Understanding Variance and Managing Upswings and Downswings in DFS

Matt Brown
By Matt BrownPublished: March 4, 2024
Understanding Variance and Managing Upswings and Downswings in DFS

DFS offers players the thrill of assembling virtual teams and competing for real money on a daily basis. While the allure of big wins is what generally brings in the masses, the path to DFS success is fraught with variance — essentially the highs and lows that come with any form of gambling or investing. It's not isolated to only DFS, but since that's what we do, that's what we're talking about.

Understanding this concept and learning how to manage the inevitable upswings and downswings is essential for any DFS player looking to stay in the game long-term.

What is Variance?

Variance, in the DFS market, refers to the fluctuations in your performance and results over time. It's a statistical measure that describes the spread between your wins and losses.

High variance means your results can swing dramatically in either direction, leading to significant winning streaks or losing droughts.

On the other hand, low variance is characterized by more consistent, predictable outcomes.

However, when it comes to DFS, where skill, strategy, and luck intermingle, expecting low variance is unrealistic. While we wouldn't go as far as to say it's not for the faint of heart, we recommend that you have a bankroll management plan to handle the ebbs and flows of DFS.

The Emotional Rollercoaster of DFS

The ups and downs of DFS can be a real emotional rollercoaster.

Winning big can make you feel invincible, pushing you to take bigger risks. You get the adrenaline pumping, and the endorphins are going wild, so you want to up the ante to see if you can bring in even more.

On the other hand, a series of losses can lead to doubt, frustration, and even the temptation to chase losses with increasingly risky bets.

It's important to recognize these emotional responses as natural but also to understand that they can cloud judgment and lead to poor decision-making.

That's why you need to have a plan and stick to it. Your bankroll plan to manage these variances may evolve over time, but it will keep you from chasing the high or the losses and keep you in the game longer.

Strategies for Managing Variance

As we mentioned, you need to have a game plan. Fortunately, there are a few things you can do to tackle the variance head-on.

Keep a Level Head

First and foremost, maintaining emotional composure is key. The emotions will be there, but you have to keep moving through logic, not emotions.

Celebrate your wins, but don't let them go to your head. Learn from your losses, but don't dwell on them.

Keeping a level head will help you make rational, informed decisions rather than emotional, reactive ones.

Bankroll Management is Crucial

One of the most effective ways to manage variance is through careful bankroll management.

If you've followed us for any amount of time, then you know we preach bankroll management quite a bit. It's because it's how the pros play DFS and generally what separates them from the casual players.

Bankroll management means only risking a small percentage of your total bankroll on any given contest. A common rule of thumb is to not risk more than 2-5% of your bankroll.

Of course, this will change based on your risk tolerance. For those that are a bit more risk averse, you may go with something closer to the 2%, whereas someone with more of an appetite for risk might go with the 5%.

So, for example. Let's say you sign up for OwnersBox and want to start playing DFS. You get the OwnersBox promo code and make a deposit of $100, and they match it, so you have $200 in your account. So your bankroll is $200. For each DFS contest you enter, you'll want to keep it between $4 and $10 per entry. You might not win as much as if you entered a $100 contest, but you'll be in the game longer if you lose.

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This strategy helps ensure that no single loss can significantly impact your overall financial situation, allowing you to weather the storm of downswings.

Diversify your Entries

Just like in investing, diversification can help manage risk in DFS. We see a lot of new DFS players playing a single lineup across multiple contests. You need diversification.

Instead of putting all your eggs in one basket, spread your entries across different types of contests—cash games for more stable returns and tournaments for higher variance but potentially higher rewards.

On top of that, playing multiple lineups in tournaments can spread out your risk and increase your chances of hitting a big score.

Unfortunately, DFS platforms like DraftKings make it too easy to copy a single lineup and enter multiple contests. Think about it; if it's easier to do, it's probably not the best strategy.

Study and Adapt

The DFS industry is constantly evolving, with player performances, team dynamics, and even the sports themselves changing from season to season.

Staying informed and continually refining your strategies based on the latest data and trends is crucial.

The more you understand the nuances of the sports and contests you're entering, the better equipped you'll be to make decisions that reduce variance.

For example, in the last year, AI has been making a run across almost every industry imaginable. We're already seeing AI in the DFS and sports betting industries. If you're not adapting to the times, your competition is, and they're going to run laps around you.

Build a Support Network

Having a support network of fellow DFS players can be invaluable, even if you're a hermit.

Sharing experiences, strategies, and insights can help improve your game and provide moral support during tough times. We all go through them.

Whether it's through online forums, social media groups, or in-person meetups, being part of a community can make the ups and downs of DFS more manageable.

Ride the Highs and Lows of DFS

Variance is an inescapable aspect of daily fantasy sports, representing both the challenge and the allure of competing for big prizes on a daily basis.

By understanding what variance is and implementing strategies to manage the emotional and financial impacts of ups and downs, players can maintain a healthy perspective and improve their chances of long-term success in DFS.

The key to managing variance isn't just about minimizing losses but also about making informed, strategic decisions that maximize your potential for wins, all while keeping the game enjoyable and sustainable.

Matt Brown

Matt Brown

Head of DFS

Matt's deep-rooted enthusiasm for sports betting and daily fantasy sports infuses the EatWatchDraft team with valuable expertise in football, hockey, and baseball. His forward-thinking perspectives are grounded in a solid academic foundation, including a B.S. in Aeronautical Computer Science and an M.S. in Project Management. This combination of sports passion and technical knowledge fuels Matt's innovative input to the platform.