Start bank: $198,00
Current bank: $334,77
Since 30.12 I have made 400 bets. The bank total profit stands at $136,77, which is a 69% increase in the bank.
My calculated edge stands at 13,84% profit per bet.
So far, so good. Actually , this is ahead of schedule.
Planned date for buying dream home: Nov.6 2011
Current projected date for buying dream home: Oct.3, 2011
So, it seems to be a whopping full month ahead of schedule! Unfortunately, I am doubtful that this is sustainable. My model is based on less than a 10% edge, although I am running hot right now at 13%. But I'll take it while I can get it
It's been a good weekend, even though I wasn't around on Saturday (had to drive the mother-in-law somewhere)
Total Stake:$126,56 Total Profit:$48,46 Profit % 38,29%
Today I want to talk briefly about bank size, since there have been some questions about why I am using $198 to start the bank.
Bank Size
As a poker player, I can tell you that the money you bring to the table should never be more than 2% of your bank. Here, bank means all the money in your poker account. (Personally, I use 1%). In Betfair betting this means that you use should never be betting more than 2%. So, if you have $10,000
you should not be using more than $200 as a general rule of thumb. The Kelly Criterion will call for larger stakes if you have larger edge, but let's assume your edge is small, under 3%.
So, I treat this entire Florida Dream Home Quest as I would a SNG poker tournament. I play for 1% of my bank. It is treated as money which can be lost with little consequence to my overall betting bank.
So why start small? Why not start big? Why not use the optimum Kelly percentage of your edge to set you start bank (If you have a 10% edge and win about 50% of the time, you should be using more than 1 or 2% of your bank)?
1. Lack of liquidity for larger bets makes compounding harder and slower. It is not going to be easy to slam $1000 bets into the market I play.
2. Psychologically, you should only ever bet inside your comfort zone. You should be able to play without having losses make you change your strategy. One bet should be irrelevent to you. This can only be done using smaller stakes...thus a small bank.
3. Unless you are sure of your edge, if you start with a big bank you are probably betting at levels way over even what Kelly would call for. Betters who violate Mr.Kelly's Criterion on the "overbetting" side will pay seriously for it in the long run, whereas conservative betters who "underbet" what Mr.Kelly calls for will only pay for it by winning less than they should (but win they still shall...).
4. Betting big is bad for your hair. I hate losing streaks, but accept them as necessary. Small bets at a fixed percentage stake limit your bank variance. If you use massive bets (like 25% of your bank), you are going to have some massive downswings. These big downswings kill your compounding, and that is the key.
Anyway..enough for now. I'm glad to see the number of followers rising. If you have any questions feel free to post. I'm off now to see if I can find anything for sale in Florida for $300...
