[TravisVOX]

Let's say you have a wagering system that produces, on average, a 2-percent loss. However, you receive, on average, a 5-percent rebate on your action.

Given the above scenario, what is the optimum way to maximize your return/profit? For example, when calculating Kelly, do you juice the projected payoff/return by 5%? I'm not too particularly math oriented so looking for some input. Thanks!

[Foxx]

I would reduce the bet size as opposed to increasing the return. If it is an even money bet with a 5% rebate that is not contingent on the outcome, instead of risking 1.00 to profit 1.05 if you tack the 5% on to the payoff, you are risking .95 to win 1.00.

You seem a little green though, so I would first be much more preoccupied with whether or not you in fact have an actual edge and less concerned with how to maximize a theoretical edge.

Best of luck.

[u21c3f6]

Assuming that your numbers are correct and you lose 2% of the amount wagered and get a 5% rebate on the amount wagered, then your edge is 3% is for Kelly purposes. Joe.

[zlaroc]

Warriors !!!

[KVB]

Let's say you have a wagering system that produces, on average, a 2-percent loss. However, you receive, on average, a 5-percent rebate on your action.

Given the above scenario, what is the optimum way to maximize your return/profit? For example, when calculating Kelly, do you juice the projected payoff/return by 5%? I'm not too particularly math oriented so looking for some input. Thanks!

If you didn't develop this system yourself don't even think about using Kelly Criterion for bet size. Simply put, Kelly criterion does not work for sportsbetting, no matter what any other math guys, modelers, and even syndicate representatives say.

Any efforts to show the Kelly betting is anything more than amateur hour are going to be completely hindsight and costly and a bettor such as yourself would be putting your bankroll at a ridiculously unnecesary risk.

This is especially true for you because you don't have an edge, you have a negative expectation. If a bonus or rebate is what you a relying on to gain a positive expectation then don't even approach attempts to maximize some kind of profit, especially the bogus Kelly Criterion.

You should be flat betting.

Successful long term professional gamblers may occasionally change bet size for certain reasons but none of them use Kelly with any regularity. If they are, they are likely wasting there hard earned handicapping results...and they don't even know it.

Changing your bet size changes your breakeven point, keep those bets flat.

[Foxx]

If you didn't develop this system yourself don't even think about using Kelly Criterion for bet size. Simply put, Kelly criterion does not work for sportsbetting, no matter what any other math guys, modelers, and even syndicate representatives say.

Any efforts to show the Kelly betting is anything more than amateur hour are going to be completely hindsight and costly and a bettor such as yourself would be putting your bankroll at a ridiculously unnecesary risk.

This is especially true for you because you don't have an edge, you have a negative expectation. If a bonus or rebate is what you a relying on to gain a positive expectation then don't even approach attempts to maximize some kind of profit, especially the bogus Kelly Criterion.

You should be flat betting.

Successful long term professional gamblers may occasionally change bet size for certain reasons but none of them use Kelly with any regularity. If they are, they are likely wasting there hard earned handicapping results...and they don't even know it.

Changing your bet size changes your breakeven point, keep those bets flat.

Solid post man

[MonkeyF0cker]

If you didn't develop this system yourself don't even think about using Kelly Criterion for bet size. Simply put, Kelly criterion does not work for sportsbetting, no matter what any other math guys, modelers, and even syndicate representatives say.

Any efforts to show the Kelly betting is anything more than amateur hour are going to be completely hindsight and costly and a bettor such as yourself would be putting your bankroll at a ridiculously unnecesary risk.

This is especially true for you because you don't have an edge, you have a negative expectation. If a bonus or rebate is what you a relying on to gain a positive expectation then don't even approach attempts to maximize some kind of profit, especially the bogus Kelly Criterion.

You should be flat betting.

Successful long term professional gamblers may occasionally change bet size for certain reasons but none of them use Kelly with any regularity. If they are, they are likely wasting there hard earned handicapping results...and they don't even know it.

