The Kelly Criterion has applications in gambling and stocks. This video explains the concept and how to use it in a variety of situations. There are 4 examples, including coin flipping, stock investing, football betting, and lotteries.
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good video you would be a great teacherComment -
If you couldn't watch this video you should quit gambling. Give us more of these Justin7. You're an asset to the SBR team.Comment -
Excellent information Justin,
Thanks.Comment -
Good vid. It really is an easy concept to grasp, especially with ganch's calculator. Learning kelly should be a requirement for any gambler.Comment -
Good video. Of course, winning expectation (p) is the critical factor. People may use the wrong method(s) to determine this expectation, and applying the right formula to the wrong number can be disastrous. Can you discuss winning expectation in relation to sample size and Z-score?
Personally, I'm strongly inclined to top off winning expectation at 60%, even though a betting system may be producing better results. Streaks and short term variations have to be neutralized before committing to a Kelly-based bet size. At what point, based on sample size and Z-score, would it be safe to let go off such a safety net?
(I don't feel that fractional Kelly is a reliable insurance. The risk has to be determined at the 'p' level).
Even if we draw a line at 60% for a system, that still leaves a max bet size of 17.98% of one's bankroll (at -105 odds). That takes a lot of guts, and possibly introduces another challenge. The sequence of wins and losses may not matter mathematically, but it most likely does matter at an emotional level. And, unless one is strong, judgment will be affected by the emotional disturbance. So throw in a Zen class as well.
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I actually thought about doing a vid on this topic, "estimating your winning edge".Comment -
Perfect.Comment -
Fantastic! Very well done, sir.Comment -
This guy is the biggest "Degenerate" on the active forum, he's gotta be in the hole like over 100 K .............Comment -
"gamblling is not a fuking science"Comment -
I think I'm stupid.
I still don't understand.
Does this work at all?
Still have to pick winners, no?Comment -
Could the Kelly Criterion stop JJ from going broke all the time?Comment -
how is this vid going to help anyone make money gambling?
it has ZERO to do with gambling.. it doesn't mean anything on how to manage your money.. that is less than 1% of it.. i dont care how good you are at managing your money, if you dont know how to get good lines, shop around and you are laying -110, it doesn't matter if you are the one and only Mr Kelly Criterion himself,. it will get you nowhere.
this is like telling someone how to make a million dollars by selling real estate.. but if he doesn't know the tricks to the trade, he'll never be able to do it.
if you want to be a successful gambler, forget kelly formula, you better have all this going for you.
1-good reduced juice books
2- bet only off lines
3- dont chase
4- money management
if you do kelly criterion, but dont apply these 4 rules, YOU WILL GO BROKE so freakin fast.. it's not funny.
if you use kelly system and bet only -110 games, this system will make you lose all your money.Comment -
nicky you're an idiot, no wonder why you are broke and no longer gambling.Comment -
Best video ever made on this site. Unfortunately that's not saying much, given the rash of crap vids by our resident poster.
Seriously, Justin did a great job explaining an important subject. If you don't understand Kelly after this, well...you never will.Comment -
hedgy,
if you are laying -105 on any game and you dont have a line advantage, you have no chance of making money. i dont care if you use the kelly criterion, or the billy criterion, or the willy criterion.. or whoever. you have to have a positive expectation in the bet you are putting in.
if you took this kelly system and went to the casino and played roulette, you think anyone has a chance. no, on each spin, you have a negative expectation return.. if kelly worked at -105, then you would clean up at roulette because it's almost like -105 for each spin, (with 1 green 0) as long as it's a positive expectation bet, you can clean up with kelly.Comment -
Nicky,
The assumption is that you have an edge to begin with. What edge do you have playing roulette (negative), so your bet is zero in that case.
No edge, no bet. Kelly is only applicable when you have a definite advantage.Comment -
very nice video, justinComment -
Nicky,
I agree with most of what you said. But please, it was only a 6 minute video. I can't cover every angle in that short period of time. There will be more... But this is just one of many pieces of the puzzle.Comment -
Nicky I respect you as a poster, but I am really starting to see this stuff they are talking about in here. You should take the time to look it over and try it. All of the things you listed above are true, but they alone will not get you to the end of the rainbow. Without a calculated positive edge for all wagers the things you listed above will only have you losing the same amount of money as a square bettor but in a longer period of time.
