bankroll for high volatility betting should be 50+ bets at your typical stake.

Low Volatility Allows a Smaller Bankroll

In low variance games, payouts are smaller but more consistent. Your bankroll doesn’t get depleted as rapidly during losses. This allows you to operate with a smaller stack relative to your typical bet size, perhaps as low as 20-30x your average stake.

In both cases, you must avoid overextending your bankroll based on wins and resist chasing losses from a depleted stack. Carefully consider volatility when initially sizing your bankroll.

Bet Sizing Should Account for Volatility

Along with bankroll considerations, your bet sizing approach should adapt to a game’s volatility characteristics.

Smaller Bets for High Variance

In high volatility games, swings will be severe regardless of bet size. This makes reducing your typical stake wise. Smaller bets let profits from wins accumulate while limiting exposure on each wager, supporting sustainability. Bet sizing for high variance games depends on factors like bankroll and edge, but is often under 2% of your stack.

Larger Bets Possible in Lower Variance Games

In low volatility games, results cluster around the expected return more consistently. This gives flexibility for slightly larger bet sizing, perhaps up to 5% of your bankroll. With the outcomes less extreme in either direction, larger bets remain tenable if your edge, bankroll management and stop loss discipline are sound.

Expectations and Patience Depend on Volatility

Volatility also impacts reasonable expectations around results. The frequency and magnitude of wins, losses and swings affects how patient you must remain.

Patience is Essential in High Volatility Games

High variance leads to extreme volatility short-term, but skill still overcomes luck long-term. But “long-term” means being ready to place hundreds or thousands of bets. Even making +EV wagers, you must prepare for severe downswings at times. Patience during these periods while faithfully sticking to sound strategy based on your edge is imperative.

Lower Volatility Allows Evaluating Results Faster

While no form of betting produces consistent short-term profits, low volatility games generally allow evaluating your performance faster. The smaller up and down swings let you gauge whether your edge is truly positive. If many dozens of wagers show returns consistently falling below expectations, then flaws likely exist in strategy or bet sizing.

Game Selection Based on Volatility Preferences

Some bettors dislike volatile swings and prefer steadier but smaller payouts. Lower variance games like sports betting with tight spreads fit well. But they require notably higher volume for similar profits compared to high variance games.

For those with patience and larger bankrolls, high volatility brings chance for less frequent but larger scores. But be ready for extreme results both positive and negative short-term.

Adjusting Your Approach is Key

While factors like theoretical RTP impact results over extremely long time horizons, volatility drives actual short and mid-term outcomes. Table 1 summarizes how two bettors with different preferences but both having a +EV edge could tailor their approaches based on game variance.

The risk-averse bettor targets steadier results with smaller bets and bankroll. The risk-tolerant bettor is prepared for more volatility by adjusting bet sizing and having ample reserves. Both tailor strategy factoring in game variance.

Adjusting Your Approach to Volatility is Vital

• High volatility games require larger bankrolls and smaller bets to support sustainability through variance swings
• Low volatility supports smaller bankrolls and slightly larger bets since swings are less extreme
• Patience over long time horizons is vital for high variance games; lower volatility allows assessing edge faster
• Your risk preferences should guide game selection; those adverse to large swings prefer low variance
• Tailor your volatility-dependent approach through proper bankroll, bet sizing, expectations setting and game selection

Carefully considering volatility characteristics of the games you wager on and adjusting your strategy accordingly leads to more sustainable profits long-term. Requirements around bankroll size, bet sizing, patience to withstand swings all depend heavily on whether you target high or low variance games. Take time to think through these factors when initially forming your betting strategy and make adjustments over time as you gain experience. This thoughtful approach to volatility sets you up for success.