Kelly Criterion

superman613 · 08-28-10, 08:16 AM

as long as you hit the 60% it should come out ok...the only thing i would be afraid of is what happens on a losing streak...we all get them...like on that sunday where you have those 5 plays what if you go 1-4 which is very possible that would hurt!!

Duby · 08-28-10, 08:22 AM

yes but I assume you re-adjust your unit size on a daily basis....but a 0-5 day would kill you. Im assuming its less risky if you play 1-2 games per day

Duby · 08-28-10, 08:42 AM

My 80% assumption on 5 bets is not correct. I found this:

Kelly-criterion applies when the bets are made sequentially, only one at a time. If an investor made 10 sequential bets of 10% of their current wealth on each bet, and lost all of them, they wouldn't go broke, but would be left with 0.9^10 of their initial wealth which is 34.9%.)

The statement above means...if i understand correctly:

Example Kelly criterion adds up to 10% risk per bet: Lets say you have ten bets that day. On would think 10$ each right? Wrong. It would look like this:

bet 1: 10.00
bet 2: 9.00
bet 3: 8.10
bet 4: 7.29
bet 5: 6.56
bet 6: 5.90
bet 7: 5.31
bet 8: 4.78
bet 9: 4.30
bet 10: 3.88

So if you go 0-10 you would still have approx 35% left over in your bankroll

Toples · 08-28-10, 09:01 AM

you can set daily percentage, i.e. you always bet 16% daily (16% daily on one bet or 4% on 4 bets etc), and then adjust stake after that day.

Duby · 08-28-10, 09:26 AM

Originally posted by Toples

you can set daily percentage, i.e. you always bet 16% daily (16% daily on one bet or 4% on 4 bets etc), and then adjust stake after that day.

Thats a good idea...so basically the more games you bet the less you risk on them.

SportsPicks3434 · 08-28-10, 09:50 AM

Originally posted by Duby

I have been reading up on the Kelly Criterion and just looking for your thoughts.

Lets see if I got this right:

If I plan on hitting 60% in NFL and CFB this year:

60-40/0.91 = 16%

Which means I would risk 16% of my roll on each game??!!

For example I will take a roll of 1000$....I would risk 160$ per game!

Doesnt this seem high to you guys? If you bet 5 games on NFL Sunday you would risk 80% of your bankroll!!??!! Not that I plan on betting that many games but im sure some people do.

As anyone used this method in the past?

Thoughts please

Kelly does not recommend that you play 16% of your bankroll. Thats incorrect. Do you have the Kelly calculator? Here it is if not. Ask me if you do not know how to use the calculator.

The Kelly Criterion Calculator

http://www.albionresearch.com/kelly/

The Kelly Criterion determines how much of a stake you should risk on a favorable investment (or bet)…

superman613 · 08-28-10, 10:06 AM

Originally posted by SportsPicks3434

Kelly does not recommend that you play 16% of your bankroll. Thats incorrect. Do you have the Kelly calculator? Here it is if not. Ask me if you do not know how to use the calculator.

http://www.albionresearch.com/kelly/

that 16% is using the 60% winning pct as an example

superman613 · 08-28-10, 10:12 AM

Originally posted by SportsPicks3434

Kelly does not recommend that you play 16% of your bankroll. Thats incorrect. Do you have the Kelly calculator? Here it is if not. Ask me if you do not know how to use the calculator.

http://www.albionresearch.com/kelly/

that calculator is good shit for someone who is interested in this

vyomguy · 08-28-10, 10:29 AM

I like flat betting better. Once your bankroll doubles, adjust your unit size. Plain and simple. Never bet more 5% of your bankroll on any bet.

Duby · 08-28-10, 11:10 AM

That calculator is awesome SP...Thanks

Ironman07 · 08-28-10, 11:53 AM

kelly

thnks Sportspicks... great link for reference,,,