I have seen it many times( and I am sure you have too). Whats the difference of winning 10 dimes from a square in 17 weeks, or getting the same 10 dimes from a "sharp" player over a 2 year period. It's still the same 10 dimes and both players never had a CALCULATED POSITIVE EDGE to begin with. The things you listed above just keep you in the game longer.
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Sorry Justin, by the way.....nice video
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The video is good, but it's all ancillary.
People on this forum talk about Kelly like it's the Bible.
Nicky and 5 teamer are right on the mark.Comment -
Nicky,
You wouldn't play roulette as you have a negative edge which makes your Kelly stake 0.if you took this kelly system and went to the casino and played roulette, you think anyone has a chance.
CHF,
It's very, very important if you like money and are an advantage gambler.The video is good, but it's all ancillary.Comment -
Great video!Comment -
Don, I can honestly say that I used to look at your posts and say a lot of things that others are saying. "Man this guy is really quick to judge and offers no answers". However, I get the feeling that you have seen the same posts from uninformed posters over and over,and even after a short time seeing what you guys are talking about, I can see how you would be frustrated with giving the same answers to the same unproven bad habits and hear-say day in and day out. I think a manual type thread with all common questions answered, that was started recently by Ganch is a great solution. This will free up most of the posters with some insight day to day, for the rest of the Forum, without taking time to answer the same stuff over and over.
I experienced this with an online game I played. 90% of the questions asked were answered in the guide for the game, but every Noob was too lazy to read the guide.
Someone asks a question? Your answer? "See thread Blah, Blah in the think tank."
If they have questions after that? They will post in the Think Tank and all of you can handle the replies instead of the same guys wasting time over and over. Once they read the thread, then you can make them bump the thread as a signature before anyone answers their questions. If they take the time to read and ask questions? Then they are probably worth a little time.
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I've been through all this in harrowing detail before, and I promise you I'm not going to go through it again.
But inherent in all of this is the ability to pinpoint in any given situation what your chances of winning are. Well, duh....isn't that what we're all trying to do? And it is impossible. Sure, you can ballpark it based on a number of factors, but it seems to me that in any sports gambling situation the variables are too numerous to be as precise as this system requires.Comment -
1. You have no clue what you're talking about if you think it's impossible to determine fair value on games/props/etc.And it is impossible. Sure, you can ballpark it based on a number of factors, but it seems to me that in any sports gambling situation the variables are too numerous to be as precise as this system requires.
2. If you think you are ballparking it, then use a margin of error.Comment -
Definitely. Good post.Don, I can honestly say that I used to look at your posts and say a lot of things that others are saying. "Man this guy is really quick to judge and offers no answers". However, I get the feeling that you have seen the same posts from uninformed posters over and over,and even after a short time seeing what you guys are talking about, I can see how you would be frustrated with giving the same answers to the same unproven bad habits and hear-say day in and day out. I think a manual type thread with all common questions answered, that was started recently by Ganch is a great solution. This will free up most of the posters with some insight day to day, for the rest of the Forum, without taking time to answer the same stuff over and over.
I experienced this with an online game I played. 90% of the questions asked were answered in the guide for the game, but every Noob was too lazy to read the guide.
Someone asks a question? Your answer? "See thread Blah, Blah in the think tank."
If they have questions after that? They will post in the Think Tank and all of you can handle the replies instead of the same guys wasting time over and over. Once they read the thread, then you can make them bump the thread as a signature before anyone answers their questions. If they take the time to read and ask questions? Then they are probably worth a little time.Comment -
Coldhard...
You look at 20 years of data, and determine that "X" will occur 6% of the time. You can bet the "No X" at -800. The market is very liquid - you are limited only by bankroll considerations. You will have this opportunity perhaps 30 times a year. How much do you risk?
This is not a hypothetical. This opportunity still exists. Other opportunities exist. One of my main roles in my group is risk management. If you don't have risk management problems on a weekly basis, you aren't looking hard enough for opportunities.Comment
