Explaining Kelly Criterion

**Justin7** · 01-08-09, 03:02 PM

Originally posted by sprasad03

Hey fellas, Im trying to get acquainted with all this mathematical analysis with sport betting. I understand the calculations for Kelly, from Justins video, however I dont know how to apply it.

If i put any game like (-110, -115,) as i convert them into probability to put in the formula i get a negative edge which Justin says not bet. But every game will have this, so I dont understand how i make it positive. Do i make own odds of winning higher at my discretion?

You can change the odds, if you have a good reason. Most lines are accurate though - meaning both sides will lose money.

**sprasad03** · 01-08-09, 03:35 PM

ok, so i should use the regular line but should i just make the negative edge positive and use that as a percent of my bankroll since it usually going to be negative.

**TLD** · 01-09-09, 04:17 AM

You may be misinterpreting Kelly.

Kelly is not a way to give yourself an edge.

Kelly is a way to figure out the optimal amount to bet when you have an edge. Finding an edge and estimating the size of that edge are things you would have to do through other means. Then you plug that information into the Kelly formula; you don’t get it from the Kelly formula.

**sprasad03** · 01-11-09, 02:58 PM

I guess im confused, because i tried to do it for my bankroll and it was .26 of my bankroll for the one game. but i was betting on multiple games. I guess im not using this right

**reno cool** · 01-12-09, 01:08 AM

don't worry about Kelly, worry about finding an edge.

**sprasad03** · 01-12-09, 06:15 PM

i think i need to do a lil more research than i thought, but i mean i want to use kelly so i can figure out the optimal amount to bet instead of guessing. im gonna try to find a way to determiine the edge. all i did was use the probability from the line or my total win probability and plugged the amount paid out, result never worked for me.