In the game of baccarat which is 50/50 let us say we win 51 percent of the hands we play would using a 1 2 3 progression hurt or help your profitability as compared to flat betting.
I am only saying if we win 51 percent of the games we play, I am really bad at MATH so some help would be GREAT guys........................1-2-3 progression.
Thanks
Stuart
Quote from: bikemotorman on Sep 28, 04:45 PM 2018
In the game of baccarat which is 50/50 let us say we win 51 percent of the hands we play would using a 1 2 3 progression hurt or help your profitability as compared to flat betting.
I am only saying if we win 51 percent of the games we play, I am really bad at MATH so some help would be GREAT guys........................1-2-3 progression.
Thanks
Stuart
I sent you a PM response.
General, instead of PM
Show us your superior math
Stuart, I'm assuming you're talking into account the fact that the banker bet is more likely to win, but this doesn't give you an edge because of the commission. Anyway assuming 1:1 odds and that you have a 51% chance of winning, here's a chart showing the difference in results using flat bets and 3 progressions. I coded both positive and negative 1,2,3 progressions (green & blue lines) and red is flat betting. The purple line is using kelly betting which is the optimum "scientific" way to bet. It's very simple and for this bet and edge you just bet 2% of your bank (this is rounded up to whole number stakes).
There's really no contest. There are two vertical scales because the kelly betting results dwarf the other progressions. The scale for the kelly bet is on the right side of the chart. We're talking about an order of magnitude difference here; approximately 10 times better results than for the other progressions. ;-).
If you don't use kelly you're better off using either of the 1,2,3 progressions, which track each other pretty closely.
(link:s://i.postimg.cc/FzMJkBBz/progressions1.png)
Wow, I have never heard of this KELLY method JOE could you explain how it works in our Baccarat session say we want to profit 75.00 dollars a session?????
Stuart
There are a lot of sites which explain it, just google "Kelly criterion". Here's one :
link:s://:.topratedbettingsites.co.uk/guide/kelly-criterion/
It's very easy to work out your bet size using the simple formula, the hard part is first finding a true advantage and then calculating it.
Quotesay we want to profit 75.00 dollars a session?
It doesn't really work like this. There's no guarantee that you will make X dollars per session, but as long as you have the edge it will maximize your profits over time.
Kelly is an example of percent of bank staking which is used a lot in sports betting. It's safer and more efficient than most other progressions.
link:s://:.tippingsports.com/betting/percent_of_betting_bank
Stu,
The bet will fluctuate based on your bank and hit rate.
For example, if I know I win 58% of sports bets then my next bet is 11.8% of my bank.
And I thought the Six Point Divisor was a bit hard lol ok I will read it now.
Stuart
Ok I read it and have no idea how to use it, baccarat is a almost 50/50 game so how would I figure that out lol.
I need a drink lol............................let me go grab my SOYMILK lol.
Stu, it's really easy, honest!
Forget about the formula, all you do is to take your starting bank and the first bet is 2% of it. So if it's $100 your first bet is 0.02 * 100 = $2
Suppose you win this bet, your bank is now $102. Just do the same again, 2% of $102 is 0.02 * 102 = 2.04. Since you can't bet $2.04 you just round it up or down. If the result is more than $2.5 you round it up to $3, and if it's less you round down to $2, so the next bet is also $2.
Suppose you win the next bet, your bank is now $104. To calculate the next stake you just do the same again (it never changes!), so your stake is 0.02 * 104 = $2.08, so round down to $2. Since you have an edge your bank will soon get to the point where your stake increase to $3, then $4, etc, but if you hit a losing run the stake will go down because the stakes are always proportional to the size of your bank. See how it works?
It's much much easier than the 6 point divisor plan. Whatever your bank is you just multiply by 0.02 to get the next stake, that's it. ;-)
You only have to use the formula if your edge and/or the odds of the bet changes.
You can't really use the Kelly unless you have the edge.
Edge/expectancy. If you don't have the edge then the Kelly basically says not to bet, because you would need to bet negative amounts of money... which isn't possible.
Go find the edge. Read Dr. Elliot Jacobson. There are a few different ways to get it.
I know that, but he says he has an edge. Whether he actually does or not is not my concern.
Supposing he doesn't, % of bank is still safer than a negative progression. ;-)
WOW, THAT IS WAY MORE EASY THEN THE SIX POINT.
JUST TWO PERCENT OF YOUR BANK, I GUESS WE CAN ALSO SAY OUR DAILY BANK IF WE WANT TO JUST RISK 500 DOLLARS FOR THE DAY.
