Kelly betting strategy

Kelly betting

The so called Kelly criterion was worked out more than half a century ago and it does not lose its popularity now. For all who starts to investigate deeply the sport betting strategies and betting it is necessary to get acquainted with the general tendencies of this method.

It is common practice to compare Kelly betting with famous Martingale Betting System, which in definite conditions could lead the bettor to bankruptcy. But Kelly betting absolutely makes impossible this possibility. The point is that with the help of Kelly criterion the size of bets in percentage of your money is determined. This method is good also, because even if you are losing ten times at a run, you still can have good money. The reverse side of the Kelly betting criterion is that due to this method you would not gain great money as the size of the bet is rather small.

The main demand to the bettor in Kelly betting is a highly developed skill in identifying the chances to win in this or that event. This quality could be improved only on your own expertise. That is why for testing Kelly betting strategy you should better choose the kind of sport that you know best of all.

One more advice – detecting an aim and when you achieve it – take the profit. In this case you will see the real amount of gained profit in percentage from primary bank and the taken time in achieving this aim. If these values are acceptable for you, you can surely use this method further.

The formula for evaluating the bank charge is as follow:

(Odds) * (probability of the outcome, according to your opinion) – 1 / (proposed odds – 1). Mathematically it is as follow: (а х b — 1)/(а — 1) = optimal bank charge for a bet.

For example, odds – 2.50, probability is 0.45.

Verification of profitability of the bet 2,50*0,45=1,125 > 1, i.e. the bet is profitable and with the time will bring you 12.5% profit.

So, the bank charge is (2,50*0,45 — 1)/(2,50-1)=0,083

All we have to learn is the size of bet in money terms. Multiply your bank on odds. For example, you have $ 1000, then 1000*0.083=83.

The wear point of this financial strategy is the fact that you really need to know all the outcomes and regularly be better than professional. For experts that is their job. It is not so easy – a lot of people, who use Kelly criterion apply decreasing factor 0.3-0.7, that provides stability in case of the series of failures.

It won’t be a mistake if you test this financial strategy and your own abilities in evaluation the events first on the paper and then by betting real cash.

If you want to learn more about this strategy it is possible to download the file on 27 pages- “ Kelly criterion in black jack, sport totalizators and stock exchange".

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