The Kelly strategy is a variable betting technique that, if done right, can give its user plenty of wins and fewer losses.
As a betting method, the Kelly strategy depends on a player’s bankroll information, odds information, and probability to accurately predict how much money to put on a bet. Gamblers whose goal is to win almost every time should try this technique. However, it is complicated.
That is why we will teach you how to effectively use the Kelly strategy.
According to Investopedia, it was developed by John Kelly, a researcher at Bell Labs. The method was originally meant to track noise issues on long-distance telephone signals. But for some reason, gamblers incorporated the system into betting, first in horse racing.
It was influential in said sports. Bettors now use the Kelly strategy to have the best chance of winning by using it as a general money management system for gambling.
Learning the Basics
The Kelly Strat is a complex method since it relies on a formula. It is also risky for newbies due to its aggressiveness regarding wagering amount. There is a calculator for the system available at Captain Gambling
To master the technique, bettors must know the following:
- Win Probability
- Win/lose ratio
The win probability is the chance that any wager will result in a positive amount. The ratio, on the other hand, is the total positive outcomes which will be divided by the full negative results.
In using the Kelly Strategy, one must use the formula:
f = (bp – q)
f is the fraction of your bankroll that should be wagered, b is the decimal odds of the bet diminished by 1, p is the probability (in decimal form), and q is the chance that the wager loses.
For example, you have a bankroll of P2,500. You believe that your chance of winning at 2.00 odds is 60%.
Following the formula, it will go like this:
b = 2.00 – 1 = 1
p = 60% = 0.60
q = 1 – 0.60 = 0.40
f = ((1)(0.60) – 0.40)
= 0.6 – 0.40
f = 0.2
The result is 0.2, meaning you should wager only 20% of your total bankroll. If you have P2500, you will place a P500-wager.
The Kelly strategy requires a bit of common sense as well. If it suggests only wagering 20% of your bankroll, stick to it. More than the recommended percentage will carry more risk.
Is the Kelly Strategy Effective?
Yes, it is effective. However, it takes time to master the strategy because it relies on mathematics and how good your prediction is.
The Kelly Strategy is a much more effective yet aggressive betting method than the Martingale System. It can also produce big payouts in succession compared to the other technique.
To fully use to your advantage this playstyle, practice your prediction and mathematical skills at OKBET and see if the Kelly Strategy will work for you. Again, you can try many betting methods to see if they will work. A simple trial and error to check if the techniques suit your gambling needs.