Risk of Ruin
Definition
The probability of losing your entire bankroll. Proper bet sizing and bankroll management minimize this risk.
Example
Betting 50% of your bankroll per bet dramatically increases risk of ruin.
Related terms
Bankroll
The total amount of money you have dedicated to betting. Proper bankroll management is crucial for long-term success.
Unit
A standardized bet size, typically 1-2% of your total bankroll. Using units allows consistent comparison regardless of bankroll size.
ROI (Return on Investment)
The profit or loss expressed as a percentage of total amount wagered. A key metric for evaluating betting performance.
Variance
The natural fluctuation in results due to randomness, even when making +EV bets. Short-term results can differ significantly from expected value.
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