Logarithmic utility has been widely discussed since Apply the Kelly Criterion to Investing. 7. The formula is quite simple, but very useful. The Kelly Criterion is most often used by card counters. The Kelly Criterion is a formula which accepts known probabilities and payoffs as inputs and outputs the proportion of total wealth to bet in order to achieve the maximum growth rate. Learn how to correctly use criterion and criteria with sentence examples, worksheets, & quizzes at Writing Explained. When applying the fractional Kelly value of 0. 35) / 0. " For Blackjack, when there is 1% edge, Kelly criterion says one. This gives us a Sharpe Ratio of S = 0. 5 goals in 5 of the latest Divizia A matches of UTA Arad. Gain of Positive Outcome : Enter the potential gain of a positive outcome. 9. The Kelly Criterion was the subject of an incomprehensibly bitter argument in the 1970s/1980s. Created in 1956 by John Kelly, a Bell Labs scientist, the Kelly criterion is a formula for sizing bets or investments from which the investor expects a positive return. In particular, it maximizes the expected growth rate and the median of the terminal wealth. The Kelly criterion proposes to choose f so that g(f) is maximized. 1:20. 1-p)Enter the number of times you’ll place the sequence of wagers. Oh yeah Kelly criterion is what I mean by bet spread. The Kelly Criterion is the brilliant summation of a betting strategy first discovered by Information Theorist John Kelly. Montpellier HSC - Stade Brestois 26/11/2023 6:00. The Kelly Criterion: Comparison with Expected Values. Today the best prop trading firms use this formula to maximize the possible. It can seem counterintuitive in real time. Under few conditions, using Monte Carlo simulations with different scenarios we prove that the Kelly criterion beats any other approach in many aspects. a. where 𝑓∗ is the Kelly Fraction - the optimal amount you invest in your risky asset while the rest sits in a hypothetical risk-free asset (e. Let’s do the maths. Kelly Criterion The Kelly criterion (Kelly1956) is a formula for allocating bets or investments over the results of a chance situation, represented as a noisy binary private channel in which anThe essence of the Kelly criterion for beginner players. 5653e-8. 2nd Chance Bet up to $250. Given all these pieces of information, the maximum win, specifically on BitRocket, is $40,000 per game. Understanding Kelly criterion is almost useless in practical investment management. Traders often search for better position sizing methods to amplify their strategy. K = p x B (1 – p) / B Where: f = fraction of wealth wagered or % of making the highest profit on investment or gambling. Consider the first three bets:By using the Kelly Criterion can determine how much of your bankroll you should choose to use for that bet by doing a simple sum of 55 - 45 = 10. Hmmm… i know oddsjam does like free 15 min calls to discuss the service, in case there is anything worth evaluating? This might be a “wait for the long run” thing, as is the case for other positive ev endeavors like card counting. How can you develop a natural intuition for betting value? Why is value the key element of successful betting? What are the key considerations when seeking value bets?The NFL’s Week 11 slate features several great matchups, with Bengals-Ravens on Thursday night and Eagles-Chiefs on Monday bookending a weekend full of interesting games. Adjust your posterior for information the market has. Here is some sample code in Python using the backtrader library to implement the Kelly criterion on a strategy: import backtrader as bt. If there is a fixed amount of bets the Kelly criterion will be suboptimal, but as the number of bets grows the optimal strategy will asymptotically reach the Kelly criterion. b is the net odds received on the wager (“ b to 1″); in the example above, it would be 1. The Kelly Criterion is a strategy that can be used in several. Kelly Calculator is a calculator for investments based on the Kelly Criterion. How to use the Kelly Criterion to manage money based on your stock trade history. AFC Wimbledon Notts County 25/11/2023 16:00. Using the same Kelly calculation as before we can now determine the optimum position size for a trade. The Kelly Criterion formula allows bettors to maximize profits from a particular bankroll, based on the value the bet holds. This value should be in decimal format (e. Last casino I went to, table minimum with no shuffler was $50. The Kelly criterion finds these small wealth outcomes are offset by much larger wealth outcomes, but because our utility of wealth is sub-logarithmic they are not. The Kelly Criterion is a bet-sizing technique which balances both risk and reward for the advantage gambler. 