TheSnapper

Current Bank: $710,62
Start Bank: $198,00

Mr. Kelly's Bank: $24,70
Mr.Kelly's Start Bank: $20,00

My bank increased $31,29 yesterday with 3/4 wins (+4,6%). Mr. Kelly lost 1/2 races again and dropped $1,41.

I have only been managing to get in a few bets each day due to both lack of time and a lack of good opportunities, there were 4 races yesterday with no big price moves, so the prices were rather in line, hence, nothing for me.

Since I moved to half-kelly stakes using half of my bank, the stats have been good:

Runners Laid: 130 (1 per race)
Staked $1496,73
Profit: $224,71
Edge: 15% (although edge on liability is around 6%)

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Understanding the Kelly Criterion, part 3

So, how much should we bet? Well, it all depends on your edge. Let me give an example.

Let's imagine that we are flipping coins. I have  trick coin that lands on heads 5% more than on tails. After 100 flips, we can expect to have 55 heads and 45 tails. That's 10 more heads than tails at odds on 1-1 (or 2.0 in digital odds).The Kelly Criterion is simple: bet your edge/the odds. In our case, we should use 10% stakes (10 more heads than tails divided by the 1-1 odds). If we then proceed and do thousands and thousands of coin flips, we will end up with more profit than any other stake we use.

Also notice that if you use the Kelly Criterion, you will use large stakes with favourites and low stakes with outsiders. It basically wants you to bet more when you have a high probability of winning and bet less when you have low chances of winning.

For layers, this means the reverse. Bet less against likely winners and bet more against outsiders. Notice that this also matches the statistics I posted on the bookies edge on runners over 4.0 ...your edge is higher against outsiders as a layer, so this makes sense. In the long run you will be better off laying outsiders than favourites.