Staking plan and 10/10 confidence bets

Have a maximum and a minimum bet, perhaps 1 to 10.

i roll a dice As good as any clever staking plan.

As always the correct answer is "use Kelly"

As always Ken will refuse to acknowledge that maths is useful in gambling.

I personally don't believe in staking plans, if Kelly was so good
why do people not use it in casinos ? Besides that, I offered a staking at 20:04. To say that I don't believe maths useful in betting shows how out of touch lori is.

*Thorp's book was actually published in 1962 sorry. Kelly's paper was 1956 I believe.

Also, the phrase "I don't believe in staking plans" is meaningless.

If you level bet you have a staking plan, albeit a fairly boring one. If you don't bet at all, then again, you have a very boring staking plan (Nothing wrong with boring)

So I don't really know what you mean by that phrase.

All Kelly does is optimises your win rate (assuming you're a winning gambler of course) to win as much money as quickly as possible.
There are many assumptions, as we all know, but you can allow for those via various means (Which is why I usually use the phrase "Kelly based staking" rather than "Use Kelly" unlike this thread).

It should be clear to most people that a level stake is a decent staking plan, and also that it's not optimal. Betting £2 on a 100-1 shot and £2 on an evens shot should set alarm bells ringing in terms of risk.

Also betting £2 when your bankroll is £20 is clearly not the same thing as 1000 years later when you've built up and you're now betting £2 out of a £2000 bank.

Betting £2 when you're 100% sure that something's going to happen (If for instance you're a Pakistani cricketer) is also obviously not the same as betting £2 on an 11/10 shot that you know should be evens (a toss of a coin let's say)

Kelly simply allows for these things and within the assumptions (which you can find either by googling threads on here, or by looking up the wiki entry) will grow your bank at the fastest possible rate, it's not some crazy hocus pocus, it's mathematically proven.

Because your expected growth is massively different, for the same reason that if there's a lottery rollover that pays more than £14million (and technically giving you an edge), you'll still have a negative expected growth from betting it unless you're very rich - because you win it so infrequently.

Well of course it does, because it doesn't bet in situations where it doesn't have an edge, as well you know.

You are effectively betting a version of Kelly according to your answers above yes, although you're not adjusting for "how wrong" the price is, so you're using a primitive version of it.

I bet to return 100 points depending on price of course, as in an evens chance
would be 50 (to return 100) a 3/1 chance 25 points and so on, backing or laying.
I don't work from a 'bank' my bank being my wealth, and increase the 'return' as
my Betfair balance increases. I don't try to calculate a degree of 'edge'for
staking purposes, but only bet when I have minimum 'edge', whether it be perhaps 20%
or 40%. I'm very comfortable with what I do. Is this a version of 'Kelly' ?

"My bank being my wealth" is the same for everyone surely?

Yes, you're basically using something related to fractional Kelly. The thing you would change if you were using Kelly is that you'd bet to win more points if the price were "very wrong" as opposed to just being "wrong".

In Kelly you would bet the second you have any edge at all, however in the real world you build in a buffer as it's difficult to know your exact edge in something like a football match. (Although I'll argue it's easier to get quite close than most people think)

"My bank being my wealth" is the same for everyone surely?

Not necessarily some people put x amount into betfair say £500 and hope to turn it into double or more. They consequently make too many bets, chase and eventually lose it all.

When you realise you should only place what you can afford (often more than the 'bank' you put into betfair to bet on one individual event but several times into betfair and make profit withdrawal, is when you start to bet properly and make money!

b) is a fairly obvious point. Overstaking is a killer for any gambler.

a) is also fairly obvious also. you want to be getting the best odds you can get. as an aside, i disagree with people who bet on outcomes that they don't think will happen just because they see extreme value in the price. surely if the bet is not going to come in, or has a very slim chance of coming in, its not advisable to take it. But thats another topic.

the most i will stake on a bet from here on out is going to be 10% of my bank and that will be for what I see as really, extremely strong bets. that will be for boxing bets that i am very confident on.

my base bet percentage will be 1-2% of bank depending on how strong I see it. that will be for horse racing lays. i lay favourites in the win market and i've seen that i can make it work short term at least. question marks about how it will go long term but im not using a massive bank to try it out. I think this is the right way for me to do it.