Changing your bet size changes your breakeven point, keep those bets flat.

Fact: You will never go broke staking with Kelly.
Fact: Many successful financial traders and sports bettors implement the Kelly Criterion, including Billy Walters.
Myth: People who claim that Kelly is "amateur hour" understand the Kelly Criterion.

[KVB]

Fact: You will never go broke staking with Kelly…

It’s suicide. Say you have an edge of 60%. Calculate the Kelly stake and figure it out for yourself. Take a box with 6 winning white tickets and 4 losing black tickets. Fire away and track your bets. You’ll be broke in 30 minutes.

I’d love to see a handicapper alive after 200 bets risking 16% of his current bankroll, especially after having to lay multiple bets at time, sometimes five or six. Read that again.

…Fact: Many successful financial traders and sports bettors implement the Kelly Criterion, including Billy Walters…

I’m solely talking about sports betting here and not about other markets. I am aware of the debates there as well.

Successful sports bettors often use an adjusted Kelly stake but it is still likely costing them money. Even the most successful bettors out there get these principles wrong.

Name dropping Billy Walters is about as “amateur hour” as it gets bro. I hear Warren Buffet use some form of Kelly Criterion too.

Myth: People who claim that Kelly is "amateur hour" understand the Kelly Criterion.

I have no problem with the system; it works well, as any betting system would, as long as long as the winning expectations are met.

But this is sportsbetting and the percentages will vary from the expectation as the reality of standard deviation sets in.

If you want to deal in facts, know that mathematical fact is a bettor’s next 20, 25, or even 30 bets are NOT likely to be settled (won or lost) at a rate in line with the long term winning expectation…not at all.

This pretty much blows the true Kelly staking strategy out of the water for sportsbetting, especially for the OP.

[HeeeHAWWWW]

I’d love to see a handicapper alive after 200 bets risking 16% of his current bankroll, especially after having to lay multiple bets at time, sometimes five or six. Read that again.

Those sorts of edges imply the model is severely at fault, and drastically over-estimating your edge. Yes, Kelly will kill you if you consistently over-estimate your edge (eg twice Kelly optimal stake has zero expected bankroll growth). Yes, lots/most people do exactly that, and shouldn't be using Kelly.

That doesn't mean it's unusable, but like any statistical tool if you violate the assumptions, the outcome is drivel. It's like all those people plugging a regression into excel, and not checking for variable independence, heteroscedasticity etc.

I'd suggest anyone wanting to use Kelly needs 5+ years of backtests (properly done! no future knowledge at any stage), and compare edge estimates with outcome. In pretty much every model I've ever used, there's a gap at the bottom end, ie edges of <0.02 result in no profit. Also, above that it tends not to be a 1:1 slope, and often plateaus (this makes sense instinctively, as extreme predicted edges are likely to be the cases where there's important information your model is missing).

[trytrytry]

If you didn't develop this system yourself don't even think about using Kelly Criterion for bet size. Simply put, Kelly criterion does not work for sportsbetting, no matter what any other math guys, modelers, and even syndicate representatives say.

Any efforts to show the Kelly betting is anything more than amateur hour are going to be completely hindsight and costly and a bettor such as yourself would be putting your bankroll at a ridiculously unnecesary risk.

This is especially true for you because you don't have an edge, you have a negative expectation. If a bonus or rebate is what you a relying on to gain a positive expectation then don't even approach attempts to maximize some kind of profit, especially the bogus Kelly Criterion.

You should be flat betting.

Successful long term professional gamblers may occasionally change bet size for certain reasons but none of them use Kelly with any regularity. If they are, they are likely wasting there hard earned handicapping results...and they don't even know it.

Changing your bet size changes your breakeven point, keep those bets flat.

imo
this is terrible advise

the quicker a starting or any gambler can understand only wager +EV situations and start to figure out that bet size should change with expected probability of winning and offered odds )aka kelly or something like it as a general approach) the better long term results will be, and a lot better in fact. Now do you really sit with every single wager and do a tru kelly calculation and bet that exact amount, obviously not, too hard to do with multiple wagers, limits on certain things, even emotionally a person might not be able to handle a fully recommended Kelly bet size and lead to tilt etc etc. but that general trend to vary bet sizes based on % chance of winning and the EDGE of the bet is important to think about for every +EV wager you put in.

