Suitable ROR levels

M

matt21

Well-Known Member
hi everyone - i did a search on ROR and read through some of the relevant threads but could not find what i was looking for.

i am interested to know what counters would typically aim for in the ROR figure. I believe i am currently playing with ROR in the region of 4-5% and am using approx 0.5 Kelly to set my betting schedule.

Do others also play with ROR in the range? Or higher? Or lower?

Thanks in advance for any comments!!

Matt
 
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I play with a lower RoR, but it’s a personal decision. There is no right or wrong answer here. You should play with whatever level of risk you are comfortable with. Everyone’s opinion will be a little different.

-Sonny-
 
I think it also has a good deal to do with whether your BR is replenishable or not. Mine isn't so I play with a very very low RoR.
 
One is Not the Other

matt21 said:
hi everyone - i did a search on ROR and read through some of the relevant threads but could not find what i was looking for.

i am interested to know what counters would typically aim for in the ROR figure. I believe i am currently playing with ROR in the region of 4-5% and am using approx 0.5 Kelly to set my betting schedule.

Do others also play with ROR in the range? Or higher? Or lower?

Thanks in advance for any comments!!

Matt
Click to expand...

If you set your bets to .5 kelly; assuming fixed bets?, that is an ror of 1.83%. Which is fine.
 
Sonny said:
I play with a lower RoR, but it’s a personal decision. There is no right or wrong answer here. You should play with whatever level of risk you are comfortable with. Everyone’s opinion will be a little different.

-Sonny-
Click to expand...

Exactly. You have to consider what it will mean to you as an individual if you lose that money. That's the only role for emotions in AP.
 
Sonny said:
There is no right or wrong answer here. You should play with whatever level of risk you are comfortable with. Everyone’s opinion will be a little different.
Click to expand...

Especially people who play with different purposes! :grin:

I don't play with any real long-term goal. It's simply something that's fun to do for a few hours while my lazy-ass friends are sleeping the mornings away on our Vegas trips. My bankroll is virtually inconsequential to my long-term financial health (I lost about 10x my bankroll in the last 2 months of stock market decline :flame: and even that wasn't crippling, as I have plenty of liquid assets to ride out stock market variance).

With those warnings, I played with a 40-50% lifetime ROR when I first started. I haven't calculated my lifetime ROR recently, but it's probably still higher than 10%.
 
CONFESSION/ A Cautionary Tale or newbies.

What your level of Risk Tolerance is varies from what mine is and from what any random person's is.

R.O.R. is a very fine example of what economists and mathematicians term a "UTILITY" function.

If I am rich and my bankroll is easily replenshed I may tolerate a very high R.O.R. - perhaps as high as 20%

If I am a working stiff and/or a person who cannot tolerate (emotionally) the idea of being "broke" I would be looking for a R.O.R. that is quite low - perhaps even as low as 2%

If you have a bankroll of $5,000 and I offer to bet that if YOU flip YOUR coin and YOU call it correctly I will pay you $6,000.

You have a higghly profitable 20% advantage.

That is spectacular, but the RISK is so high [50%] that putting all of your bankroll at risk would be folly - unless it is easily replenished and you would not lose sleep if you lost.

There is more than just "advantage" to consider when betting.

The Kelly Criterion actually uses a R.O.R. of 13.5% - which is precisely why so many pros use 1/2 (or even 1/4) Kelly Betting.

Thinking about your Risk of Ruin, your e.v. plays into this but not by as much as one might think. Your bet spread is crucial. The wider the spread the greater the risk, even though the expectation will be higher. The most important factor of all is what % of your bankroll your top bet is. The tradeoff of risk vs. reward is crucial. Profits are inversely proportional to Risk in investment matters. Ergo, GREED KILLS !

Blackjack is a high variance game, meaning the Standard Deviation can be very high - resulting in perfectly "normal" situations where you can win or lose very very large sums even with a modest spread.

A Confession:

When I began to play seriously I won over 1/4 million bux in my first year, with an aggressive 25-1 spread at a fine shoe game with an expectation off-the-top of -.31.

I was so "full of myself" that I thought that I was invincible. I went to Las Vegas with a cash bankroll of more than $300,000. I found a good DD game and promptly lost $96,000. How did I do that I spread $1,000 to $10,000 and at times actually bet three hands at a time at 10K per spot. THAT was IDIOTIC. Nobody in his right mind has a Max bet of over 2% of their (total) bankroll. If your bankroll is a healthy 1,000 units a Max Bet of 20 units would be 2% So, at a $10 game that would be $200. Plenty !

