Implementing a Stop-Loss Strategy for Bankroll Protection in DFS
Implementing a stop-loss strategy to protect your bankroll is essential for any daily fantasy sports player.
Whether you're a seasoned player or just starting out, understanding and applying a stop-loss strategy is crucial for long-term success and financial health in DFS.
Fortunately, we've put together a how-to for creating and implementing your own bankroll protection strategy.
What is a Stop-Loss Strategy?
A stop-loss strategy is a predetermined set of rules or limits that a player sets to prevent significant losses in their bankroll.
Think of it as a safety net; it's there to catch you if things don't go as planned.
If you've been into DFS for any amount of time, then you're aware that things rarely go as planned. Injuries happen, teams get streaky, and the list goes on.
While the stop-loss strategy won't stop you from losing money, it'll minimize the impact losses will have on your long-term DFS strategy.
Some of the best DFS players we know all have a stop-loss strategy in place, and they differ from player to player.
Why is a Stop-Loss Strategy Important in DFS?
As we said, things rarely go as planned in DFS. Of course, you want to win, but there are circumstances out of your control, and these often happen at the most inopportune times.
So why is such a strategy critical for every DFS player?
- Limits emotional decision-making. It's easy to get caught up in the heat of the moment, especially after a loss. A stop-loss strategy keeps your emotions in check, ensuring you don't chase losses.
- Promotes responsible gaming. It's a tool to ensure you're playing within your means and not risking more than you can afford.
- Longevity in the game. By protecting your bankroll, you ensure you can play longer and learn more, increasing your chances of success. It could buy you time to make it through a losing streak and get back on your feet.
You might have your own reasons, but these generally cover all types of DFS players.
How to Implement a Stop-Loss Strategy
A strategy is only as good as the preparations that go into it.
So, we've put together a step-by-step process to implement and make the most of your stop-loss strategy.
- Define your bankroll. Know exactly how much you're willing to allocate to DFS. This could be $100, or it could be $1,000. Be sure to ask your wife before coming up with this number.
- Set a daily or weekly limit. Decide on a percentage of your bankroll that you're comfortable risking in a given period. This will vary from player to player based on your budget as well as how often you play DFS.
- Stick to your plan. Discipline is key. Once you hit your limit, take a break. Simple as that. A stop-loss strategy is no good if you don't follow it.
- Review and adjust. Regularly review your strategy. As your bankroll and skills grow, your limits might change, and they often do — hopefully for the better.
While that seems pretty straightforward, we did put together some examples of how this might look in application—
- If your bankroll is $1,000, you might set a daily stop-loss limit of 5%. This means you stop playing if you lose $50 in a day.
- For a more aggressive approach, a 10% weekly limit on a $500 bankroll means you step back if you're down $50 in a week.
We like the weekly approach as it gives you some flexibility to regain some losses over time.
The Role of Analytics
Leverage analytics to understand your performance.
Tracking wins and losses against your stop-loss strategy can provide valuable insights into your playing style and areas for improvement.
We recommend making a spreadsheet that keeps track of your bankroll, platforms, entries, wins, and losses. This way, you can see what works and what doesn't.
For example, maybe you have a 45% win average with NFL DFS, but you have a 63% win average in NHL DFS. It's hard to see these numbers up close, but when you step back with a spreadsheet and do some analytics, then you can see the big picture.
That would let you know if you need to shift your focus on which games you play.
Build a Stop-Loss Strategy and Dominate in DFS
A stop-loss strategy in DFS is not about limiting your potential; it's about safeguarding your passion for the game.
It's a smart move to ensure that you enjoy DFS for the long run without the stress of significant financial setbacks.
So many players blindly jump into DFS and don't have their ducks in a row. When you're serious about your DFS game, you need to build a stop-loss strategy.