What is your risk of ruin?
- Thread starter Ironlock
- Start date
very slim without looking at more math than a poisson distribution chart.
Ironlock- Show me the math after you get some replies on this. I like to play with numbers.
kelp0027
EOG Dedicated
58-42 = 16% edge...at larger % kelly criterion is not exactly true; but a rough estimate of appropriate bet sizing...or 16%...but no one would actually, regularly bet 16% of br per bet...
at 500/bet outta 5,000 br; ; you are betting 10% of br and have a 16 % edge; i would roughly estimate 0.5 to 1.2 % chance of ruin; betting 500/bet even when not decreasing bet size if br decreases to say 2.5 k and you are then not decreasing bet size appropriately; which should be done in that situation...
if you actually are just betting 500 outta 5,000 br and never changing bet size; essentially, you would have to be unlucky early in the series; since any increase of br to say 10k; while still betting 500/bet would mean you are betting 5% of br at 16% edge; and would have a very low gamblers ruin from that point on; but i really do not know how to do the exact math, and may be off...
my main comment is: if you really can consistently; truly make a real volume of wagers at 16% edge; you would have the "key to the mint" and would become extremely wealthy, within several years; as when your br grows to 30-40k and you very safely bet dimes; you would average 160 profit/bet of each 1,000 wagered; and would probably start to find it more difficult to get action...
all that being said: i would not recommend ever betting more than 4% of br on any single wager...if you truly are that skilled; you want to be real sure you do not go broke and lose the ability to make such a tremendous income...jmho
gl
:+signs8-1
at 500/bet outta 5,000 br; ; you are betting 10% of br and have a 16 % edge; i would roughly estimate 0.5 to 1.2 % chance of ruin; betting 500/bet even when not decreasing bet size if br decreases to say 2.5 k and you are then not decreasing bet size appropriately; which should be done in that situation...
if you actually are just betting 500 outta 5,000 br and never changing bet size; essentially, you would have to be unlucky early in the series; since any increase of br to say 10k; while still betting 500/bet would mean you are betting 5% of br at 16% edge; and would have a very low gamblers ruin from that point on; but i really do not know how to do the exact math, and may be off...
my main comment is: if you really can consistently; truly make a real volume of wagers at 16% edge; you would have the "key to the mint" and would become extremely wealthy, within several years; as when your br grows to 30-40k and you very safely bet dimes; you would average 160 profit/bet of each 1,000 wagered; and would probably start to find it more difficult to get action...
all that being said: i would not recommend ever betting more than 4% of br on any single wager...if you truly are that skilled; you want to be real sure you do not go broke and lose the ability to make such a tremendous income...jmho
gl
:+signs8-1
The General
Another Day, Another Dollar
Ironlock said:
Expecting and accomplishing are 2 different animals and most of the straight bettors I know personaly, including myself would have about a 80% plus chance of going broke.
Bucky
EOG Dedicated
If you are betting kelly to a fixed bank (no resizing) your ROR=13.5%
<TABLE border=1><TBODY><TR><TD class=V>Gambling Bankroll:</TD><TD class=F>$<INPUT size=8 value=5000 name=capital> </TD></TR><TR><TD class=V>Odds offered:</TD><TD class=F><INPUT size=4 value=10 name=oddsWin> to <INPUT size=4 value=11 name=oddsLose> e.g. 7 to 4, 2 to 1, etc.
Odds of 2 to 1 on should be entered as 1 to 2,
Odds of 11 to 10 on should be entered as 10 to 11 </TD></TR><TR><TD class=V>Your estimate of your
Probability of Winning:</TD><TD class=F><INPUT size=2 value=58 name=percentWin>% Use a conservative (low) estimate. </TD></TR><TR><TD class=V>Bets must be multiples of: </TD><TD class=F>$<INPUT size=8 value=1.00 name=betMultiple> </TD></TR><TR><TD class=V>The minimum bet allowed is: </TD><TD class=F>$<INPUT size=8 value=10.00 name=betMinimum> </TD></TR></TBODY></TABLE>
<INPUT type=submit value="Calculate Bet">
Results
<TABLE border=1><TBODY><TR><TD class=V>Gambling Bankroll:</TD><TD class=F>$<INPUT size=8 value=5000 name=capital> </TD></TR><TR><TD class=V>Odds offered:</TD><TD class=F><INPUT size=4 value=10 name=oddsWin> to <INPUT size=4 value=11 name=oddsLose> e.g. 7 to 4, 2 to 1, etc.
Odds of 2 to 1 on should be entered as 1 to 2,
Odds of 11 to 10 on should be entered as 10 to 11 </TD></TR><TR><TD class=V>Your estimate of your
Probability of Winning:</TD><TD class=F><INPUT size=2 value=58 name=percentWin>% Use a conservative (low) estimate. </TD></TR><TR><TD class=V>Bets must be multiples of: </TD><TD class=F>$<INPUT size=8 value=1.00 name=betMultiple> </TD></TR><TR><TD class=V>The minimum bet allowed is: </TD><TD class=F>$<INPUT size=8 value=10.00 name=betMinimum> </TD></TR></TBODY></TABLE>
<INPUT type=submit value="Calculate Bet">
Results
- The odds are in your favor, but read the following carefully:
- According to the Kelly criterion your optimal bet is about 11.8% of your capital, or $589.00.
- On 58% of similar occasions, you would expect to gain $535.45 in addition to your stake of $589.00 being returned.
- But on those occasions when you lose, you will lose your stake of $589.00.
- Your fortune will grow, on average, by about 0.6375% on each bet.
- Bets have been rounded down to the nearest multiple of $1.00.
- If you do not bet exactly $589.00, you should bet less than $589.00.
- 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 $125.00.
- If your estimated probability of 58% is too high, you will bet too much and lose over time. Make sure you are using a conservative (low) estimate.
- Please read the disclaimer.
Bucky
EOG Dedicated
http://www.albionresearch.com/kelly/
Let's discuss it later if you have time. Specifically, resizing of bets after bankroll fluctuations. One Saturday of college hoops at 5-15 and a guy could be toast.
Let's discuss it later if you have time. Specifically, resizing of bets after bankroll fluctuations. One Saturday of college hoops at 5-15 and a guy could be toast.
Bucky
EOG Dedicated
Got an idea I would like a little feedback on. The Kelly Criterion is based on knowing what % of the time an event will occur. Sports betting is not a deck of 100 cards with 58 being black and 42 red and we reshuffle after every card drawn.
What if a sports gambler had picked 58% of the last 100 games in the NBA correctly. Starts a 5k bank and on the next pick bets 589 like the calculator recommends. End of event records result and resizes for the next bet based on current pick% and bankroll.
Only plays a bet he feels has a 58% win rate or better. If the win rate drops to 55% and 4 k the calculator will resize for him. If the player falls below 53% he cannot bet real money and has to record the pick as a paper bet toward his pick % and he can resume when back over 53%.
I know there are problems getting value if he gets a bigger bankroll. Thanks in advance for the comments.
:smoke :smoke :smoke :smoke
What if a sports gambler had picked 58% of the last 100 games in the NBA correctly. Starts a 5k bank and on the next pick bets 589 like the calculator recommends. End of event records result and resizes for the next bet based on current pick% and bankroll.
Only plays a bet he feels has a 58% win rate or better. If the win rate drops to 55% and 4 k the calculator will resize for him. If the player falls below 53% he cannot bet real money and has to record the pick as a paper bet toward his pick % and he can resume when back over 53%.
I know there are problems getting value if he gets a bigger bankroll. Thanks in advance for the comments.
:smoke :smoke :smoke :smoke