By increasing your wager and not simply betting the same amount every time, you have a dynamic betting strategy. So if you knew Football Golf Betting Odds Predictor Completely Automated Method With Real Solutions that you were going to win exactly 50% of your bets, your optimal bet amount exactly half of your bankroll each time. Hopefully, this helps you grasp how and why to implement different betting stake strategies a little bit better.

In fact, as the bet size approaches the top, the ratio of marginal risk to marginal profit goes to infinity. Eventually, you would have to risk an additional one billion dollars to earn one more cent of expected profit. The reason is that the Kelly criterion assumes no value is placed on risk as long as it maximizes the return. With a 1% betting strategy, the simulation shows that you could have made a return of 47.7% of your original bankroll with mild volatility. You could also have made a higher return, albeit more volatile, with larger bet sizes.


Article brought to you by the upcoming MintDice Bitcoin sports betting book. The Kelly Criterion is a useful tool for assessing the qualitative shape of risk versus reward and understanding boundaries of what is rational. Although it is limited by the exclusion of risk pricing, Kelly can be an excellent tool in the wider arsenal of a quantitative trader. Additionally it provides efficient estimations of drawdowns, variance and geometric growth rate. For money managers, slow and steady is the name of the game. 0.10x-0.15x of the Kelly-optimal investment size is a good rule.

A Brief Introduction To The Kelly Criterion, Formula And How To Apply It For Trading, Investing And Everyday Life

Statistics have shown that when a total is higher (8.5 or more) and the game is likely to have a lot of scoring, it favors the underdog in terms of value and the likelihood of an upset. However, this is generally for underdogs of +150 or less who stand a fighting chance of pulling off the minor upset. This works especially well with point totals and teams that put up big numbers at home. The common bettor will remember how a team performs at home, how quick their pace of play is, how many points they give up to the opposition, and then simply bet the same way the next time that team plays at home.

He was an employee at AT&T’s Bell Laboratory since 1950 and he came up with the formula and published it in 1956. The formula became an instant hit in the betting community, where punters familiar with mathematical equations utilize it to help them gain maximum profit in a short period of time. The optimal starting bets of these strategies show some interesting behaviour.

The Benefits Of Using Kelly Staking

Ex­e­cut­ing real trades is nec­es­sary to get worth­while data and ex­pe­rience. A small bankroll with this goal must be pre­served and var­i­ance min­i­mized. A bankroll pro­vides op­por­tu­nity to get data and ex­pe­rience.

That said, we recommend that you have a firm grasp of the notion of betting value before we begin. PSG’s match against Caen ended in a draw and nearly a third of a Kelly bankroll would have been wiped out in a single bet. Understandably, this is not the sort of drawdown that most bettors can tolerate, even if there are other opportunities informative post available to grow the bank by a similar magnitude. If we remind ourselves how a Kelly stake size is calculated (edge – 1 / odds – 1), sudden and large drawdowns will arise where a short price bet, which we believe holds significant positive expectation, loses. The easiest is to say you’ll be using the Kelly Criterion for one year or the length of a sports season.

Kelly Bet

The next pair of graphs show how the leverage and long-run return changes for a different set of outcomes. Outcomes B and C are positive and increasing the probabilities of either motivates a more levered strategy and higher returns. The optimal strategy is not to bet only when the negative outcome, A, has a high probability. If one knows the odds and payouts of a given bet with precision, the Kelly Criterion bet size will maximize one’s capital over the long run.