How do people choose the right stakes when placing sports bets?

A friend of mine says he adjusts his stakes based on how confident he feels about a match, but I keep noticing that different bettors use completely different approaches. Some look at team form, others trust long-term stats, and a few just go with instinct.
How do experienced bettors decide what stake size makes sense for a particular event, and what factors usually guide them when they set their stake strategy?