
October 19th, 2011, 03:45 AM


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Join Date: Feb 2007
Posts: 2,267


Kelly Betting & Unsure Advantage
Given with Kelly resize betting:
Betting over double Kelly bankroll shrinks.
Betting double Kelly bankroll fluctuates with no long term growth
Betting 1.5 Kelly vs .5 Kelly both have the same growth rate, with 1.5 Kelly having much more variance.
So betting under Kelly is always preferred to betting over Kelly.
So one is facing a game/investment where they are unsure of the advantage or variance. Perhaps even a new player to a known game like blackjack with card counting, but are unsure of their skill or the validity of card counting. What should one do? Perhaps bet from 1/4 to 1/8 Kelly resizing* to protect the bank from errors in estimating advantage. As samples from playing come in if one is winning it is a weak confirmation that one does have an advantage and can bet more. If one is losing they bet less until wins proves a winning strategy.
In brief:
Underbetting; even by a large margin, is preferred to overbetting. However, its your money to bet as you want.
*For the aspiring or even established pro 1/4 Kelly resizing is quite conservative for blackjack with 1/6 to 1/8 Kelly being used for the unsure game.

October 19th, 2011, 01:58 PM


Executive Member


Join Date: Apr 2006
Posts: 5,141


gambling jargon
help me out here if yah can
i know my expected value...
EV = $29
&
i know that in my quest to win the bets involved that i'm going to succeed 69% of the time
how would i use the calculator in this link?
http://www.albionresearch.com/kelly/default.php
..........
i can't figure out what odd's to enter in the odd's offered field...
would it be 30:1 since my ev is $29?
errhh i'd be right to set up the estimate of probability of winning field as 69%, right?

October 19th, 2011, 03:25 PM


Executive Member


Join Date: Feb 2007
Posts: 2,267


dont hold me to anything
I don't write the books I read them.
The calculator is cool but simple. There is no field for variance & you dont know the variance of your game? So its about worthless.
We can probably figure this from your results. The losses you have faced are probably not the largest losses you will face.
The payoff field is what you get back on a wager, BJ is mostly 1 to 1 as an example.
Your sample size is still to small to say much. What is the variance if someone plays 100 hands of bj but wins 70 hands? According to your calculator a 40% advantage. Seems the greatest game ever, but we know BJ is not that good consistently.
This might help us. Someone has figured out on their own card counting except they don't know the variance of the game. We know to account for variance, that instead of betting $100 we should bet approx $70. They bet $100. What is their fate? If they bet Kelly resizing they are overbetting about 50%. Their bank will grow but with a lot of unnecessary variance. The variance will be so high they may lose confidence or have the bank lose a crushing amount. They would have been better off to have bet .5 Kelly, which would have offered the same growth rate.
So perhaps use the calculator and bet 1/4 to 1/8 Kelly. How does the variance feel? Are you getting paid or white knuckled waiting for multiple wins?
Underbetting is far preferred to overbetting.

October 19th, 2011, 03:48 PM


Executive Member


Join Date: Apr 2006
Posts: 5,141


oky dokey.....so.......
Quote:
Originally Posted by blackjack avenger
I don't write the books I read them.
The calculator is cool but simple. There is no field for variance & you dont know the variance of your game? So its about worthless.
We can probably figure this from your results. The losses you have faced are probably not the largest losses you will face.
The payoff field is what you get back on a wager, BJ is mostly 1 to 1 as an example.
Your sample size is still to small to say much. What is the variance if someone plays 100 hands of bj but wins 70 hands? According to your calculator a 40% advantage. Seems the greatest game ever, but we know BJ is not that good consistently.
This might help us. Someone has figured out on their own card counting except they don't know the variance of the game. We know to account for variance, that instead of betting $100 we should bet approx $70. They bet $100. What is their fate? If they bet Kelly resizing they are overbetting about 50%. Their bank will grow but with a lot of unnecessary variance. The variance will be so high they may lose confidence or have the bank lose a crushing amount. They would have been better off to have bet .5 Kelly, which would have offered the same growth rate.
So perhaps use the calculator and bet 1/4 to 1/8 Kelly. How does the variance feel? Are you getting paid or white knuckled waiting for multiple wins?
Underbetting is far preferred to overbetting.

k, so that calculator is about worthless, lol ......
i'll read the rest of your response more carefully, later, lol
so but ok, more numbers help maybe?
say i have $3000 for a roll, don't laugh, dammitt
say i know my worst case day would be losing $1,071.12 (very unlikely but could happen edit: on a really, really bad day)
say i know my daily EV is $65.83
say i'm not sure but best i can tell at this point one standard deviation is circa $256.27 (edit: hey, interesting four standard deviations would be $256.27 * 4 = $1,025.08 , pretty close to that worst case day number above)
can we surmise anything from that info?
could i use QFIT's calculators with this info?
edit: meh, see image below where i tried it........ not sure if what i tried is legit...
errh what i did was 'fudged' and imaginined a days play was like one hundred hands.... sorta thing.
oh, and i put a 69 for confidence probability since i'm relatively sure that my success rate with respect to this whole scheme is 69%
Last edited by sagefr0g; October 19th, 2011 at 06:43 PM.