[MonkeyF0cker]

It’s suicide. Say you have an edge of 60%. Calculate the Kelly stake and figure it out for yourself. Take a box with 6 winning white tickets and 4 losing black tickets. Fire away and track your bets. You’ll be broke in 30 minutes.

I’d love to see a handicapper alive after 200 bets risking 16% of his current bankroll, especially after having to lay multiple bets at time, sometimes five or six. Read that again.

And as I stated previously, you don't understand Kelly. You don't wager 16% of your peak bankroll. You wager 16% of your current bankroll at full Kelly.

I’m solely talking about sports betting here and not about other markets. I am aware of the debates there as well.

Successful sports bettors often use an adjusted Kelly stake but it is still likely costing them money. Even the most successful bettors out there get these principles wrong.

Name dropping Billy Walters is about as “amateur hour” as it gets bro. I hear Warren Buffet use some form of Kelly Criterion too.



I have no problem with the system; it works well, as any betting system would, as long as long as the winning expectations are met.

But this is sportsbetting and the percentages will vary from the expectation as the reality of standard deviation sets in.

If you want to deal in facts, know that mathematical fact is a bettor’s next 20, 25, or even 30 bets are NOT likely to be settled (won or lost) at a rate in line with the long term winning expectation…not at all.

This pretty much blows the true Kelly staking strategy out of the water for sportsbetting, especially for the OP.

It doesn't matter if you flat bet or stake with Kelly. If you consistently fail to estimate your edge properly, you will lose money. You're more than welcome to try debunking a simulator that I coded years ago and posted here and tell me how wrong I am: http://www.sportsbookreview.com/foru...conundrum.html

[MonkeyF0cker]

If you're still a disbeliever, I will gladly put up any amount of money against yours in the example you gave (with a clear 60% win expectation). I will wager at full Kelly and play the game out until one of us is broke.

[KVB]

Those sorts of edges imply the model is severely at fault, and drastically over-estimating your edge. Yes, Kelly will kill you if you consistently over-estimate your edge (eg twice Kelly optimal stake has zero expected bankroll growth). Yes, lots/most people do exactly that, and shouldn't be using Kelly...

I gave you no estimations. I gave you 6 white tickets and 4 black tickets. There is nothing theoretical about it.

Now, at -110 odds bet 16% of your bankroll and fire away. Good luck lasting 200 plays.

There’s theory, and then there’s reality. And you are right about people using poor adjusted Kelly numbers.

[KVB]

...I'd suggest anyone wanting to use Kelly needs 5+ years of backtests (properly done! no future knowledge at any stage), and compare edge estimates with outcome. In pretty much every model I've ever used, there's a gap at the bottom end, ie edges of <0.02 result in no profit. Also, above that it tends not to be a 1:1 slope, and often plateaus (this makes sense instinctively, as extreme predicted edges are likely to be the cases where there's important information your model is missing).

Solid post here. All that backtesting is great but once you start betting it is essential to apply the model to the current, recent performing marketplace…a smart analyst could increase your profit immensely.

[KVB]

imo
this is terrible advise

the quicker a starting or any gambler can understand only wager +EV situations and start to figure out that bet size should change with expected probability of winning and offered odds )aka kelly or something like it as a general approach) the better long term results will be, and a lot better in fact. Now do you really sit with every single wager and do a tru kelly calculation and bet that exact amount, obviously not, too hard to do with multiple wagers, limits on certain things, even emotionally a person might not be able to handle a fully recommended Kelly bet size and lead to tilt etc etc. but that general trend to vary bet sizes based on % chance of winning and the EDGE of the bet is important to think about for every +EV wager you put in.

