The Kelly Criteria
Kelly Strategy :The Kelly criterion was developed in 1956 by John L. Kelly. It's 'a method which is based on raise the money in the long term through a mathematical formula. For funds is the money that we have since decided to bet (eg: 1000 €). In practice we try to mathematically determine the correct amount to bet per share if we think that a share is underestimated.
Formula: (Odds * Probability - 1)/(Odds - 1)
where the odd is chosen by the bookmakers and the probability is decided by us. Obviously each share corresponds to a probability. This will be decided by us and our ability to predict.
Multiply the result x 100, we'll find the percentage of our fund to bet.
For example:
Funds: 1000€
Odds: 5,00
Probability: 0,25 (25%) (
this is the probability we assigned)
(5,00 x 0,25 - 1) / (5,00-1) = 0,0625X100=6.25%
This means that we should bet on the 6.25% of our fund = 1000X0.0625=62.5€
The Kelly formula is very popular among experts. Being a pretty risky bet on is convenient percentage of our fund bets not exceed 10%.
For further informations visit A Kelly Strategy Calculator
Good Luck with your bet !