Standard Deviation & What a Downswing Looks Like

## Standard Deviation in Betting Standard deviation (SD) measures the spread of results around the average. In betting, it tells you how wild the swings will be. For a flat-staking bettor at odds of 2.0 (evens), the SD per bet is approximately 1 unit. Over 100 bets, the SD of total profit is approximately √100 = 10 units. This means a one-standard-deviation downswing at breakeven means being 10 units down over 100 bets — through pure luck. ## What a Realistic Losing Run Looks Like A bettor with a genuine 5% edge, betting at average odds of 2.0: - Expected profit over 100 bets at 1 unit/bet: +5 units - Standard deviation: ≈ 10 units - One SD below expectation: –5 units (a 5-unit loss despite a real edge) - Two SDs below: –15 units Losing runs of 15–20 consecutive bets can happen even with a genuine edge. This is not a reason to panic — it is a reason to have planned for it. ## Using This Knowledge Before starting any system, calculate the expected drawdown range. If your bankroll cannot withstand a 2 SD downswing without going broke, your stakes are too high. Most professionals plan for a 3 SD downswing to be safe. This calculation is the foundation of bankroll management — it connects the variance of your strategy to the stake sizes that keep you in the game.