...Simply put, Kelly criterion does not work for sportsbetting, no matter what any other math guys, modelers, and even syndicate representatives say...

I wrote this for a reason; not to troll, but to bring about this discussion. I was hoping some knowledgeable readers would chime into this thread. It seems much of the Forum doesn’t even discuss relevant topics for winning bettors.

I’m glad everyone’s chiming into this thread.

Thanks for checking in Triple Try. I get the general trend you are looking at and how it can, or could, reach a high bankroll growth. The middle of your post, offering something “like” Kelly or not even calculating every wager or the emotional factors seem to agree with me.

I mention in this thread that an adjusted criterion can sometimes be used, I use one myself in a separate bankroll but don’t think this OP, who is losing 2% and “not too particularly math oriented” should even go there.

I want to address this more and share some true business aspects of money management for successful bettors; it may be a lengthy post and even take its own thread.

[KVB]

And as I stated previously, you don't understand Kelly. You don't wager 16% of your peak bankroll. You wager 16% of your current bankroll at full Kelly…

I have never used the term “peak bankroll” in an SBR post. I have only been talking about the current bankroll, which means the bet is adjusted after every settled bet. To simplify things, keep it one bet a time.

…You're more than welcome to try debunking a simulator that I coded years ago and posted here and tell me how wrong I am: http://www.sportsbookreview.com/foru...conundrum.html

This was the kind of talent I had hoped to pull out of the woodwork with my post. This is a great spreadsheet and you have skills but unfortunately it isn’t relevant to this discussion.

Your spreadsheet compares the performances of two different progressive betting schemes. Each bankroll in the simulation bets a different amount for each simulated wager. There is no simulation for a flat betting bankroll, which is betting the same amount each time.

Betting the same percent of current bankroll is not flat betting. Because the bankroll changes with each settled bet, one may be betting a “flat” 1%, but that bettor is allowing his risk to fly all over the place, risking different amounts each time...that is costly and foolish.

Betting a certain percent of a starting bankroll is flat betting. Betting the same monetary amount each time is flat betting.

Also, if I’m reading that spreadsheet correctly the simulation runs with a minimum and maximum price or line range. Yet, the “flat” betting percentage is based on the amount bet “TO WIN.” If I’m reading that correctly then in the same simulation, with an equal bankroll, sometimes the “flat” bankroll could bet different amounts.

Quite frankly, because of the logic involved, I’m not sure if I am reading that correctly. I’m reading the parameters as saying that with a $10,000 bankroll the “flat” bankroll, say always betting an input of 1% would risk $100 on even money bets, to win $100. But if the simulation ran a -200 bet at that same $10,000 level, using the same 1%, the “flat” bankroll will be betting $200 to win $100.

If I am correct, then I’m not really sure what part of the “flat bankroll” and “flat wager” is actually adhering to the word “flat.” The guy managing that bankroll has little chance of profiting.

In your spreadsheet, both progressive schemes will change the bettor’s breakeven point, and not for the good. Both schemes will cost the bettor money.

Nice spreadsheet though it doesn’t really tell us much as nobody should be sports betting, under any circumstances, betting the spreadsheet’s version of “flat betting.”

Good handiwork in Excel.

[MonkeyF0cker]

So, you're advocating betting the same amount on a +200 as a -200? So, if you actually build your bankroll, you're going to keep betting the same amount in perpetuity? And you think that's going to be a more successful staking strategy after running the simulations?

Note: Flat betting is almost universally considered a "to win" wager amount. Just because you're stuck on semantics doesn't make the definition different for the vast majority of bettors.

[KVB]

…So, if you actually build your bankroll, you're going to keep betting the same amount in perpetuity?...

Of course not. There is an optimal strategy and it guides the long answer to your question. It’s the whole reason I even attacked Kelly with sports betting. I was going to introduce some pointers. Like I posted above it may take a long post because of the basics needed to explain how to run sports betting as a business. Many of the readers know too many things that aren’t true. This optimal strategy I’m talking about was developed years ago by some of the most sophisticated and successful sports handicappers in the world. In fact, the same program and conclusions were arrived at independently by some of these guys. This methodology helps gives some of the top handicapping businesses in the world a continued advantage over the marketplace, and it only involves money management...for successful bettors.

