This article is part of our Ask the Shark series.
I find it quite ironic that since starting this column, the first few slates of the new year have not been kind to me (other than somehow doing well in DraftKings' PGA golf VIP freeroll). Some of the poor results can be chalked up purely to bad luck, but others were definitely due to mistakes of overthinking the situation at hand. Both are susceptible to any player, even a "shark," but it's the reaction to a downswing that separates those hobbyists who treat DFS as gambling versus those who approach it as a job.
Succumbing to what's referred to as "gambler's ruin" has been the root cause of many (even the best of them) going broke, and therefore keeping one out of DFS action for good. While most are well adept on the upswing dynamics of their bankroll - by playing a certain percentage per slate and having that raw dollar figure increase over time as you add winnings - not nearly enough focus on having a proportional dynamic when losing. Many continue to play similar stakes and volume regardless of the downswing, and despite it now resulting in utilizing a much higher percentage of their bankroll per slate that is safe from a ruinous shift in variance.
While it may be a hit to one's ego, don't be ashamed in stepping down in stakes or volume - and definitely don't try to "chase" losses by upping them, either. If you're playing in +EV conditions and have shown to get
I find it quite ironic that since starting this column, the first few slates of the new year have not been kind to me (other than somehow doing well in DraftKings' PGA golf VIP freeroll). Some of the poor results can be chalked up purely to bad luck, but others were definitely due to mistakes of overthinking the situation at hand. Both are susceptible to any player, even a "shark," but it's the reaction to a downswing that separates those hobbyists who treat DFS as gambling versus those who approach it as a job.
Succumbing to what's referred to as "gambler's ruin" has been the root cause of many (even the best of them) going broke, and therefore keeping one out of DFS action for good. While most are well adept on the upswing dynamics of their bankroll - by playing a certain percentage per slate and having that raw dollar figure increase over time as you add winnings - not nearly enough focus on having a proportional dynamic when losing. Many continue to play similar stakes and volume regardless of the downswing, and despite it now resulting in utilizing a much higher percentage of their bankroll per slate that is safe from a ruinous shift in variance.
While it may be a hit to one's ego, don't be ashamed in stepping down in stakes or volume - and definitely don't try to "chase" losses by upping them, either. If you're playing in +EV conditions and have shown to get consistent +ROI results, stick to the plan. Your whole long-term goal is to balance the maximization of profits with the minimization of risk. Altering your already sound approach to bankroll management will just accelerate things in either direction, and that's an unsustainable recipe for success playing DFS profitably in the long run.
My suggestion for dealing with downswings? Consider tackling the next few slates even more conservatively than you otherwise would. Poor results inevitably instill a lack of confidence in one's ability, so there are even psychological factors at hand to dialing it back. Play much lower stakes/volume, play fewer lineups versus multi-entering, roster more chalk versus being contrarian, etc. Get back to the basics and use this as an opportunity to make sure your DFS fundamentals are well calibrated. Your bankroll will thank you.
Speaking of bankroll management, onto this week's most relevant question:
Q: If you play 10% of your bankroll per slate, should you enter lots of lower priced contests versus just a few higher priced ones? - Ethan Sexton, @RW_Sexton
From an expected value perspective, you should enter contests where your edge against opponents is the largest regardless of stakes. The more weaker opponents in a contest, the more profit you should expect versus contests that have stronger opponents. With a bankroll of infinity, this would be the only factor to consider.
Unfortunately, no one plays DFS with an unlimited bankroll so the risk of ruin has to be a mitigating factor in contest selection. Even as a +ROI player, managing the statistical variance in your results is a huge part of your long-term profitability and sustainability.
In statistics, variance is defined by how far a set of numbers are spread out from their mean. The more numbers that are in such set, the closer the variance will be. This is why it's nearly impossible to accurately judge one's results from only a small number of events - but as the number of events increases, the more likely you can judge them accurately. For example, picture one basketball player sinking two of two free throws versus another who has hit 98 of 100. While one has a 100 percent success rate versus the other's 98 percent, you're much more likely to concede that the latter player is a supremely better-free throw shooter because it's been shown to be true over the course of many more attempts. The former's success rate is highly variant and cannot hold up to scrutiny mathematically.
Because of this, it's usually best in DFS to spread out your action into many lower-priced contests versus utilizing the same exact volume into a few higher-priced ones. This way, it's much more likely that your overall performance for the slate is accurate rather than at the whims of the results of a select few opponents in the select few contests you happened to enter. The more contests and more differentiated exposure to opponents that are contained in a set of results, the lower your variance will be.
Please be aware, though - and this is very important - that decreasing your variance doesn't increase your profitability. In fact, one doesn't relate to the other much, if at all. All you accomplish by decreasing variance is making your results more likely to be accurate of your skill, which could still be net negative. In and of itself, spreading action out wide rather than thin won't turn a losing player into a winning one, it'll just make the swings in your bankroll less dramatic.
If you would like to submit a question for this weekly column, feel free to either post it in the comment section below, tweet it to me @blenderhd, or email me at jordan@fantasyflush.com.
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