Kelly's betting System

Kelly's System is one of the more complicated betting systems bookmakers . It is based on a mathematical formula by American scientist John Kelly. This formula it allows you to calculate the optimal bet rate at which you can get the maximum possible profit, while minimizing the risk of losing all the capital . It is also important to have a positive expected value. bet betting, which means that Kelly's betting system works for valuebets .

How Does Kelly's system work?

Kelly's betting System is first and foremost a formula that can make it easy to calculate the right bet rate – as long as we base the right sizes. It looks like this: rate = [K * (p * k – 1)] / (k-1) . Here we have 2 variables that are easy to determine: "K" – this is the amount of our current capital per game," k " - this is the odds for a given bet. In contrast, the variable " p " is the key to using the system successfully. It is the probability of winning and determining the size of this variable is by far the most difficult .

But that's not all. The use of the Kelly system makes sense only for specific bets. The condition is that "p * k" was more than 1 , which means that the bet must be a valuebet. What is valuebet? Translating from English, we will say that this is a valuable bet that is, where the bookmaker made a mistake. Course valuebetu is inflated relative to the real probability of winning type , and placing such a bet gives the player an advantage over the bookmaker. Therefore, it is believed that Kelly's betting system is designed for experienced players who can, firstly, correctly calculate the probability of winning with high efficiency, and secondly, have no problem with finding valuebets. It is the player's experience, combined with a cool analysis of Statistics and information about a particular meeting, that is the basic condition for correctly estimating the necessary betting parameters. You should not suggest the amount of odds set by the bookmaker, as this may distort our own estimates.

A safer version of Kelly's system

It is also worth mentioning some modifications that make Kelly's system even more secure. Well, some players, after calculating the optimal bet, bet it for a lower amount, most often for half or even a quarter of its amount. It is a system "fractional Kelly" , whose application reduces both wins and losses , thus limiting the variability of the size of the player's budget. Looking at the effects in the long term, we will see that although such a modified betting system will bring profits more slowly, but capital will not be subject to too dangerous fluctuations.

Kelly's System-pros and cons

Correctly applied Kelly's betting system has undeniable advantages, which include low risk of bankruptcy, capital stability, high chances of making a profit in the long term and high yield (that is, the rate of return on bets placed). On the other hand, all betting systems however, they have their drawbacks. The Kelly System not an easy way to bet , the player must make calculations and estimates independently and before each bet placed. This is not an easy task, which takes a lot of time, and in addition it takes time to find valuebets . This is all for nothing if the player is not distinguished high efficiency in betting so it is more of a betting system for the "chosen ones". Moreover, since the nature of the system is long-term, the use of it requires the player lots of patience and perseverance .