Tuesday, February 4, 2014

Using Kelly’s criterion in Horse Playing Effectively


John Kelly, who worked at AT&T's Bell Laboratory, originally developed the Kelly Criterion to assist AT&T with its long distance telephone signal noise issues. Soon after the method was published as "A New Interpretation of Information Rate", however, the gambling community got wind of it and realized its potential as an optimal betting system in horse racing. It enabled gamblers to maximize the size of their bankroll over the long term. Today, many people use it as a general money management system for not only gambling but also investing.

f=(bp-q)/b

where f is Kelly’s % = fraction of capital for the day to bet on horse
b= net odds
p= % chance of horse winning
q= % chance of horse losing

Say you are fancying a horse which has a 40% chance of winning (p) odds offered are 5/1 (b) then the horse have 60% chance of losing (q) and above all you are with a day’s capital of Rs 10,000

then

f = (5*40-60)/5
= 28%
so you have to bet your fancy 28% of your days capital ie Rs 2,800 you are going to win 14000 if your fancy oblige.

Money management cannot ensure that you always make spectacular returns, but it can help you limit your losses and maximize your gains through efficient money management. The Kelly Criterion is one of many models that can be used to help you manage your monies efficiently.

5 comments:

  1. Dear Mr.Suresh,
    your selections are really great.
    in my opinion pl stop giving selections for MUMBAI.
    take some time for this center and start.
    Kind regards,
    Hyderabad punter.

    ReplyDelete
  2. Sir, no need to stop mumbai selections. Even though i m newcomer to racing ur mumbai selections gave me confident on u. So, please dont listen to any discourage words. Keep doing well.

    Sunilram76

    ReplyDelete
  3. learn aerospace commutation analysis to pick correct winner.

    ReplyDelete
    Replies
    1. Pl.let us know about it or any book that teaches the method.OTHERWISE YOU PLEASE WRITE IT IN DETAIL.Thank you

      Delete
  4. sir,i follow your selections regularly.today when i opened your blog around 10.30 a.m. only two races selections came.kindly intimate at what time your selections will apppear in full in your blog please.

    ReplyDelete

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