If my Max Bet was 2% I could have spread as high as $6000, not multiple hands of $10,000.

In retrospect I imagine that my Risk of Ruin was well over 40% - Years later I would strive for R.O.R. well under 10%.

So, I really should have spread $500 to $3,000.

Almost needless to say NO casino will accept more than a 6-1 or 8-1 spread on a DD with good rules from even a (semi- skilled) Basic Strategy player.

My DD skills were not that powerful 25 years ago. They were very sloppy.
If they weren't sloppy they would have thrown me out, (and saved me a bundle). Aaargh!

It would be a long time before they would TRESPASS me at that well-known whale-habitat.
 
Wow - that's a lot of comments ... and so quickly! Thanks very much for all your comments. Very helpful stuff :)

BlackJack Avenger, is it possible for you to elaborate on the link between ROR and the Kelly fraction?

I also don't really understand SCORE - so I will ahve to study up on that.
 
matt21 said:
BlackJack Avenger, is it possible for you to elaborate on the link between ROR and the Kelly fraction?
Click to expand...

I apologize if you wanted to hear specifically from him, but I'll jump in.

Kelly betting and ROR don't really jive, because Kelly betting means constant resizing of your bets. The ROR for Kelly betting is theoretically zero, because as you keep losing you just bet less and less. (Practically, you need to meet table minima, so you there's a nonzero ROR, but we'll ignore that for the time being)

There's pseudo-Kelly betting, which means you size your bets periodically, but within each chunk of time, you're betting with a constant unit. This is what most people do.

A full Kelly pseudo-bettor would be equivalent to betting a 1-5 or 1-6 spread with Wonging in/out at +1 and a 200 unit bankroll.

A half-Kelly pseudo-bettor would be equivalent to betting a 1-10 spread with Wonging in/out at +2 and a 200 unit bankroll. The difference is that the units here are generally smaller.
 
The Trenches

Fixed Kelly Betting - You do not resize your bets as your win or lose

Fixed Kelly = 13.53% ror
1/2 Fixed Kelly = 1.83% ror
1/3 Fixed kelly = .24% ror
1/4 Fixed kelly = .03% ror

Say if you start at fixed kelly and you play until you double your bank. If you keep your bets the same size your ror would then become 1.83%.

As you win; increase your number of bets, your ror goes down. As you lose; decrese your number of bets, your ror goes up.


Resized Kelly (true kelly) as you win you size your bets up and as you lose you decrease your bets. In the real world it's probably best to bet less then full kelly; 1/2 to 1/4, to account for human error, high table minimums and inability to resize down to a penny.
 
FLASH1296 said:
What your level of Risk Tolerance is varies from what mine is and from what any random person's is.

R.O.R. is a very fine example of what economists and mathematicians term a "UTILITY" function.

If I am rich and my bankroll is easily replenshed I may tolerate a very high R.O.R. - perhaps as high as 20%

If I am a working stiff and/or a person who cannot tolerate (emotionally) the idea of being "broke" I would be looking for a R.O.R. that is quite low - perhaps even as low as 2%

If you have a bankroll of $5,000 and I offer to bet that if YOU flip YOUR coin and YOU call it correctly I will pay you $6,000.

You have a higghly profitable 20% advantage.

That is spectacular, but the RISK is so high [50%] that putting all of your bankroll at risk would be folly - unless it is easily replenished and you would not lose sleep if you lost.

There is more than just "advantage" to consider when betting.

The Kelly Criterion actually uses a R.O.R. of 13.5% - which is precisely why so many pros use 1/2 (or even 1/4) Kelly Betting.

Thinking about your Risk of Ruin, your e.v. plays into this but not by as much as one might think. Your bet spread is crucial. The wider the spread the greater the risk, even though the expectation will be higher. The most important factor of all is what % of your bankroll your top bet is. The tradeoff of risk vs. reward is crucial. Profits are inversely proportional to Risk in investment matters. Ergo, GREED KILLS !

Blackjack is a high variance game, meaning the Standard Deviation can be very high - resulting in perfectly "normal" situations where you can win or lose very very large sums even with a modest spread.
Click to expand...


Trying to find something I can agree with lol.

20%?

"The wider the spread the greater the risk, even though the expectation will be higher."?

"The most important factor of all is what % of your bankroll your top bet is."?