1:1 odds 0. Developed by John Kelly, who worked at Bell labs, the Kelly Formula was created to help calculate the optimal fraction of capital to allocate on a favorable bet. AlgorithmicTrading. The kelly formula helps investors to determine the optimal amount to put into a single trade. The picture above has 2 simulations of betting at 20%, 50%, and 75% and 4 at the Kelly Criterion amount. Over time, on. The way these teams are playing. logG∞ = ∞ ∑ t = 1loggt. 2 – Kelly’s Criterion. I’m a professional trader and former quant and I don’t know a single actual pro who uses anything like Kelly to size bets. If the expection is not positive, then f∗ ≤ 0 f ∗ ≤ 0 and the optimal amount to bet is to not (obviously). Or learning and debating with Richard Feynman. We can use Kelly criterion to figure out how much of our stake S to wager. version" is mentioned in a few of the better introductory textbooks, and it is the subject of William Poundstone's excellent popular book Fortune's Formula. Based on the Kelly criterion, K% = (1 × 0. Suppose the following game: A jar contains 10 10 jelly beans. 3 Development of modified Kelly criteria. If the ROI is negative, there is no profit available and you will have a guaranteed loss. 67% of your account balance on a single trade. Using kelly: 119 * 1. 267%. Typersi. edge2 edge2+σ2 = σ2 market σ2 market+σ2. Example: We have 3 independent bets. Kelly percentage number = 0. 4 and a win-loss ratio (R) of 3. May have to change the equation to get exactly like kellyKelly Criterion maximizes the wealth in the long-run. Intertemporal portfolio choice is the process of allocating one's investable wealth to various assets, especially financial assets, repeatedly over time, in such a way as to optimize some criterion. And the most common method they use to figure that out is the Kelly criterion. Parameters: win_p : float, probability of winning. Debates. The Kelly strategy is based on the Kelly Criterion (Kelly Jr, 1956) and has been used in, for example, Wheatcroft (2020) and Boshnakov et al. Both. Kelly Criterion is a simple formula that determines the bet size for the highest growth in repeated games. I remember when I first started reading about the Kelly criterion in books and essays written by Robert Hagstrom and Michael Mauboussin. Click on the “Calculate” button to calculate the recommended % of bankroll and stake based on the Kelly criterion formula. 8=B. The same principle would work for any investment with an expectation of being profitable. 00) and should not include any additional symbols such. scientific gambling method ), is an effective strategy in every sense of the word. However, this probability depends on how often we play this game. 16 % of your bankroll. The formula is therefore suggesting that 20% of the portfolio be stake 20% of your bankroll. This is important, since in the latter case. 01. Kelly's Criterion. Abstract. we choose our bet size so that our expected rate of capital growth is maximized. Optimal Bet Size Using Kelly Criterion TLDR: When placing a wager, choosing a bet size is as important as an edge. Full Kelly has an interesting property: there is an X% chance of your bankroll dropping to X% of what you started with 5. Thus: f = ( (1 × 0. “Fortune’s Formula” is the Kelly Criterion from J. Up to $1,000 on Caesars. e. Focusing, like Kelly, on simple intuitive versions of the expected log criteria, he suggested that it had superior long run properties. Here’s. Appreciation of the compelling properties of the Kelly criterion may have been impeded by certain misunderstandings about it that persist in the literature of mathematical economics. According to the Kelly criterion your optimal bet is about 5. 탐욕의 공식이란 별명이 있다. FC Nantes. Kelly's criterion whereFigure 9 explains the portfolio optimization based on Kelly criterion. Enter the probability (%), which represents the likelihood of winning the bet. Use fractional Kelly. With sports betting, however, you may feel the probability of an outcome is 50%, but you do not know that with certainty. Add the odds quoted by the. They Kelly criterion is a formula used to determine how much of your money to place on a particular gamble. The goal was to figure out the best ways to manage signal-noise issues in long-distance telephone. The optimal Kelly bet is 97. Residents in have been able to bet on sports betting legally since Jan. 17. Arsenal are listed. Disclaimer Kelly Criterion Calculator is a tool for finding the optimal investment size to maximize profits on repeated investments. Essentially this method takes into account both the probability of a given team or player winning and the value of the odds offered in relation to that probability. Even if you have a model, the model is still an estimation and is not as accurate as these known outcomes. The criterion was introduced with the purpose of. After all the analysis is done, you still have to decide how much capital to deploy for the idea. The Kelly Criterion is a