Setting a minimum and a maximum strategy is important to ensure that you 1) you don’t lose your house 2) that you realize some sort of gains.
A minimum and maximum strategy is basically a cash out policy. Let me go through an example here:
Let’s say your min-max strategy is 800/1000 this is where you will make an initial investment of $200 (1/4th of your minimum and not a penny more), once you make $1,000 you cash out – leaving you with your original $200. If you get up to $1,000 dollars again, you cash you again.
Now, what about if you lose the $200? You have to wait until the next quarter to invest another $200. This strategy will ensure that you will never lose more than $800/year – and if you are lucky enough to cash out once, then you’ve guaranteed that you’ve made at least $200 for that year.
Setting your minimum is important – this number should be whatever you are OK with losing in a year. If you are fine losing $800 a year, then that gives you – essentially – $200/quarter to gamble.
But wait! I only gamble for one sport – does this still apply to me?
Good question – and yes it does. The point of the min-max strategy is to ensure that you don’t lose more in a given year than what you are comfortable with, but also giving you money to gamble with throughout the year. So in this case, you could break up your sports season into 2 or 4 sections and utilize the min-max strategy that way.
My min-max strategy is 800/1000, I’ve cashed out once – but early in the 4th qtr I lost it all on one game. Is it OK to put in more money given that I’ve cashed out once?
No, not according to our min-max strategy. You should wait until the next qtr to invest anymore money. Waiting is important, it will prevent you from trying to chase your losses.
My min-max strategy is 200/500, so in the 1st quarter I put 50 bucks, I’m now into the 2nd quarter, and have lost it all. Because I didn’t put any money in for the 2nd quarter, its OK that I put in another $50 now right?
Yep, its your money. Again, the main point of the min-max strategy is to ensure that you don’t lose more money than you are comfortable with in a years time – but also giving you money throughout the year incase you do lose it all in a given quater.
Likewise, if you put in $50 bucks in the 1st qtr, and it lasted until the 4th qtr, but then you lose it all – you can put in another $50 bucks. If you lose that, you can put in another $50 bucks. Lastly, if you lose that as well (you might want to consider changing what you’re doing) you still have on last $50 that you can bet. However, if you manage to lose that as well – your quarter is over. You really need to wait until the qtr to place anymore money.