Now it may seem bad to be off by a constant factor, but that is unavoidable. That's a lot of theory. The calculation will be complicated, and complicated calculations should be given to a computer.
This is kelly gambling formula same question that a business owner, investor, or wakefield casino has to ask themself: In other words, the two variables must be entered correctly, and it must be assumed that the investor is able to maintain such performance. Putting It to Use Kelly's system can be put to use by following these simple steps:. Here is an example:. If so, then how? Kelly's criterion may be generalized  on gambling on many mutually exclusive outcomes, like in horse races. First let us find the derivative:Did you know the Kelly Criterion staking method used by most bettors is only a simplified version? This article exposes the flaws in the simplified Kelly formula. The Kelly Criterion determines how much of a stake you should risk on a favorable the answer Kelly gives is to stake the fraction of your gambling or investment (Note that there is a misprint in the formula for approximating average growth. To see the Kelly formula in action, let's take an If our bankroll is £, then our bet stake.