In football I find some times 'a little bit wrong', a little bit more often 'wrong'
but almost never 'a lot wrong'.In fact with regard to the last 'a lot wrong' I go
back and have another look !!
The 20%+ I seek satisfies me, as does my staking. I don't believe these things need to
be slide rule accuracy as in 20%, 22% 24% etc. I'm more than happy with what I do.

It is important to understand that no one game will decide the overall outcome of a long term betting strategy.
Thus essentially your staking plan must conform to the basic need to keep your losses containable till your wins come in to put you ahead hopefully.
Therefore you must be able to work out ( from past results)  approximately what is the " worst case" percentage drawdown in your capital you can expect to experience in your inevitable losing streaks.
You then calculate your stake working back from that percentage and the current amount of risk capital you are playing with.
AS they say on Wall St, the most important thing in investing is not to run at the first sign of any losses.
The same in gambling.
If you don't stick around and weather out your losing runs, you will not profit in the long run.

Ok....

How do you know you have value? Are you betting out of line odds on other books/comparing price to bf? I assume BF to be pretty spot on 99.9% of the time on the true probability of an event happening.
If you are betting out of line odds at other books, why have a staking plan? Why not bet as much as your bank/limit allows lay off, or preferably dutch against another book? I'm no mathematician, but I'd say that the constant guarantee of a profit would out weigh a potentially inefficient staking plan, despite in the long term you should have value - esp if you have a small bank and playing against variance?

I'm probably missing the point completely as I'm no gambler, but thats how I see it.

But betfair has the advantage of not one persons opinion, but hundreds, if not thousands on one event, so I'd guess that it is probably the most realistic model (but I'm no experienced gambler), so if a bookie has a price above that its a value bet, below, its a -ev bet. When I see people on this forum where £500k has put chelsea at 1.30 to win (and lets imagine that becomes SP), and the individual reckons (with confidence) that 'in his book' chelsea should be 1.25, and therefore getting a value bet at 1.30, is incorrect imo. If sid james offered chelsea at 1.35, that would be the only value bet.
Unless that person happens to be a pakistani bowler I suppose...

Wayne
A simple example.
If your expected max downturn is ( say) 25 points and you wish only to lose a max 25% of your capital on any major losing sequence, then you should only bet 1 point per 100 points of risk capital you have allocated to your system.
The amount of risk capital you have allocated or accumulated should be that figure when your system last reached its highest profit level.

Understanding Kelly Criterion

A hypothetical sequence of 100 bets at even money

For this example we win 54% of our bets

Kelly says we win 54 bets and lose 46 bets the difference is 8% So we bet 8% of our bank

If we had a bank of 1000.00 we should bet 80.00 first bet, then 8% of re-calculated next bank amount.

It is important to note that Kelly formula does not take into account Commission.

Real life scenario. We have a 1000.00 bank and a commission rate of 5%. 54% winners. Now some ifs ~
If we placed 1.00 on all our 100 selection we win 8.00 then deduct comm. = 4.30 profit (our effective edge = 4.3%)
To utilize our bank of 1000 We now look at what we would make in profit at different percentages of our bank
taking into account 5% commission.

% of bank	Profit
0.10%	4.3
0.20%	9.3
0.50%	24.99
1.00%	49.35
2.00%	90.78
3.00%	122.85
4.00%	145.75
5.00%	157.61
6.00%	157.69
7.00%	148.44
8.00%	127.72
9.00%	96.15
10.00%	55.29
11.00%	6.21
12.00%	-49.09
13.00%	-111.07
14.00%	-176.79
15.00%	-246.16
20.00%	-582.02

From this we see that Kelly at 8% would not be the most profitable purely because of commission.
The ideal % of the bank to bet would be in the range 5 to 6%. If you bet more than 11% of your bank
you would actually lose.
As a general rule the best % of your bank to use is your edge %, that gives you a little lee way.
In the above example I would bet 43.00 From a float of 1000 on an even money chance that I calculated had a 54% chance of winning.

I assume BF to be pretty spot on 99.9% of the time on the true probability of an event happening.

I disagree.

On further study.
you may say what if I can get 2.2 price instead of 2.0 (even money)
It seems that whatever Kelly suggests as a percent of your bank to bet
at the odds you can get, the optimal for 5% commission is 2.7% less than
Kelly, Kelly says 15.67% of bank at decimal price 2.20 if 54% strike rate. If paying 5% commission you would
make that 15.67-2.7 = 12.97%