Maximum Bankroll Growth
October 23rd, 2012 at 5:12:22 PM
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Let's say that someone wants to start out betting $100 a day and has a $10,000 bankroll for betting and does not need to take profits out. This person wants to make one bet each day at -110 to win 100 and has a 55% win rate. What would be the optimal rate of bet increase? I am not talking full Kelly Criterion as way too much variance.
Thanks in advance for the answers!!!
Thanks in advance for the answers!!!
October 23rd, 2012 at 5:34:48 PM
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...the optimal rate would be the Kelly Criterion, 5.5%. You're not going to get an "optimal" rate that isn't that. Sorry. Numbers don't change to accommodate cold feet.
If you're afraid of variance, you might as well just stick to 1%, or maybe get your feet wet by betting that $100 plus everything you've won in excess of your initial bankroll until you hit 5.5%.
If you're afraid of variance, you might as well just stick to 1%, or maybe get your feet wet by betting that $100 plus everything you've won in excess of your initial bankroll until you hit 5.5%.
The trick to poker is learning not to beat yourself up for your mistakes too much, and certainly not too little, but just the right amount.
October 23rd, 2012 at 5:48:58 PM
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24Bingo,
That was correct. Thanks
•The odds are in your favor, but read the following carefully:
•According to the Kelly criterion your optimal bet is about 5.5% of your capital, or $550.00.
•On 55% of similar occasions, you would expect to gain $500.00 in addition to your stake of $550.00 being returned.
•But on those occasions when you lose, you will lose your stake of $550.00.
•Your fortune will grow, on average, by about 0.14% on each bet.
•Bets have been rounded down to the nearest multiple of $1.00.
•If you do not bet exactly $550.00, you should bet less than $550.00.
•The outcome of this bet is assumed to have no relationship to any other bet you make.
•The Kelly criterion is maximally aggressive — it seeks to increase capital at the maximum rate possible. Professional gamblers typically take a less aggressive approach, and generally won't bet more than about 2.5% of their bankroll on any wager. In this case that would be $250.00.
•A common strategy (see discussion below) is to wager half the Kelly amount, which in this case would be $275.00.
•If your estimated probability of 55% is too high, you will bet too much and lose over time. Make sure you are using a conservative (low) estimate.
That was correct. Thanks
•The odds are in your favor, but read the following carefully:
•According to the Kelly criterion your optimal bet is about 5.5% of your capital, or $550.00.
•On 55% of similar occasions, you would expect to gain $500.00 in addition to your stake of $550.00 being returned.
•But on those occasions when you lose, you will lose your stake of $550.00.
•Your fortune will grow, on average, by about 0.14% on each bet.
•Bets have been rounded down to the nearest multiple of $1.00.
•If you do not bet exactly $550.00, you should bet less than $550.00.
•The outcome of this bet is assumed to have no relationship to any other bet you make.
•The Kelly criterion is maximally aggressive — it seeks to increase capital at the maximum rate possible. Professional gamblers typically take a less aggressive approach, and generally won't bet more than about 2.5% of their bankroll on any wager. In this case that would be $250.00.
•A common strategy (see discussion below) is to wager half the Kelly amount, which in this case would be $275.00.
•If your estimated probability of 55% is too high, you will bet too much and lose over time. Make sure you are using a conservative (low) estimate.
