Gambling for money is a serious business no matter how much fun it appears to be on the surface. If you are risking real money it makes a game more exciting, but also, potentially, more painful. Therefore, a good betting strategy is an absolute must. Here is the first rule of gambling.

The first thing a person must do before playing for high stakes is to determine just how much will be in his or her bankroll. Your bankroll will determine just how large your bets will be based on your expected rate of return. Before you play a game or place a bet on a horse race, do you know how often you will be successful? If not, how do you know how large your bets will be and how many you can make without losing everything?

Here is the cardinal rule for successful betting...

"Protect your bankroll at all costs." Preservation of your starting capital is your first concern.

That means, know the odds and chances of recouping your bets plus a profit before you wager. For instance, let's say your bankroll is ten thousand units. Each unit may be an American dollar, Euro, Franc, or any other denomination, depending upon your nationality and place where the gambling is to take place. If you have ten thousand units and have determined that you will average a win every 10 bets and that the longest runs of losses in a computer simulation is 100 misses without a win, then you must be prepared for the worst case scenario in order to protect, or preserve your bankroll.

Since 100 misses is the most you expect and your bankroll is ten thousand units, divide your bankroll by 100 and you arrive at 100. So 100 units is the absolute most you should wager on any one bet or on any series of bets. Now here is another thought, how much profit do you intend to make and how much of a cushion do you need to keep your sanity. Remember the axiom, "Scared money never wins."

If risking too much will move you out of your comfort zone and begin affecting your decision making, then you need to reduce your wager amounts to a comfortable level. Just because your calculations show that you can use 100 units each time you take a chance, it doesn't mean you have to do that. Preserve your bankroll and your sanity and make good decisions. That is good betting strategy and will make your adventures as a risk taker much more enjoyable.

In our next article we'll look at reasonable expectations and return of investment.