mathematical formula that helps gamblers determine optimal bet sizes and maximize profits. L2. The purpose of the Kelly criterion in investing is to see how much money you should put into a single trade. After doing our research, we feel that Arsenal have a 70% chance of winning (that is our perceived probability), so let’s put the odds and our probability into the Kelly Bet formula. Paul Samuelson, considered by many to be the greatest economist of the 20th century, believed the Kelly Criterion was wrong. The idea was derived from an American scientist John L. b = the decimal odds: 1. Jets vs Bills Over/Under Records: Jets Over 3-6, Bills 3-7. At its core, this accurate prediction site operates as a tipster competition site, where sports enthusiasts and experts alike can share their predictions and compete for recognition. Paul Samuelson, considered by many to be the greatest economist of the 20th century, believed the Kelly Criterion was wrong. 19 = 141. ple and correct procedure to apply the Kelly strategy for the general case. RoR can be calculated using the formula: Here’s an example: Suppose I have a $10000 account and I decide to risk 30% of it. CURRENT BALANCE: Insert your current betting balance BOOKMAKER ODDS: The odds you want to back YOUR ESTIMATE (%): Your estimated probability of the selection winning FRACTIONAL KELLY BETTING (FKB): Choose between 0. 28% on each bet. win/lose). The better a player's chances of winning based on the card count, the more the player bets. - Select between different types of odds. Winning Probability : Enter the probability of earning a profit from investment. The left-hand side of the equation, f*, is the percentage of our total wealth that we should put at risk. Last updated: 2022-08-27T07:09:31. What is the Kelly Criterion and how is it calculated? How does the Kelly Criterion maximise value and minimise risk? READ CHAPTER. World Series Odds 2024. We relate these results to population genetics, and discuss testable consequences of these findings. Thus portfolio 6 is created using kelly criterion and the weights are allocated using “cvxpy” function Footnote 11 in Python. R = Historical Average Win/Loss ratio. Thorp UNIVERSITY OF CALIFORNIA AT IRVINE I. Your stake sizes will adjust as you are using the kelly criterion, so a 7. Explore math with our beautiful, free online graphing calculator. That makes his company, which collates data from sporting events. This removes much of the legwork needed to create your tabs and internal. Florida sports betting is legal again. 12 Aggies moved up in the rankings on. Why we like bet365: A wide variety of betting markets and great sportsbook bonus offers. The first credit allocation system is the adaptive Kelly strategy (‘Kelly Strategy’). It was found that the formula, which has a gambling background and helps to determine the optimal bet size, can also help with finding the ideal investment size. Jets vs Bills ATS Records: Jets 4-4-1, Bills 3-7-0. The Kelly criterion was created by researcher John Kelly in 1956 as a means of analyzing long-distance telephone signal noise. The Kelly Criterion is a mathematical formula that helps gamblers determine optimal bet sizes and maximize profits. 5. Tim Byrnes, Tristan Barnett. Since the result we have ultimately got is negative, this should indicate that it would be a better idea if we abstain from making such a stake simply because the odds are not high enough to compensate for. e the value available) and the size of your bankroll, so as to minimise risk and. 켈리는 벨 연구소에서 근무하던 연구원이었는데, 어떤 전송 채널이 가질 수 있는 최대 속도를 연구하다가 이 결과를 내놓았다. Introduction The Kelly (-Breiman-Bernoulli-Latanι or capital growth) criterion is to maximize the expected value E log X of the logarithm of the random variable X, representing wealth. Enter the odds, which represent the potential payout for winning the bet. This means that the optimal size of your bet is 10% of your bankroll. Maybe we’d rather not have optimal growth. As of Tuesday morning, the Hard Rock Bet app had begun accepting deposits and wagers from existing customers. Kelly Criterion • Developed by John Kelly, a physicist at Bell Labs – 1956 paper “A New Interpretation of Information Rate” published in the Bell System Technical Journal •. Maybe we’d rather not have optimal growth. 39 - 5. So which is the most OPTIMAL bet to make , that grows your bankroll the. 50%. The Kelly Criterion: Comparison with Expected Values. k. Kelly Criterion gambling is especially popular in. CRITERION definition: 1. Dr. By Paul Butler – January 27, 2019. – Legal sports betting has resumed in Florida. BetMGM Sportsbook and Caesars Sportsbook both have Pep Guardiola’s side listed at +140, as of Friday. In other words, the Kelly Criterion takes into account both the size of your advantage (I. The Kelly Criterion We’ll be experimenting with the Kelly criterion formula for a practical example. So your bank roll should just be as large as however much money you have and are willing to bet on sportsbetting. 