THANKS JOE
Here are a couple of guys who discuss how to use the Kelly concept for options in the stock market.
link:s://:.youtube.com/watch?v=iykpeZtoNIk
Joe how did you come up with the 2 percent for my example of Baccarat and winning 51 percent of our games?????????????????
Stuart
Quote from: bikemotorman on Sep 29, 02:18 PM 2018Joe how did you come up with the 2 percent for my example of Baccarat and winning 51 percent of our games?
Stu, the formula is :
f = [ p(b + 1) - 1 ] / b
The symbols stand for these things :
f = fraction of bankroll you bet (this is what you want to know)
p = probability of your bet winning (you said 0.51)
b = odds (payout), which is 1:1, so b = 1
Put the numbers into the formula :
f = [ 0.51 * (1 + 1) - 1 ] / 1
= [ 0.51 * 2 - 1 ] / 1
= [ 1.02 - 1 ] / 1
= 0.02
I think this formula is way too risky. It does not account for variance.
Let's suppose you play european roulette with a huge advantage and bet exclusively single numbers with an expected hit rate of 1 in18. The payout is obviously 35 units.
According to the formula you have to bet around 2,8% percent of your bankroll.
In case you hit a bad run and miss your number 35 times you quickly lose most of your initial bankroll.
Negative progressions with a stop loss are much safer choice.
Ok, guys I just found this nice Kelly Calculator.
link:s://:.albionresearch.com/kelly/default.php
A Kelly Strategy Calculator
link:s://:.albionresearch.com/kelly/default.php
A Kelly Strategy Calculator
favourite twitter facebook email
Introduction
J.L.Kelly, in his seminal paper A New Interpretation of Information Rate (Bell System Technical Journal, 35, 917-926 see below) asked the interesting question: how much of my bankroll should I stake on a bet if the odds are in my favour? This is the same question that a business owner, investor, or speculator has to ask themselves: what proportion of my capital should I stake on a risky venture?
Kelly did not, of course, use those precise words â€" the paper being written in terms of an imaginary scenario involving bookies, noisy telephone lines, and wiretaps so that it could be published by the prestigious Bell System Technical Journal.
Assuming that your criterion is the same as Kelly's criterion â€" maximizing the long-term growth rate of your fortune â€" the answer Kelly gives is to stake the fraction of your gambling or investment bankroll which exactly equals your advantage. The form below allows you to determine what that amount is.
Please read the disclaimer, if you haven't done so already.
Gambling Bankroll: $
250
Odds offered:
1
to
1
e.g. 7 to 4, 2 to 1, etc.
Odds of 2 to 1 on should be entered as 1 to 2,
Odds of 11 to 10 on should be entered as 10 to 11
Your estimate of your
The probability of Winning:
51
% Use a conservative (low) estimate.
Bets must be multiples of $
1.00
The minimum bet allowed is: $
5.00
Results
The odds are in your favour, but read the following carefully:
According to the Kelly criterion, your optimal bet is about 2% of your capital, or $5.00.
On 51% of similar occasions, you would expect to gain $5.00 in addition to your stake of $5.00 being returned.
But on those occasions when you lose, you will lose your stake of $5.00.
Your fortune will grow, on average, by about 0.02% on each bet.
Bets have been rounded down to the nearest multiple of $1.00.
If you do not bet exactly $5.00, you should bet less than $5.00.
The outcome of this bet is assumed to have no relationship to any other bet you make.
The Kelly criterion is maximally aggressive â€" it seeks to increase capital at the maximum rate possible. Professional gamblers typically take a less aggressive approach, and generally won't bet more than about 2.5% of their bankroll on any wager. In this case that would be $5.00.
A common strategy (see discussion below) is to wager half the Kelly amount, which in this case would be $2.00.
If your estimated probability of 51% is too high, you will bet too much and lose over time. Make sure you are using a conservative (low) estimate.
Please read the disclaimer as well as the notes below.
More Information
The BJ Math site used to contain a great collection of papers on Kelly betting, including the original Kelly Bell Technical System Journal paper. Unfortunately, it is now defunct, and only contains adverts for an online casino. However, you can find much of the content through the Wayback Machine archive. The Internet Archive also contains a copy of Kelly's original paper which appeared as A New Interpretation of Information Rate, Bell System Technical Journal, Vol. 35, pp917-926, July 1956. (If this link breaks â€" as it has done several time since this page was written â€" try searching for the article title).
We based the above calculations on the description given in the book Taking Chances: Winning With Probability by John Haigh, which is an excellent introduction to the mathematics of probability. (Note that there is a misprint in the formula for approximating average growth rate on p359 (2nd edition) and the approximation also assumes that your advantage is small. There is a short list of corrections which can be found through John Haigh's web page).