"Nobody in his right mind has a Max bet of over 2% of their (total) bankroll."?
 
matt21 said:
Wow - that's a lot of comments ... and so quickly! Thanks very much for all your comments. Very helpful stuff :)

BlackJack Avenger, is it possible for you to elaborate on the link between ROR and the Kelly fraction?

I also don't really understand SCORE - so I will ahve to study up on that.
Click to expand...

Well, you're right - I think BJ Avenger has a better handle on this stuff than i do.

Remember, chances of losing half your roll is the square root of original roll.

Half-Kelly= .1353*.1353=0.0183

Since Kelly has to with logarithmic growth, you can also use "@exp(-2/KF)" where KF = Kelly fraction to get ROR for any Kfraction.

Another aspect to consider, other than just lifetime ROR, 13.53% in a full-Kelly case, is the volatility. Like with full-Kelly, you have a 10% chance of losing 90% of original roll, 50% chance of losing 50%, etc.

Betting half-kelly, you only have a 0.1% chance of losing 90% of roll, 12.5% chance of losing half of your roll. So 100 times less chance of losing 90% of roll, 4 times less chance of losing half of your roll. By only betting half-Kelly.

Maybe I mean "90% or more", "50% or more", etc, not sure. Go with what BA says lol.

Basically, betting less than full-Kelly, is not only good for lower lifetime ROR but also smooths out the extreme edges.

I don't really know, but I'd think anybody betting full-kelly should have his head examined.
 
FLASH1296 said:
If you have a bankroll of $5,000 and I offer to bet that if YOU flip YOUR coin and YOU call it correctly I will pay you $6,000.

You have a higghly profitable 20% advantage.
Click to expand...

I get a 10% advantage, unless the coin is biased and only produces a losing results 45.45% of the time.

-Sonny-
 
FLASH1296 said:
Sorry. My computation error; not that it matters at all in this context.
Click to expand...
yeah, no and really IMHO you have a point. just to me i think it's healthy to have some skepticsm with regard to advantage play blackjack and the risk involved. the kelly stuff, the maths behind it and all is beyond me or at least beyond my willingness to pursue a full understanding of it. but the thing is as i recall when reading about kelly stuff was how remarks were made about how fitting kelly to blackjack requires some (my words) 'fudge' factors. maybe the needed assumptions were sufficient, i dunno, just it seems prudent to have some reservations on the scientific validity of it all. it's a beautiful theory and i could never argue some flaw about it, just still i'm taking it with a grain of salt since as far as i'm concerned there is still an element of uncertainty lurking in the background.
one thing i don't think it factors in is human error. if it did then i really wouldn't trust it.
just to me i wanna have some kind of back up fail safe sort of thing. the only thing i can so far think of in regards to that is what's already been put forth, that being betting fractional kelly and maybe some sort of stop loss with a contingency plan sort of thing.
 
FLASH1296 said:
Sorry. My computation error; not that it matters at all in this context.
Click to expand...

It seemed that was your whole point? Apparently this guy has a 1 unit roll and is limited to playing only 1 hand so no matter what he is paid for a win his ROR is 50%. Maybe he'd take it at some payoff point?

What would his risk be if he was allowed to play 2 flips, or 1MM flips betting 1 unit with that 10% adv?

Like you're saying, risk vs reward. Maybe even given a time limit too lol.

Still don't get some of the other stuff you said lol. Max bet at 2%, wider spread means greater risk, etc.

Like back-counting could easily exceed 2% as a max bet, spreading 1-8 or 1-16 could have same risk, etc.
 
FLASH1296 said:
If your bankroll is a healthy 1,000 units a Max Bet of 20 units would be 2% So, at a $10 game that would be $200. Plenty !
Click to expand...

ok. well my br is $1000. if i play minimum bet $10 and max bet was only $20 then i'd have a 2% RoR? plus, i am only going to play when there is TC of more than +1 that way I still have an edge with my small bets
 
well no
with a $1000 br and a $10 min bet you only have 100 units not a healthy 1000 so a max bet of 20 units for you would be 20% of your br 10x the suggested max bet
 
jaredmt said:
ok. well my br is $1000. if i play minimum bet $10 and max bet was only $20 then i'd have a 2% RoR? plus, i am only going to play when there is TC of more than +1 that way I still have an edge with my small bets
Click to expand...

If you bet optimally your RoR will be around 16% (EV=0.522, SD=7.494).

-Sonny-
 
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