01. A 50% chance of a 50% drawdown is a lot to stomach. 5 – 6 pts spread diff = 1. 52. It’s mathematically possible using the Kelly criterion. Southampton have managed to win 3 consecutive games in Championship. . In The Kelly Capital Growth Investment Criterion, he explains how traders can apply this formula to the financial markets. Based on the Kelly criterion, K% = (1 × 0. 00 being returned. e. 2nd Chance Bet up to $250. Chat What's the optimal stake size for sports betting? How is it calculated? The answer is the Kelly Criterion and we show you to apply it to your betting. Kelly Jr. Kelly-kriteriet är ofta ett hett debattämne bland spelare. 1 2-1. The worksheet tracks your bets and provides in-depth performance data as well as a profit graph. The Kelly Criterion was the subject of an incomprehensibly bitter argument in the 1970s/1980s. The Kelly Criterion tells us that we should borrow more to keep the same leverage factor of 5. Kelly % = trading capital to use in one trade. He gives lectures to various institutions including The World Bank, Carnegie Mellon, and billion-dollar hedge funds. B = the Decimal odds -1 P = the probability of success Q = the probability of failure (i. So, if your bankroll was $500 you would bet $100 in this scenario. However, with two plus-money player props, you should get an excellent number to bet on, no matter what. Suppose we have initial capital X 0 and we want to determine the optimal betting fraction f to invest each year in S&P 500 stocks. Graph functions, plot points, visualize algebraic equations, add sliders, animate graphs, and more. Kelly Criterion. Kelly Criterion Bet Calculator: Optimizing Bet Sizes. Before making your Arizona vs. concerned with maximizing their wealth, using the Kelly criterion when sizing their portfolio positions makes perfect sense. For short straddles and strangles, I imagine you would use the probability of the price remaining between the two strikes until expiration. a standard by which you judge, decide about, or deal with something: 2. 1 – 1. The Kelly Criterion, in particular, calculates the optimal bet size based on the bettor’s edge and the odds offered by the bookmaker. Projects. It’s hard to top the offers from Bet365, which has multiple promotions right now via Bet365 bonus code GTODAYVA. Put differently, the Kelly Criterion helps investors balance the trade off between maximizing their long-run expected value while also minimizing the chance that they ever go bust. edge2 edge2+σ2 = σ2 market σ2 market+σ2. We propose an evolutionary framework for optimal portfolio growth theory in which investors subject to environmental pressures allocate their wealth between two assets. The initial relative wealth plays a critical role in determining the deviation of optimal behavior from the Kelly criterion regardless of whether the investor is myopic across a single time period or maximizing wealth over an infinite horizon. 100 betting units ($5000) is nowhere near enough to avoid ruin!f * is the fraction of the current bankroll to wager, i. In his post on the Kelly criterion, Zvi notes that full Kelly is only correct if you know your edge and can handle the swings. Other highlights. As mentioned earlier, the Kelly Criterion is a variable after the probability and odds variables, and when this variable is expressed in the form of the index. 50 x 0. While the Kelly Criterion calculator defaults the multiplier to 1, you’re encouraged to adjust the multiplier based on your preferences. 2. In the stock market, money is invested in securities that have high expected return [3]. , pn p n. The Kelly Criterion is a formula used to bet a preset fraction of an account. That means 55 (the percentage probability you think your bet will win). how much to bet. I have a coin that lands heads 60% of the time and tails 40% of the time. The progressive parlay allows customers to build a parlay from between three and nine separate wagers (or “legs”), with chances to win even if some of those legs fail to win. An earlier 1984 paper is here. Strategy): def __init__. 38 percent Kelly bet, or $53 of your current bankroll ($1,220 x 4. And the most common method they use to figure that out is the Kelly criterion. It is also helpful for gamblers as it determined the maximum amount. We develop a general framework for applying the Kelly criterion to the stock market. 