Questions about unit size and tracking units won

[duanedibley]

Hi,

I am trying to understand betting 'units' and the proper convention for tracking units won.

1. Let's say I want to use a half-Kelly strategy. How do I decide what my betting 'unit' is? I will have a different edge on each bet, so I will not always be betting the same amount.

I will know how much money to bet each time by computing the Kelly bet given the odds and my edge, but my question is how many 'units' am I betting? I'd like to compare my 'units won' to other people's 'units won'.

2. Say my starting bankroll is $100, and I have decided that my betting unit is 2% of my bankroll, or $2. Now say that I make 50 1-unit bets today and win all of them. My bankroll is now $200. I now increase my unit size to $4, and tomorrow I make 50 $4 bets and win all of them. How many units have I won? a) 150, b) 100, or c) 75?

[roasthawg]

Don't worry about a "unit"...that's just a term, it's meaningless in kelly. Worry instead about correctly estimating your edge...that's everything.

For your second question you'd be up 100 units. Once again though it's just a term used so gamblers can compare relative success despite drastic differences in bankrolls. If you had said your unit size was $2 regardless and you increased the amount of units bet rather than unit size you'd be up 150 units. Or if you had decided that your unit size was 1% of your bankroll but you were betting 2% then you'd be up 200 units.

[Sinister Cat]

I'd say the purpose of using the term "unit" is to present your win/loss independent of your bankroll size. So the answer to 2. should be b).

In terms of deciding what it is, maybe just arbitrarily pick some scale where unit size corresponds to percentage of bankroll (1% = 1 unit, or whatever). Bottom line is it is tough to compare because you don't know what everyone else is doing, anyway.

[duanedibley]

OK, great. Thanks for the answers. Both very helpful.

[smokin1]

I track a few things about my wins and losses. So following grading them, one of the stats I add to my data is the bankroll I had when I placed the bets. This allows me to adjust my unit size in the future in case my current method needs to change. (Currently 1%=1 unit for me) Unit tracking if for your own tracking purposes, you will and should use the method that gives gives you the info you need so just a matter that you figure out what you are trying to accomplish by tracking units.