Niblick
Niblick
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Joined: Dec 12, 2009
February 16th, 2010 at 3:14:17 PM permalink
I have read the why's/wherefor's of the Kelly Criterion and the formulas involved (which I understand). What I don't understand is any method by which I can practically use it while sitting at a blackjack table.

In short, I understand the theory...but putting it into practice is another story.

Is there anyway any of you could present a simplified, user friendly concept/formula?

Thank you.
Nemo Omnibus Horis Sapit
teddys
teddys
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Joined: Nov 14, 2009
February 16th, 2010 at 5:50:26 PM permalink
Kelly Criterion is a way of maximizing your return with the lowest amount of risk when you have the advantage in a game situation.

It's only applicable when you have the advantage. Otherwise the Kelly number will be negative (i.e., be the house!)

If you count cards in blackjack it is very useful. However, I don't know the exact formula.

Edit: Sorry I didn't add much here. I know for blackjack it is pretty easy to figure out by dividing your bet by the advantage (since the variance is approximately one) to get the Kelly Bankroll needed. I used this rough rule-of-thumb when was I was playing with a 2-1 blackjack coupon and wanted to know a good bet size I should use. I am not a serious card-counter.
"Dice, verily, are armed with goads and driving-hooks, deceiving and tormenting, causing grievous woe." -Rig Veda 10.34.4
dwheatley
dwheatley
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February 16th, 2010 at 7:16:10 PM permalink
Sure. Know your bankroll ahead of time, and calculate the Kelly bets for each count in terms of your bankroll ahead of time. You can round to the nearest $5, and go in to the casino with this info.

I remember when I was just starting and decided I had a bankroll of around $3000 that my bets for 0 to 2 was $5, for 3 was $15, for 4 was $25, and for 5 around $40. Maybe my memory doesn't serve me well, but that should give you a good example of what you can do. I lifted a table from one of Stanford Wong's books, but you could just apply the formula directly to your blackjack game and various advantages according to each count.
Wisdom is the quality that keeps you out of situations where you would otherwise need it
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