Course No. ABM 405
Chapter 5: Risk, We Talking About Risk?
Welcome to Chapter 5 of Daily Fantasy Cafe's Advanced Bankroll Management Series. In this chapter you will be introduced to risk associated with daily fantasy games.
In this chapter we will talk about.
What is Risk within DFS?
How does it directly impact your results and bankroll?
In previous articles we have discussed the risk associated with specific games that you can register. For example, a qualifier has more defined risk than a GPP which has more risk than a head to head game. We previously outlined this but in short, in theory, if you played 10% of your bankroll either on entirely qualifiers, GPP or head to head games you would be far likely to go broke playing qualifiers than head to head.
If you are interested in learning more about game selection please go and read chapters one through 4 of the series.
Risk Within DFS
Below we will discuss the significant day-to-day risks with daily fantasy play and in our next chapter discuss how we can mitigate these risks.
Let's face it, injuries are going to happen and no statistical model will be able to provide you an accurate projection on a day-to-day basis. Of course an aging NFL running back is more prone to injuries than a younger player but what affect does that have on our selections? The answer is none.
Given the fact injuries are completely unpredictable we must be aware of this and understand it is variance and part of the game. You will play daily fantasy and I promise you, if you haven't already, will get burned by a player that turns an ankle or gets poked in the eye – it's the nature of the sport.
One way you can specifically mitigate your risk associated with injuries is by monitoring player news and beat writers. If you are targeting all players that are listed as questionable or game time decisions you will, without a doubt, have many more late scratches or missed plays than a player that entirely avoids these situations. Correctly assessing the value and risk associated with that player will be the key to your success.
Think of a late scratch as a much more difficult to predict than injury news. This is much more common within NBA than any other sport. A late scratch is when a player has zero injury news regarding their situation and ultimately, after the lineups lock, are deemed out for the night. This is a situation that will occur much more frequently in the NBA rather than other sports but something to understand and deal with. Getting upset, tweeting to the player or complain on forums may make you feel better but it is bad for the industry and your player perception. Understand this as part of the game and move forward.
In our next chapter we will discuss player exposure, which will help mitigate the risk of late scratches.
Ask anyone how predictable a weatherman is- go ahead I dare you. The most common response is , “ I could be a weatherman, they don't know if its going to rain or snow." This however, is another risk associated with daily fantasy players that typically affects NFL and MLB players much more than NBA (although NBA can be affected during winter months.
As daily fantasy players we must monitor weather reports and make educated guesses by using your own research and wisdom of the crowd approach on the severity of the weather concern. If multiple sources and your research tell you there is a risk of cancellation then playing batters in that game brings out significant risk. The same goes for NFL, targeting a pass heavy offense in a northeaster is going to limit the upside of that offense. By targeting players in bad weather you are creating risk for yourself. We talked earlier increased risk in player selection means increased risk in your bankroll. If you do decide to target a pitcher in good matchup but negative weather conditions, understand this and allocate your bankroll appropriately.
Targeting Players in Perceived Bad Matchups of Situations
While this seems like a completely ridiculous idea we have to remember we are constructing lineups based on industry perception and ultimately humans that are fragile. We cannot accurately predict any athlete's performance with zero error. With that being said, targeting strong players in poor matchups is a strategy that I utilize in tournaments to increase my upside when they hit due to ownership percentage. While this can be a very profitable strategy over the long term, in the short term it creates a significant amount of risk that is directly created by you the player yourself.
Understand these risks and like said before, properly allocating your bankroll based on the risk will help you as a player.
Impact on Bankroll
In short, targeting players with perceived risk is going to inherently increase the risk of your bankroll. A daily fantasy sports player targeting high-risk players will need to adjust his bankroll requirements or player exposure to compensate for these risks.
This chapter was meant to plant the seed in your head on thinking about every player you decide to enter into your lineups and the perceived risk that is associated with them.
In the following chapter, we will discuss how we can limit player exposure, use multiple lineups and change bankroll strategies based on the amount of risk we want to accept.