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Kelly agrees with your first example as far as I can see.
54% at 2.00 with 5% commission is 54% at 1.95, which comes out at 5.58% of bank to bet. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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*That is to say you have to calculate it based on the odds you're actually getting, not the odds on the screen.
Betfair try to claim it's the losers that pay commission yet the price shown on the screen factors in the winners paying it. You have to allow for this before betting of course :) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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So let's assume that you might, just might, lose 10 evenchance bets in a row,and then win 11 in a row. So you win 11 out of 21, being 52.38 %.
So, using your example , you bet ( say) 5 % on your declining bank balance Bet Amount Bank 100.00 1 5.00 95.00 2 4.75 90.25 3 4.51 85.74 4 4.29 81.45 5 4.07 77.38 6 3.87 73.51 7 3.68 69.83 8 3.49 66.34 9 3.32 63.02 10 3.15 59.87 11 2.99 62.71 * 5 % comm. now payable 12 3.14 65.69 13 3.28 68.81 14 3.44 72.08 15 3.60 75.50 16 3.77 79.08 17 3.95 83.36 18 4.17 87.32 19 4.37 91.47 20 4.57 95.81 21 4.79 100.36 If on the other hand you just flat bet 5 units, you would end up with 102.25, that is lose 50 ( 10 * 5)and win 52.25 ( 11* 4.95). That is, Kelly makes you worse off, not better off. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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As explained by Lori with those figures you have given ~
52.38% and your odds even money less commission would be decimal odd of 1.95 Put that into Kelly and this is what you get.
2 things to compare here is that 1. your gaining in this case .02% per bet. So because you are compounding up You will eventually make a lot more than level stakes. 2. Is after 10 bets at level stakes of 2.20 you would be down 22.00 where Kelly is only losing 19.91 I know who would last the longest losing sequence and if the win rate held true which one would make the most profit in the long run. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Of course all your calculations assume that you know your edge before you bet.
You might think you know it but you don't really. You will only actually know if you have an edge at the end after a large number of bets. Everything else is conjecture and what you might call a " perceived" edge. As anybody on here will know ad nauseam, I believe that the concept of " value" betting is highly overblown, because one person's good value calculation is another person's ( equally qualified to judge) bad value. It's all in the eye of the beholder. Bookies don't make absolute value judgements, they just set prices to attract customers on the side of the book they need to balance their positions. Sure the original opening prices are relevant to historical stats, but they don't necessarily mean anything in terms of what the bookies think or don't think is value.. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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You might think you know it but you don't really.
You probably know it to within 0.5% though, which is fine. It's really not that hard to have a very good idea of your edge (As I understand it , it's harder in horse racing than normal sports though) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jimbo747 Joined: 15 Feb 08
Replies: 1850 30 Sep 10 20:34 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. For me this is where so many people go wrong. They assume that the betfair market ( or any other market is correct ). Why? Because its obviously popular opinion? Any bet that is struck pre match should be evaluated before you look at the market. I go through the weekend fixtures and price them up myself and if they are spot on with the prices then no bet - if they are out of line then you take advantage. For me when you look at the market first, it then sort of distorts your thinking, rather than doing your thinking first and then looking at the market | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Lori
I do admire your confidence that your value assessments are correct to such a degree in a field of betting where there is no mathematical certainty of anything ever happening on average, unlike in a casino. More particularly if you are then prepared to back up such value assessments with such a theoretical approach to staking, such as Kelly. You're a braver ( though some might say a stupider) person than me. But the bottom line is whether you win long term. You claim you do, and I have no reason to disbelieve you, and so that's all that matters essentially. However, I very much doubt that many others who try to follow your strict value/ Kelly approach will fare as well. Again I might be wrong. After all it's all just personal opinions and beliefs we are expressing on here. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Just to be entirely clear, while I preach that everyone learn how Kelly works, there's no massive need to follow it strictly. (Although again, if you get odds on a coin you know is fair, you really should get very close)
It serves the huge purpose of setting you a maximum (Which can be recommended to the experienced and new alike) and also give a feel for how to alter bet sizes based on the various factors. In the real world there are several factors that keep you away from the maximum... in the order they swirl into my mind.. 1) Personal utility - There comes a point where you're happy with a certain size win and uncomfortable with a certain size loss. In theory I can lose 98% of my bank and rebound, but in practise I have to pay rent at some point and feed my insatiable urge for curries at least once a week. 2) Time. You don't want to be hammering away working out your bet size to three decimal places when in a hurry. 3) Disguise. While thinking you're an idiot/crazy, a bookie will at least take passing interest in someone who puts in strange size bets. I don't like people taking an interest in me (Except on forums, where obviously I'm a bit of an attention wh**e or I wouldn't be posting) 4) Accuarcy. The one people always dig up. You can't be sure of your exact level of winning, so you have to allow for this. Again though I suggest everyone at least have an idea what's going on, treat the number as a maximum, and build something they're comfortable with within the Kelly framework. It should certainly allow most experienced gamblers to be a little more aggressive on occasion (I say that because most beginners will be shocked how low the maximum is most times) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sound like very good, commonsense rules to follow.
Just drop out the Kelly and all should be fine. Just joking. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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For me this is where so many people go wrong. They assume that the betfair market ( or any other market is correct ). Why? Because its obviously popular opinion? Any bet that is struck pre match should be evaluated before you look at the market. I go through the weekend fixtures and price them up myself and if they are spot on with the prices then no bet - if they are out of line then you take advantage.
For me when you look at the market first, it then sort of distorts your thinking, rather than doing your thinking first and then looking at the market But what makes your opinion more 'correct' than that of the market, and opinions of 100's+ other players? Thats the part I don't yet grasp. As in my earlier example, if chelsea are SP 1.30 to win on here, and 1.35 at ladbrokes, imo the 1.35 represents value. If you put Man Utd at your own odds of winning as 1.5, yet is 1.6 to back at BF, in your opinion this makes it value, whereas to me that would be true probability in majority of cases and would not be value long term. How is your figure more accurate than one formed with thousands of opinions? I just want to understand why popular opinion is wrong more than 0.1% of the time? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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How is your figure more accurate than one formed with thousands of opinions?
Hard work for the most part. For instance in the days of that daft system (forgive me if I get this backwards, I wasn't doing much soccer at that time) where people were told to lay the draw and cover it with 0-0, laying 0-0 was a profitable proposition (I seem to remember buzzer was the one who posted about this (after the event of course, he's not daft)) The sheer weight of complete idiots was too much for the market to handle. There are less obvious examples of this all the time, international events can pick up heavy bias for instance. I remember when Bruno fought Tyson, you could bet 1/3 Tyson in England and 9/1 Bruno in the USA. The internet wasn't really around much then to level off the arb like it would today, but that doesn't mean that people have stopped betting with their heart rather than their brain cells, it just means the differences are more subtle and around for less time. Popular opinion would be wrong ALL the time if it was one man one vote, but unfortunately the clever guys get more than one vote. (IE they have more money in general, especially when betfair take the bets off the super-rich fish) which means the market gets pretty close to efficient. I suspect you're underestimating the sheer time and effort (often by teams of people) that goes into unearthing an edge. It's a rare gambler in this day and age who can do it simply by feel (but they do exist) alone. A combination of feel, maths and never ending thirst for information (team news, weather news, likely strategy, whatever) goes into keeping things as accurate as possible. Some people for example get up at 3:33am to see what the weather is going to be at a godforsaken golf course in Wales in 4 hours time, simply because they might get an extra few quid on the event being delayed or going ahead.............. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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feed my insatiable urge for curries at least once a week.
Me too. I just gamble so I can afford more curry. |