Note that although the Kelly Criterion provides an upper bound on the amount that should be risked, there are sound arguments for risking less. In particular, the Kelly fraction assumes an infinitely long sequence of wagers â€" but in the long run we are all dead. It can be shown that a Kelly bettor has a 1/3 chance of having a bankroll before doubling it, and that you have a 1/n chance or reducing your bankroll to 1/n at some point in the future. For comparison, a “half kelly†bettor only has a 1/9 chance of halving their bankroll before doubling it. There's an interesting discussion of this (not aimed at a mathematical reader) in Part 4 of the book Fortune's Formula which gives some of the history of the Kelly criterion, along with some of its notable successes and failures.
Jeffrey Ma was one of the members of the MIT Blackjack Team, a team which developed a system based on the Kelly criterion, card counting, and team play to beat casinos at Blackjack. He has written an interesting book The House Advantage, which examines what he learned about managing risk from playing blackjack. (He also covers some of the measures put in place by casinos to prevent the team winning!)
So the Kelly method is kind of like flat betting but not really, I am going to ask my playing partner to see if we can try it out.
We flat bet most of the time, however, we do at times do a two bet then once in a while a three-bet just to get back to even.
Our max loss is eight units.
Here is the link address if you use it for Baccarat it is 50/50 or 1 to 1.
link:s://:.albionresearch.com/kelly/default.php
Stuart
Quote from: Kairomancer on Sep 29, 05:30 PM 2018I think this formula is way too risky. It does not account for variance.
Yes that's a recognized weakness of the Kelly. Often punters prefer to use "half" Kelly or even "quarter" Kelly.
Quote from: Joe on Sep 30, 04:16 PM 2018
Yes that's a recognized weakness of the Kelly. Often punters prefer to use "half" Kelly or even "quarter" Kelly.
In roulette we incorporated an additonal variable that represents confidence level in the playing conditions. For example if the confidence level is at 60% then you multiply that times your betting percentage to move it down in value.
Edge/expectancy x confidence level = bank to bet ratio
Unless you have the edge in bac or roulette the Kelly isn't going to help. As a matter of fact the results it gives you will be a negative value. Rather than focusing so much on the progression you should first worry about how to get the edge.
The purpose of kelly formula is to maximise the utility of the outcomes
The key word here is maximise
The problem with kelly formula is in the application side
The user in his decision making process has maximum utility and capital preservation among the criteria how his portfolio grows
By maximum utility, Kelly formula do see large volatility that the user may not be comfortable with
It uses the math calculated expected value
However, most users tend to have a lower expected value that is risk averse that reflect more of their capital preservation focus
Hence, this math formula is peppered downwards to the degree to bring it inline with the users risk tolerance
The Kelly only works if you already have the edge.
If you don't have the edge, then you can't play the Kelly progression.
link:s://:.youtube.com/watch?v=qTkkSMAL2h8
Over the edge
Quote from: The General on Sep 30, 06:13 PM 2018
In roulette we incorporated an additonal variable that represents confidence level in the playing conditions. For example if the confidence level is at 60% then you multiply that times your betting percentage to move it down in value.
Edge/expectancy x confidence level = bank to bet ratio
The problem is that your confidence level is highly subjective value to incorporate it into mathematically sound formula.
In other words you are just making guesses.
Progressions with stop loss in most cases are still better choice.
Though your modified formula could be used as a starting base bet then add progressions to maximize profit
Why guessing when you can be sure that you eventually almost always hit your profit mark in most sessions.
Yes we do have an edge we win about 52 percent of the hands we play in Baccarat on Betphoenix and the results have been quite good, we did have a few days where it got a bit rough but I was advised hang on Stuart we are only down 16 units.
I got anxious instead of trusting our bet selection but since then its been much better we have refined the process to be more efficient.
We started at 5 dollar units and built our bank up so we could go up to 10 dollar units.
In reality, we are winning more like 54 or 55 percent but I low balled it just in case we have some more rough shoes.
I am working on the making sure to stick to the method and not move the goalposts so to speak like we have heard so many people do at times PATIENCE AND DICIPLINE.
At the time I find myself getting upset if I lose a few plays but steady and bits of patience is a skill I am getting better at, my playing partner will say ok we have won six units let us quit till later in the day and I want to grind out some more wins but he is very steadfast on how the rules work.
I am learning guys remember as LANKY used to say PATIENCE AND DICIPLINE.
Stuart
I forgot to mention our MAX LOSS is 8 units for the day.