Further, it is widely regarded by advanced professionals as the only correct way to manage money in sports betting. That statement alone will sound controversial but that is merely a testament to the knowledge gap between professional bettors who run this as a business, and amateurs.

…Note: Flat betting is almost universally considered a "to win" wager amount. Just because you're stuck on semantics doesn't make the definition different for the vast majority of bettors.

Lol. It’s things like these that separate the men from the boys. And here you had me thinking amateur hour was inappropriate. It’ not an insult, it’s just back to that knowledge gap.

I always say, it’s not that bettors don’t know things; it’s that what they know is wrong. Your “flat betting” blue line is a poor progressive betting strategy. It’s not semantics, it is money management.

One of the reasons so many bettors lose is that they don’t understand the definitions of the concepts they are trying to apply.

In the end all the simulator gives us are some instances where the Kelly Strategy performs worse than a very poor, unprofessional betting strategy. I’m sorry you fell into the “universal” incorrect concept of flat betting before constructing that spreadsheet but it is what it is.

I am also sorry you had to be a part of many discussions pitting Kelly betting versus flat betting when the flat betting concept in those discussions was incorrect to begin with. That makes much, but probably not all of it a waste of time.

[HeeeHAWWWW]

Now, at -110 odds bet 16% of your bankroll and fire away. Good luck lasting 200 plays.

Well, that's pretty simple. After 200 plays the probability of being below 5% of your original bankroll is 1%, below 1/3rd 5%, below half 9%. More importantly, the probability of being in profit is 85%.

That's actually the perfect example of where you certainly should use Kelly: a perfectly known edge with no variance.

[MonkeyF0cker]

Like I said, KVB, if you still don't believe that Kelly is optimal, reason and math obviously won't change your mind. You are certainly welcome to put your money where your mouth is. I will gladly offer you an opportunity to make money off of ignorant little me betting full Kelly on your proposed game.

[MonkeyF0cker]

If you'd still like to continue to profess your "knowledge" rather than lose money to me, perhaps you could mathematically prove how betting the same amount on a +200 as a -200 could ever in a million years be an optimal staking strategy.

Thanks.

[JMon]

Let's say you know 55-57% is going to be met (years of gambling with models), and knowing a bad run exists. For the those that flat bet...is it wise not to readjust until a plateau is met, lets say 25%? At the same time not decrease your bet?

[KVB]

Well, that's pretty simple. After 200 plays the probability of being below 5% of your original bankroll is 1%, below 1/3rd 5%, below half 9%. More importantly, the probability of being in profit is 85%...

But you won’t get to 200 plays. You won’t last that long. A professional bettor must protect his investment from the inevitable losing streaks.

I already posted that this is reality, not theory. I suggested actually putting 6 white tickets and 4 black tickets in a bag and fire away with 16% of current bankroll at -110 odds.

But you didn’t do that. You worked things out on paper. I understand that you posters understand math but sports betting, particularly the money management aspects, is not just mathematics.

It is applied mathematics and you are applying the mathematics wrong. You guys are not taking professional, business approach to your betting. Several posts in this thread offer proof of this.

Changing your bet size will change you breakeven point, every time.

[KVB]

…That's actually the perfect example of where you certainly should use Kelly: a perfectly known edge with no variance.

This is a ridiculous notion.

This, along with the spreadsheet referenced earlier, gets at the very essence of what I am trying to say about the difference between amateurs and professionals. Some lessons you just have to learn.

Bettors just don’t understand that, even with a long term advantage, how bad it can go in the short term.

Even with a perfectly known edge, of course there will be variance. You simply will not get 6 out of every 10 white tickets, every time. Let’s make the math easier. Different markets may yield a slightly different plan, but let’s talk NFL…which I will focus on.

