Kelly criterion is the optimal strategy to maximize capital growth.
It's premise is that with a greater edge, a gambler/investor's stake should increase. Now the problem with betting the full Kelly stake is we have to know our exact edge to be sure we're betting the correct amount. Since few (if any) do, the answer is to bet fractional Kelly.
My personal preference is 1/4 to 1/2 Kelly dependent on the league i'm betting on.
An example:
Lets say we think team x will beat team y 2-0 3% of the time and this score is available to lay @ 19 on Betfair.
Laying at 19 is the inverse equivalent of backing at 1 + (0.95 * (1/19)) or 1.05. This is assuming %5 commission.
We plug the %97 win expected winrate and our 1.05 price into the kelly calculator and it tells us we should risk %37 of our bankroll. Now betting half kelly with a £5k roll equates to £925 risked. But for simplicities sake we can round down or up to the nearest unit size.
Had we been laying @ 25 our stake would have been smaller or laying at 15 it would have been greater.
There is an excellent Kelly calculator here: http://www.sbrforum.com/Betting+Tools/Kelly+Calculator.aspx
This one works for multiple simultaneous events.
Don't forget the one thing every correct score layer needs! a Betfair account.
(sign-up from the link below and receive £25 free)
0 comments:
Post a Comment