Stuart
Quote from: The General on Sep 30, 07:22 PM 2018If you don't have the edge, then you can't play the Kelly progression.
Correction, you
can play it, but you will lose, through not as much as you would if using a negative progression. However I agree with you that the first order of business should be getting the edge; no progression, no matter how large your bank, will give you that.
Quote from: Joe on Sep 29, 10:53 AM 2018
Stu, it's really easy, honest!
Forget about the formula, all you do is to take your starting bank and the first bet is 2% of it. So if it's $100 your first bet is 0.02 * 100 = $2
Suppose you win this bet, your bank is now $102. Just do the same again, 2% of $102 is 0.02 * 102 = 2.04. Since you can't bet $2.04 you just round it up or down. If the result is more than $2.5 you round it up to $3, and if it's less you round down to $2, so the next bet is also $2.
Suppose you win the next bet, your bank is now $104. To calculate the next stake you just do the same again (it never changes!), so your stake is 0.02 * 104 = $2.08, so round down to $2. Since you have an edge your bank will soon get to the point where your stake increase to $3, then $4, etc, but if you hit a losing run the stake will go down because the stakes are always proportional to the size of your bank. See how it works?
It's much much easier than the 6 point divisor plan. Whatever your bank is you just multiply by 0.02 to get the next stake, that's it. ;-)
You only have to use the formula if your edge and/or the odds of the bet changes.
JoeCoder,
What are the pro of this staking plan? can you please tell me why you recommending it?
thx
RB, I posted a link in a previous post which explains it. I'm recommending it because nothing beats it in terms of compounding your winnings (
assuming you have an edge), although it does have its downsides.
From Wikipedia :
QuoteIn probability theory and intertemporal portfolio choice, the Kelly criterion, Kelly strategy, Kelly formula, or Kelly bet is a formula used to determine the optimal size of a series of bets in order to maximise the logarithm of wealth. In most gambling scenarios, and some investing scenarios under some simplifying assumptions, the Kelly strategy will do better than any essentially different strategy in the long run (that is, over a span of time in which the observed fraction of bets that are successful equals the probability that any given bet will be successful).
Quote from: bikemotorman on Sep 28, 04:45 PM 2018
In the game of baccarat which is 50/50 let us say we win 51 percent of the hands we play would using a 1 2 3 progression hurt or help your profitability as compared to flat betting.
I am only saying if we win 51 percent of the games we play, I am really bad at MATH so some help would be GREAT guys........................1-2-3 progression.
Thanks
Stuart
Mathematically it would be wiser not to
bet progression bc you multiply the house edge.
1.06% Banker to the 2nd power (when you double up)
1.24% Player to the 2nd power (when you double up)
1.06% Banker to the 3rd power (when you triple up)
1.24% Player to the 3rd power (when you triple up)
Far and away stick to flat betting with Baccarat imo.
Ok Proof I am trying to work with the Kelly and come up with a good amount to flat bet it will most likely be 10 dollar units.
As long as you play the zig zag and the longer runs in baccarat we are at times at 54 percent win to loss ratio so I think a flat Kelly would be great.
Stuart
Man we just played flat bet 10 dollar units for like thirty minutes and wow it takes way more discipline then I have at this point we were down six units and I had to go to a 1-2 progression to catch back up and yes its like you are borrowing from your future wins to some extent.
Stuart
Just want to show a little trick I have been playing with a bit to get me to 50/51 in baccarat.
I have printed out 200 coin tosses from Random.org and I play heads as player and tales as the banker in our 50/50 game called baccarat, I just use the coins as the base and will override the coin on any zigzag or straight runs.
Take a look guys its just a sample.
Stuart
WOW, holy Toledo batman 19 players in a row this morning on Betphoenix.
19 players in a row WOW.
Quote from: bikemotorman on Oct 02, 01:27 PM 2018
Just want to show a little trick I have been playing with a bit to get me to 50/51 in baccarat.
I have printed out 200 coin tosses from Random.org and I play heads as player and tales as the banker in our 50/50 game called baccarat, I just use the coins as the base and will override the coin on any zigzag or straight runs.
Take a look guys its just a sample.
Stuart
Hi Stuart,
you have printed out 200 coin tosses, you show us 36 coins after any zigzag or straight runs.
How do you decide when to bet ?
Tnx
In the above case, I had no reason to use the coins but I am on all zig-zag and straight runs but when I have no clue what to play I may also play the side with the most circles and if that does not work I go to the coins.................go with the FLOW never against the FLOW.
HEADS IS PLAYERS, TALES IS BANKERS, that is the best selection when nothing else works.
Stuart