Bet Adjustments

[Guynoire]

What is the best method to compound your bet, change the bet based on increases or decreases in the bankroll. I know the Kelly Criterion says you should compound your bet continuously, but that's impossible. What is a practical alternative? Every 5%, 10%, 25%?

[EasyRhino]

I change my max bet whenever a proportional change would shift one chip that I care about. Since I mainly use greens, I'll adjust my max bet any time a $25 change is justified. When I played reds, I jumped at the first opportunity to add an extra $5 to my top bet.

Unless you're betting way way above Kelly, this also generally means that you'll never have to adjust your bet spread during one session.

[Kasi]

Originally Posted by Guynoire

What is the best method to compound your bet, change the bet based on increases or decreases in the bankroll. I know the Kelly Criterion says you should compound your bet continuously, but that's impossible. What is a practical alternative? Every 5%, 10%, 25%?

No right answer and would be heavily dependent on how you are playing what game in the first place.

Just deciding the Kelly bet in the first place is already a compromise of only being able to bet in whole dollar amounts or, practically speaking, $5 increments.

So, if your betting ramp is maybe 10, 20, 30, 40, 50 and your bankroll increases 25%, I'd consider the effect of whether you will change your $10 bet to $15 or not, whether you might go to $35 or $40 instead of 30, or what your max bet might now be. Keeping in mind that it is likely your advantage is smaller at the lower TC's but they will occur more frequently.

Basing any increase on only one's max bet which occurs least frequently without regard to changing the original ramp at the TC+1 to TC+3 counts
might lead to a different ROR than you might think you are playing to.

If I did this stuff, I doubt if I'd change a thing until I at least doubled my bankroll.

Maybe real counters have better ideas.

[EasyRhino]

Yep, just to throw out another data point, I saw a post from bj21.com boards indicating there was a team that only adjusted their team bank when it dropped to half of it's initial point, and adjusted (or broke bank and distributed profits) when it doubled.

Their bank was much much bigger, and they were trying to reduce bankroll fluctuations by betting a smaller percentage of it than full Kelly... and they still had two banks in a row get chopped to 50%.

[nightspirit]

Originally Posted by Guynoire

What is the best method to compound your bet, change the bet based on increases or decreases in the bankroll. I know the Kelly Criterion says you should compound your bet continuously, but that's impossible. What is a practical alternative? Every 5%, 10%, 25%?

A good rule of thumb is to adjust your bet when your bankroll has de- or increased by 10%.

Imagine you lost half your bankroll and must start a comeback with a much smaller betsize. It takes a long time to get out of the hole...

[Kasi]

Originally Posted by nightspirit

A good rule of thumb is to adjust your bet when your bankroll has de- or increased by 10%.

Fine if u can adjust each of your bet ramps bet by the same 10%.

Otherwise, win-rate and ROR will change, I'd think.

[nightspirit]

Originally Posted by Kasi

Fine if u can adjust each of your bet ramps bet by the same 10%.

Otherwise, win-rate and ROR will change, I'd think.

Yes, thats right. If your are betting according Kelly and doesn't resize your bet your ROR will change.
As i understand it, when betting Kelly, each of your bets (of your ramp) correspondents with BR and Advantage. So lets take a $10K bankroll and full Kelly as example. When you lose 8 or 9% of your BR your ROR will go higher (but not much higher than 13.5% i think). Now when you resize your bets at 10% BR fluctation you will have the 13.5% ROR back.

It was only an example, i don't recommend betting full kelly!

[Kasi]

Originally Posted by nightspirit

As i understand it, when betting Kelly, each of your bets (of your ramp) correspondents with BR and Advantage. So lets take a $10K bankroll and full Kelly as example. When you lose 8 or 9% of your BR your ROR will go higher (but not much higher than 13.5% i think). Now when you resize your bets at 10% BR fluctation you will have the 13.5% ROR back.

A kelly bet is not just %advantage times total bankroll in case that's what u thought it was. Don't forget to divide by the variance.

But all I meant was it may be a little hard to change your $20 bet to $18 or your $5 bet to $4.50, while changing your $50 bet to $45 may just be practical, etc and that, since overall it may be impractical, be careful of the effect of not changing all your bets by the same amount.