If you have an expectation of winning 57.5% of the time in the NFL, then on any given week, you have the basically the same probability of going 12-2 as you do of going 4-10.

Think about it. If you increase your bets after the 12-2 week and then go 4-10, or decrease after that 4-10 week and then hit 12-2, you will have a 16-12 record. That’s hitting over 57% of your bets and you will have lost money.

We are dealing with applied mathematics here. It’s real easy to create long term progressive betting schemes on paper. They always seem so good. The reason for this is that you guys can manage your percentages on paper.

But this is real life. And in real life, those percentages cannot be managed.

...a bettor’s next 20, 25, or even 30 bets are NOT likely to be settled (won or lost) at a rate in line with the long term winning expectation…not at all...

[KVB]

If you'd still like to continue to profess your "knowledge" rather than lose money to me, perhaps you could mathematically prove how betting the same amount on a +200 as a -200 could ever in a million years be an optimal staking strategy.

Thanks.

I’ve proven it on SBR many times, it’s proven in a post above, and you prove it with your “To Win” percentage betting strategy included in the spreadsheet created.

Another sign of an amateur bettor is an ego and willingness to bet with it. It’s already been proven, and this is not a game between two people. I gave you guys a simple exercise, and plenty of time to try it out.

I wouldn’t entertain your bet, it would be unfair, but if I did you should be warned.

If a professional bettor offers to bet you whether or not he can freeze a swimming pool with his breath, get ready to dive into a block of ice.

[KVB]

…"knowledge"…

Look pal, don’t put up that bullshit spreadsheet, ask the questions you ask, and come at me with the word “knowledge” in quotes. There is a huge knowledge gap between true professional bettors and amateurs. Maybe that insults your ego, I don’t know, but the reality is you may be good at math and Microsoft Excel…

But you don’t know shit about gambling, especially money management. You have proven it in this thread. You know, I don’t have to help you. And I don’t see any other true pros posting, like I do, on SBR, at all.

[KVB]

Let's say you know 55-57% is going to be met (years of gambling with models), and knowing a bad run exists. For the those that flat bet...is it wise not to readjust until a plateau is met, lets say 25%? At the same time not decrease your bet?

Now you are talking Jmon. Just remember, you raise your breakeven point EVERY TIME you change your bet size, no matter how often. There is an optimal strategy here.

[u21c3f6]

... If you have an expectation of winning 57.5% of the time in the NFL, then on any given week, you have the basically the same probability of going 12-2 as you do of going 4-10.

Think about it. If you increase your bets after the 12-2 week and then go 4-10, or decrease after that 4-10 week and then hit 12-2, you will have a 16-12 record. That’s hitting over 57% of your bets and you will have lost money. ...

KVB, I don't think you actually understand Kelly. Given the numbers above, if you use Kelly you will actually win money and the amount money won would be the same regardless of which streak came first.

I have no idea how you believe you would lose money in your scenario. I think you are applying Kelly incorrectly.

Joe.

[yak merchant]

It’s suicide. Say you have an edge of 60%. Calculate the Kelly stake and figure it out for yourself. Take a box with 6 winning white tickets and 4 losing black tickets. Fire away and track your bets. You’ll be broke in 30 minutes.

I beg you to in any way shape or form prove this mathematically. With a win prob of 60% you'll be a millionaire not broke.

I’d love to see a handicapper alive after 200 bets risking 16% of his current bankroll, especially after having to lay multiple bets at time, sometimes five or six. Read that again.

Pretty easy to model. With a win probability of 60% and using "Current bankroll" for every bet (or the Simultaneous Event Kelly Calculator) you still will not go broke and will be rolling in cash.

Successful sports bettors often use an adjusted Kelly stake but it is still likely costing them money. Even the most successful bettors out there get these principles wrong.

Well this is probably the only true statement here. If you don't actually know your edge Kelly will cause pain by over betting -EV events. However the principles of Kelly are still mathematically sound.

