I made a 'game' to help me son get some intuition for bet sizing: https://tools.encona.com/investor
Kelly Criterion Simulator
11–20 of 33 posts
Re: Kelly Criterion Simulator
#12What bet you can make consistently gives you at least 51% odds? As far as I know, the best you can do in a casino is 48%. If I plug 48% into the simulation, it states there is no Kelly edge for that bet.
Bets with a positive edge can be found most commonly via sports betting, poker games, and the stock market. Although note that most bets you can find via such methods do not have a positive edge, and the edge is not labelled. More generally, look for any area where bets can be made, and professionals exist who make their living winning such bets. There are professional poker players and sports gamblers; there are not…
The problem with sports betting is that if you really want an edge (at least in something like soccer) you could easily end up dropping six figures a year on data licenses to have a decent model and be able to find worthwhile bets across all competitions. That puts a lot of pressure on the amount of capital you need to deploy, which rules out a lot of bookmakers. As you graduate to markets with more liquidity (i.e. Asia) you’ll also find your edge shrinking. Still obviously very doable, but it’s hard to guarantee stress free passive income this way.
Re: Kelly Criterion Simulator
#13This woulda been helpful for Leo and the 3% of Korea that got liquidated
Re: Kelly Criterion Simulator
#14Graph needs a log scale
Re: Kelly Criterion Simulator
#15Kelly is nice if you know the odds.
Re: Kelly Criterion Simulator
#16In case the author is here:
What's the difference between "win probability of win" and "odds", please? The seem the same thing to me.
And also, what are "decimal" vs. "american" odds, please?
Thanks.
Re: Kelly Criterion Simulator
#17Interesting, I recently learned about this. So there is a term called "Full Kelly" which is were you actually wager the amount given by the formula. This is pretty aggressive and not for the faint of heart. Usually, you do something like a "half Kelly" where you halve the suggested bet amount. Usually because you assume you might be incorrect in your estimated advantage. What I haven't found yet is some mental math r…
Re: Kelly Criterion Simulator
#18This woulda been helpful for Leo and the 3% of Korea that got liquidated
Their estimates: Win probability 100% -- Odds / payout 100-1.
Re: Kelly Criterion Simulator
#19In case the author is here: What's the difference between "win probability of win" and "odds", please? The seem the same thing to me. And also, what are "decimal" vs. "american" odds, please? Thanks.
‘Odds’ is the payout, the price of the bet, the prize you may win. And the ‘win probability’ is the probability of winning as the name suggests.
Re: Kelly Criterion Simulator
#20This woulda been helpful for Leo and the 3% of Korea that got liquidated
The Situational Awareness situation was the reason I wanted people to be aware of the Kelly Criterion and submitted this link.