2nd Chance Bet up to $250. The Kelly criterion makes some assumptions about the statistical nature of returns, which do not often hold true in financial markets, so traders are often conservative when it comes to the implementation. significant leverage) or more for a position. The kelly criterion is a theory that measures the long-term growth of capital. The Kelly Criterion is a formula which accepts known probabilities and payoffs as inputs and outputs the proportion of total wealth to bet in order to achieve the. Where . So, I've built a simulation based model for betting NBA Games and I have a roughly 54% win rate across 5 seasons of backtesting. This book is the definitive treatment of "Fortune's Formula," also described as "The Kelly Criterion", used by gamblers and investors alike to determine the optimal size of a series of bets. A watchlist - to build up a wide selection of trades before you actually trade them. g. How to Use the Kelly Criterion Calculator. However, unlike in the previous situation we examined the Kelly Criterion for, there is not a nite number of outcomes of a bet on a security, so, we will useCRITERION meaning: 1. PinnacleKelly applied to Option Investing While stock investments are more free-form, many option investments have common ground with gambles: • fixed terms • a definite time horizon • a payoff settlement at expiration Hence with the proper statistics, we can use the Kelly criterion to determine optimal investment levels whileThe simplified Kelly Criterion has some potential flaws and can give some head-scratching results which are explained in the article above. For standard Kelly betting, set the fractional Kelly betting value to 1. Therefore, the optimum position size recommended by the Kelly formula would be, the $20,000 equity multiplied by 49%. 1 chance of winning - kelly around 0. For example, in the game we're playing, when you put up equal amounts of money, you want to bet (2p-1) of your bankroll, where p is your chance of winning (here, 55%. I like to break up the Kelly chart into four sections: Yellow: from Zero to 1/2 Kelly is the Conservative risk area. The Kelly criterion, which was first introduced by John R. Return to the derivation of the Kelly criterion: Suppose you have n n outcomes, which happen with probabilities p1 p 1, p2 p 2,. Hence, according to the Kelly Criterion, eventually, we will get -0. P – the probability of winning in decimal form. In probability theory, the Kelly criterion (or Kelly strategy or Kelly bet), is a formula for sizing a bet. Adjust your Kelly fraction by your posterior uncertainty. Over a 24-month period, with probability 0. Bettors can also modify the Kelly formula to suit their needs and tolerance to risk. Our two NBA PrizePicks give us a 3x payout if both bets win. In light of the deficiencies of standard supervised learning techniques, new loss functions and training methods would need to be explored for position sizing – accounting for trade-offs between risk and reward. This guide explains how the Kelly Criterion works and why it’s so good for sports betting. 6, and its probability of losing is 0. Kelly Criterion seems like a guarantee of financial success. The Kelly Criterion is a mathematical formula used to determine the optimal amount to bet based on the edge you have over the sportsbook. The Kelly Criterion maximizes your profit while eliminating your risk of ruin. Create Your Trading Algorithm in 15 Minutes (FREE) Dec 16, 2020. 488 or rounded up, 49%. The role of Kelly value in game result prediction. It is widely applied to sports betting and casino gambling. Disclosure. The win probability (P) is calculated as the. 02 # b aboveprob_win = 0. The Kelly Criterion is a mathematical formula that helps gamblers determine optimal bet sizes and maximize profits. 62 Using this model you win nearly the same amount as kelly criterion. L. Hence, the problem is one of. 40) / 1 = 0. The advent of legalized sports wagering shifted his focus to this exciting new industry in 2018. The Kelly Criterion Calculator helps you decide what percentage of your bankroll to place on a group of sports bets. a standard by which you judge, decide about, or deal with something: 2. Winning Probability : Enter the probability of earning a profit from investment. And not just wrong but SO WRONG that anyone who believed it was an idiot. Max Wright, Chief Commercial Officer of IMG Arena, agrees. The multiplier is normally set to 50%, for an aggressive betting strategy set it to 100%. This guide will cover. It’s hard to glean much from wins against those. Betting half the Kelly amount, for example. The criterion is known to economists and financial theorists by names such as the “geometric mean maximizing portfolio strategy”, maximizing logarithmic utility, the growth-optimal strategy, the capital growth criterion, etc. The classic gambler thought to maximize expected value of wealth, which meant she What is Kelly's Formula. Generally, the Kelly criterion is a formula that maximizes the expected value of the logarithm of wealth that is equivalent to maximizing the expected long-term growth rate. Putting these values into the Kelly formula gives a Kelly percentage of 20%. g. Odds betting tool that uses the Kelly Criterion FormulaCan be any positive number. In this paper, we summarize Kelly’s criterion for determining the fraction of capital to wager in a gamble. 