I have no problem with the system; it works well, as any betting system would, as long as long as the winning expectations are met.

Umm. This completely contradicts your above assertion that you would go broke in a game with a 60% win probability.

But this is sportsbetting and the percentages will vary from the expectation as the reality of standard deviation sets in.


If you want to deal in facts, know that mathematical fact is a bettor’s next 20, 25, or even 30 bets are NOT likely to be settled (won or lost) at a rate in line with the long term winning expectation…not at all.

Standard Deviation can set in all it wants as long as your long term advantage is solid and your adjust your bankroll after every bet. Like it has already been said if you have a long term advantage and follow full Kelly you CANNOT go broke.

While I agree with you 99.9% percent of people betting shouldn't use Kelly as they can't actually ascertain what their true advantage is (actually even if they have one), but whether you are a "Pro" or not I find it pretty amazing that you come in here calling everybody out as amateur's and calling them "pal" with their "bullshit spreadsheets" for trying to explain the math to you. You obviously aren't dealing with mathmatical facts and don't understand Kelly. Clearly by the fact you won't take the bet with your 6 white tickets example you know you are wrong at some level, but if you change your mind on the 6 white tickets bet I will empty my retirement account and fly to wherever you want.

[KVB]

I completely understand Kelly. What you guys aren’t doing is reading my posts.

But you won’t get to 200 plays. You won’t last that long. A professional bettor must protect his investment from the inevitable losing streaks...

Like I said, all these schemes work well on paper because you can manage the percentages. You are guaranteeing you will meet your expectation. Now apply the math in real life.

Quit answering my posts with a paper model as if you didn’t even read my posts. Try it in real life.

Keeping it at the NFL, because that is the management plan I will go into first, I can assure you that no long term professional gambler, with an expectation of 55 to 57.5% or 60% is betting 5.5 to 11% or 16% of the bankroll on every bet.

If you think so and act as such you will fail.

It must be treated as a business and the short term can really go sour in a sport like the NFL, even with a long term win expectation.

Again, you must be aware that…no long term professional gambler with a long term winning expectation of 55 to 57.5% or 60% is betting 5.5 to 11% or 16% of the bankroll on every bet.

There’s a reason for that.

Never mind the percentage betting. The bottom line is that every time you change your bet size, you change your breakeven point…

Look what happens with a long term win expectation of 55%...

http://www.sportsbookreview.com/foru...l#post25140487

[HeeeHAWWWW]

But you won’t get to 200 plays. You won’t last that long. A professional bettor must protect his investment from the inevitable losing streaks.

I already posted that this is reality, not theory. I suggested actually putting 6 white tickets and 4 black tickets in a bag and fire away with 16% of current bankroll at -110 odds.

But you didn’t do that. You worked things out on paper. I understand that you posters understand math but sports betting, particularly the money management aspects, is not just mathematics.

Huh? This isn't sportsbetting - you defined an experiment with a 60/40 split, ie the chances are known exactly. That allows for a precise assessment of bankroll outcome, which I gave you.

There's no great unknown here, basic probability theory defines the answer. I'm not sure what you're trying to argue, but if you don't understand how to work that out, then yes, Kelly isn't for you. That doesn't mean it's not workable for others.


By the way, I've done this for a living for a decade now, and used various Kelly-related staking methods for most of that. Last time I checked, flat stakes would have resulted in a third lower RoI over that time.

[u21c3f6]

I completely understand Kelly. What you guys aren’t doing is reading my posts.
...
Look what happens with a long term win expectation of 55%...

http://www.sportsbookreview.com/foru...l#post25140487

KVB, I am not sure what you are trying to say with the above link. This is not a Kelly example. The 21 wager scenario you set up in that thread is break even and has no edge. Therefore the correct Kelly % to wager is 0. Again, Kelly is not the problem, it is the estimation of your edge that can create problems.