October 20th, 2011, 05:20 AM


Executive Member


Join Date: Feb 2007
Posts: 2,267


little confidence in confidence
Think your considering confidence different then Qfit. I think your considering winning 69 out of 100 hands? Think he is considering confidence of results.
Are you basing win rate & standard deviation on your results? Isn't this very weak information?
Given, if the info in the 2nd chart is correct; ror could be worse, a 21% ror is high if fixed or resizing bets, unless you can add to bank?
Think your ahead? If you can cut stakes your chances of overall success would go up greatly as far as ror and the chances of keeping winnings.
Last edited by blackjack avenger; October 20th, 2011 at 05:26 AM.

October 20th, 2011, 11:40 AM


Executive Member


Join Date: Apr 2006
Posts: 5,141


Quote:
Originally Posted by blackjack avenger
Think your considering confidence different then Qfit. I think your considering winning 69 out of 100 hands? Think he is considering confidence of results.

i think yer right, i believe i was misinterpreting the concept of confidence for Qfit's calculator and confusing it with a certain success level of this game.
i went ahead and used 86.5 for a confidence level on some new calculations (see below). i think that's the appropriate number, forget why though, lol.
Quote:
Are you basing win rate & standard deviation on your results? Isn't this very weak information?

standard deviation, yes, that's the best i can do. so yes, weak.
win rate, no, it's based on valid knowledge assuming one simple numeric assumption is correct, lol. so i guess not so weak, lol.
edit: hmmm, so being as SD is weak, could be interesting to do some 'what if's' with the SD numbers in the calculators, no?
Quote:
Given, if the info in the 2nd chart is correct; ror could be worse, a 21% ror is high if fixed or resizing bets, unless you can add to bank?

errh ok, but correct me if i'm wrong, isn't the chart reflecting a 0.21% ROR?
well anyway pretty much it's fixed bets.
i worked up some new numbers with Qfit's calculators below.
Quote:
Think your ahead? If you can cut stakes your chances of overall success would go up greatly as far as ror and the chances of keeping winnings.

yep ahead, errrhhh at least ahead, loanwise, lol. bank is nearly trippled. (edit: amount ahead does agree with EV)
but unfortunately there isn't a real lot of wiggle room for cutting stakes.
perhaps some........
but anyway, far as using Qfit's calculators, makes a bit for lacking in confidence as well, maybe, no?
i mean, weren't they set up essentially with blackjack in mind? and this a'int blackjack we're talkin bout here. seems i read, how certain assumptions regarding Kelly theory and the nature of blackjack ie. (it's not even money payoffs, not necessarily flat betting, & there is splitting and doubling involved sorta stuff) were made so as to get Kelly to work better with blackjack, no?
Last edited by sagefr0g; October 20th, 2011 at 01:39 PM.

October 21st, 2011, 08:35 AM


Executive Member


Join Date: Feb 2007
Posts: 2,267


its a mess
If your confident of advantage, then tweaking SD may give some insight.
Yeah, the calculators are for fixes bets.
Yeah, Kelly I believe works best/assumes small bets & even money payoffs. We can adjust it for other games
Does your game resemble VP? Perhaps those calculators?
If you have tripled bank through just play then your probably fine at current stakes moving forward. Especially if you never suffered a large loss.
Your winning? Most important measure.

October 21st, 2011, 12:24 PM


Executive Member


Join Date: Apr 2006
Posts: 5,141


Quote:
Originally Posted by blackjack avenger
If your confident of advantage, then tweaking SD may give some insight.
Yeah, the calculators are for fixes bets.
Yeah, Kelly I believe works best/assumes small bets & even money payoffs. We can adjust it for other games
Does your game resemble VP? Perhaps those calculators?
If you have tripled bank through just play then your probably fine at current stakes moving forward. Especially if you never suffered a large loss.
Your winning? Most important measure.

meh, doesn't really resemble VP.
largest loss suffered so far $518
largest possible loss $1,071.12 ...very unlikely
but far as tripling the bank, errhh i left something out, there is another similar game involved that has less volatility, albeit a 'weakly' known SD as well, lol.
i guess i could read up in Bj Attack by Schlesinger and try and see if Qfit's calculators are only appropriate for blackjack, no?

October 21st, 2011, 07:17 PM


Executive Member


Join Date: Feb 2007
Posts: 2,267


the swamp so far
You know your EV with reasonable certainty
Have an idea of SD
You have tripled bank?
Your ror is now; including bank growth?, 21% for flat bets.
The game offers little room to adjust bets up & down
Qfit calculators can cover more then BJ, if you know the fields. I think there would be concers involving games with large uneven payouts, they are not used for VP as an example as far as I know.
Can't find a nice little game of BJ?

October 22nd, 2011, 04:57 AM


Executive Member


Join Date: Apr 2006
Posts: 5,141


Quote:
Originally Posted by blackjack avenger
You know your EV with reasonable certainty

yes
yes
almost, but another game is in the mix as well, with higher EV & lower SD albeit weakly known SD.
Quote:
Your ror is now; including bank growth?, 21% for flat bets

.
errhh no not including bank growth, but from an original $3,000 bank, but come on bja, that ( http://www.blackjackinfo.com/bb/atta...1&d=1319059079) says 0.21%, no?
Quote:
The game offers little room to adjust bets up & down

meh, it could be done, but probably best stay the same level.
Quote:
Qfit calculators can cover more then BJ, if you know the fields. I think there would be concers involving games with large uneven payouts, they are not used for VP as an example as far as I know.

hmm, kind of what i was concerned about, although it's not VP, errhhh any other kind of way to calculate ror, ect. with other formulas, references, sources, for games with large uneven payouts ?
Quote:
Can't find a nice little game of BJ?

meh, bj ==>>
Last edited by sagefr0g; October 22nd, 2011 at 05:01 AM.

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