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[acvpp] The Denon Demon?

#1

Sorry, I did a cut and paste on the wrong section. I meant to say is "bankroll x advantage/variance generalizable?" if generalizable is a word....

···

--- On Fri, 5/1/09, Rob Reid <rreid0859@yahoo.com> wrote:

From: Rob Reid <rreid0859@yahoo.com>
Subject: Re: [vpFREE] Re: [acvpp] The Denon Demon?
To: vpFREE@yahoogroups.com
Date: Friday, May 1, 2009, 10:10 PM

I have not tried to figure out the math behind Kelly. Actually I'm not even sure I could figure it out if I tried.

Is this formula ($4,221 x .0077/26 = $1.25) generalizable?

Thanks-rob

--- On Fri, 5/1/09, nightoftheiguana2000 <nightoftheiguana2000@yahoo.com> wrote:

From: nightoftheiguana2000 <nightoftheiguana2000@yahoo.com>
Subject: [vpFREE] Re: [acvpp] The Denon Demon?
To: vpFREE@yahoogroups.com
Date: Friday, May 1, 2009, 4:41 PM

--- In vpFREE@yahoogroups.com, "Louis Mogol" <LouMogol@...> wrote:

The time to increase your bet is when you're up.

According to Bell Labs researcher J.L. Kelly, that's correct. The approximate optimal Kelly bet is:

bankroll x advantage/variance

So, if you were betting the optimal Kelly fraction, then doubled your bankroll, the new optimal Kelly fraction would be double. Conversly, if you halved your bankroll, the new optimal Kelly fraction would be halved.

Example, FPDW, your bankroll is $4,221, the approximate optimal Kelly bet is:

$4,221 x .0077/26 = $1.25

Betting more than Kelly increases risk and actually reduces bankroll growth (a bad combination and counterintuitive for many people). Betting less than Kelly reduces risk at the expense of less bankroll growth (a safer approach).

http://www.jazbo.com/videopoker/kelly.html
http://en.wikipedia.org/wiki/Kelly_criterion

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#2

Yes, it is. If you want to break it down even further (and for an easier,
but less accurate number) any single bet you make should be no bigger a
percentage of your bankroll than your edge at the game. So, if you have an
edge of 1%, you should bet no more than 1% of your bankroll. Recalculate as
needed in order to determine each bet size. This applies to anything really,
I've used it for BJ, Three Card Poker and sports betting.

···

On Fri, May 1, 2009 at 3:18 PM, Rob Reid <rreid0859@yahoo.com> wrote:

Sorry, I did a cut and paste on the wrong section. I meant to say is
"bankroll x advantage/variance generalizable?" if generalizable is a
word....

--- On Fri, 5/1/09, Rob Reid <rreid0859@yahoo.com <rreid0859%40yahoo.com>> > wrote:

From: Rob Reid <rreid0859@yahoo.com <rreid0859%40yahoo.com>>
Subject: Re: [vpFREE] Re: [acvpp] The Denon Demon?
To: vpFREE@yahoogroups.com <vpFREE%40yahoogroups.com>
Date: Friday, May 1, 2009, 10:10 PM

I have not tried to figure out the math behind Kelly. Actually I'm not
even sure I could figure it out if I tried.

Is this formula ($4,221 x .0077/26 = $1.25) generalizable?

Thanks-rob

--- On Fri, 5/1/09, nightoftheiguana2000 <nightoftheiguana2000@yahoo.com<nightoftheiguana2000%40yahoo.com>> > wrote:

From: nightoftheiguana2000 <nightoftheiguana2000@yahoo.com<nightoftheiguana2000%40yahoo.com>
>
Subject: [vpFREE] Re: [acvpp] The Denon Demon?
To: vpFREE@yahoogroups.com <vpFREE%40yahoogroups.com>
Date: Friday, May 1, 2009, 4:41 PM

--- In vpFREE@yahoogroups.com <vpFREE%40yahoogroups.com>, "Louis Mogol"
<LouMogol@...> wrote:
> The time to increase your bet is when you're up.

According to Bell Labs researcher J.L. Kelly, that's correct. The
approximate optimal Kelly bet is:

bankroll x advantage/variance

So, if you were betting the optimal Kelly fraction, then doubled your
bankroll, the new optimal Kelly fraction would be double. Conversly, if you
halved your bankroll, the new optimal Kelly fraction would be halved.

Example, FPDW, your bankroll is $4,221, the approximate optimal Kelly bet
is:

$4,221 x .0077/26 = $1.25

Betting more than Kelly increases risk and actually reduces bankroll growth
(a bad combination and counterintuitive for many people). Betting less than
Kelly reduces risk at the expense of less bankroll growth (a safer
approach).

http://www.jazbo.com/videopoker/kelly.html
http://en.wikipedia.org/wiki/Kelly_criterion

------------------------------------

vpFREE Links: http://members.cox.net/vpfree/Links.htm

Yahoo! Groups Links

[Non-text portions of this message have been removed]

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vpFREE Links: http://members.cox.net/vpfree/Links.htm

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