You also I believe misunderstood heehaw's use of the term variance in his post. His point was that because the edge and odds were "facts" with no variance or chance for error, Kelly was the perfect choice of money management for that game. Kelly is perfect with perfect inputs. Even given that game scenario I would tend to use a fractional Kelly to smooth out the wide swings that full Kelly can produce as I am very protectful of my bankroll and probably more risk averse than the average gambler.

Joe.

[KVB]

Huh? This isn't sportsbetting - you defined an experiment with a 60/40 split, ie the chances are known exactly. That allows for a precise assessment of bankroll outcome, which I gave you…

...You also I believe misunderstood heehaw's use of the term variance in his post. His point was that because the edge and odds were "facts" with no variance or chance for error, Kelly was the perfect choice of money management for that game. Kelly is perfect with perfect inputs...

You’re still on paper, worried about the outcome after 200 plays. You still didn’t try it in reality, to get to 200 plays.

Look, when you roll 2 dice, we all know a seven is the most likely single number to come up. But what non gamblers tend to forget is that when you add the probabilities of every other number coming up together, a seven isn’t “likely” at all…some other number is.

...Bettors just don’t understand that, even with a long term advantage, how bad it can go in the short term.

Even with a perfectly known edge, of course there will be variance. You simply will not get 6 out of every 10 white tickets, every time...

...If you have an expectation of winning 57.5% of the time in the NFL, then on any given week, you have the basically the same probability of going 12-2 as you do of going 4-10...

I am not going to repeat this next sentence often but by the time the short term is over, most of you will find that a market like the NFL has caught up and your long term expectation has even changed. There are ramifications to this fact.

But you won’t get to 200 plays. You won’t last that long. A professional bettor must protect his investment from the inevitable losing streaks...

...you must be aware that…no long term professional gambler with a long term winning expectation of 55 to 57.5% or 60% is betting 5.5 to 11% or 16% of the bankroll on every bet.

There’s a reason for that...

If you want to treat betting like a business you must understand what genuine professionals do. I know you want to argue, I know, but you keep working out equations to argue and don’t deny the truth in bold above. This is because you are not applying the mathematics.

[KVB]

...By the way, I've done this for a living for a decade now, and used various Kelly-related staking methods for most of that...

I've already addressed the use of some adjusted forms of Kelly in this thread.

...Last time I checked, flat stakes would have resulted in a third lower RoI over that time.

Now you’re getting somewhere. I’m going to assume that when you say flat stakes, you DO NOT mean to say some progressive percentage betting scheme or even betting “to win.”

So ask yourself, last time you checked, did you adjust your bet size after a set amount of bankroll growth, positive or negative; and if so, at what levels of growth and by how much?

I’m telling you that for a market like the NFL there is an optimal strategy, developed independently by some of the top handicappers in the world. Posters and readers may bitch all they want but for a market like the NFL your bet size may not be a matter of opinion. There is likely only one optimal bet choice for your particular situation.

This requires defining a bankroll and betting that amount each game. Sometimes bettors that feel they can risk more and increase the bets. If they truly can afford the risk, and want to increase their risk, then they should stick with the optimal bet size while raising the defined bankroll, thus raising their bets. Instead, bettors often keep that bankroll and just increase their bets. This is unnecessarily risky.

[KVB]

KVB, I am not sure what you are trying to say with the above link. This is not a Kelly example. The 21 wager scenario you set up in that thread is break even and has no edge. Therefore the correct Kelly % to wager is 0...

That link is a simple exercise meant show the effects that changing your bet size have on the breakeven point. It was written with set percentage of current bankroll betting in mind.


That said, with a 55% long term winning expectation per bet, Kelly recommends betting 5.5% of one’s bankroll.

It is not at all, especially in the NFL but in any sport really, unreasonable to see a stretch of 11-10 over a 21 bet games, even with a long term winning expectation of 55%.

Again, you are managing your percentages on paper but not recognizing the devastating effects of the short term. By the time many bettors do realize it, real time market adjustments have already caused their long term expectation to change.

Changing your bet size is costly and should be done as little as possible.