6°. The October handle surpasses the prior Louisiana monthly handle record of $282. NC State is higher in the ACC standings due to their 5-2 conference record, but with UNC at 4-3 in the. In particular our account equity is 126,050 USD on a portfolio of 526,050, which means that the current leverage factor is 4. The formula is as follows: Kelly Formula . In one sense it is widely known: the basic "i. Converting your trading idea into an algorithm is the first step towards reaping the benefits of automated trading. So, you first need to determine your bankroll size and the. I therefore recommend using the more sophisticated generalised Kelly Criterion wherever possible as it is superior to the simplified Kelly Criterion. 77 = $91. In this case we bet about 9% of our money on each bet (slightly more for the higher implied. Up to $1,000 in Bonus Bets. q is the probability of losing, which is 1 − p. Buy now. Kelly Criterion • Developed by John Kelly, a physicist at Bell Labs – 1956 paper “A New Interpretation of Information Rate” published in the Bell System Technical Journal • Original title “Information Theory and Gambling” – Used Information Theory to show how a gambler with inside information should bet Our dutching calculator allows you to enter a total stake amount (that is the total amount you would like to invest into this particular bet overall) and enter the odds for each bet you would like to get on. In previous work, researchers and investors usually use Kelly’s criterion to manage funds [8, 9]. Kelly criterion with more than two outcomes. My RoR is thus 0. On the other hand it is arguably. 5 if you want to wager 50% of the stake recommended by the Kelly. 80 the investment at least doubles, with 0. Kansas Jayhawks (2-0, 2-0 ATS) So far, Kansas has been as good as advertised, blowing out both NC Central and Manhattan by well over 30 points. That being said, applying full Kelly bet sizes can still be risky. 70% of 1 = 0. Kelly drew a connection to Shannon’s information theory to solve for the bet that is. We have a tremendous NFL Thanksgiving slate of games, giving bettors plenty of opportunities to place a bet on the action, including the best NFL anytime touchdown scorer props for this season’s. The Kelly criterion is a famous mathematical formula that attempts to maximize your long-term capital growth. 20. You might also enjoy. It can seem counterintuitive in real time. A simplified definition would describe this method. Additionally, when you make another bet on college basketball today, Caesars also gives a 50% profit. It is based on the mathematical formula k percent = bp–q/b, where p and q represent the probabilities of winning and losing, respectively, and. Written By: Cole Rush. Kelly Criterion Bet Calculator: Optimizing Bet Sizes. 48Theoretically, however, the Kelly Criterion could go much higher than 100% and be calling for 200%, 300%, 500% allocation (i. 99 chance of winning (say this is a corporate bond) -- kelly around 0. However, unlike in the previous situation we examined the Kelly Criterion for, there is not a nite number of outcomes of a bet on a security, so, we will useWe’ll be experimenting with the Kelly criterion formula for a practical example. Up to $1,000 in Bonus Bets. 067 or 6. In relation to sports betting, it’s. As you can see, the bet size will grow relative to your win probabilities and the odds. If the expection is not positive, then f∗ ≤ 0 f ∗ ≤ 0 and the optimal amount to bet is to not (obviously). Many well known investors use it, including Warren Buffett and Bill Gross. 70. The original Kelly criterion provides a strategy to maximize the long-term growth of winnings in a sequence of simple Bernoulli bets with an edge, that is, when the expected return on each bet is positive. b = the decimal odds: 1. Kelly Criterion gambling is especially popular in sports betting and can potentially help you become a successful bettor. The first credit allocation system is the adaptive Kelly strategy (‘Kelly Strategy’). 00, with a winning probability of 0. in 1956. 6 Profit = 1 Loss = 1 #Betting percentage for the differnet scenarios a = kelly (PercentageOfOdds,Profit,Loss) b = a/2 # Half Kelly c = a*2 # Double Kelly # Creating the monte carlo simulation with the for statements Saving all results in a list before changing. Orange: 1/2 Kelly to 1 Kelly is the Aggressive risk area. Step - 3: For each possible outcome, calculate the ending bankroll for that outcome (starting bankroll plus all wins minus all losses). Usually 1/4, 1/6, or 1/8 until you are in the range where you are betting . 55)-0. In such a case, the Kelly criterion suggests that if one were to go over 20% repeatedly on a low.