Definition
What is bankroll management?
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Definition
Bankroll management is the discipline of sizing bets, capping exposure, and protecting principal across a series of bets so that variance cannot ruin you. The core levers are Kelly fraction, per-bet cap, correlated-exposure cap, and drawdown guardrails.
Bankroll management is the difference between a strategy that survives variance and a strategy that doesn't. Even a real +EV strategy with bad bankroll management goes bust. Real bankroll management means defining limits in advance, enforcing them in software, and respecting them when the temptation to "press" hits during a hot streak (or a cold one).
The four levers
- Kelly fraction (0.25× is the standard)
- Per-bet max (2% bankroll typical)
- Correlated-exposure max (sum of bets that could resolve together)
- Drawdown halt (25% max drawdown typical)
Why software has to enforce
During a losing streak, every operator wants to “press” to recover. During a winning streak, every operator wants to “press” because it’s working. Both impulses break bankroll management. The only reliable enforcement is software refusing to size above the limits.