One important thing that bettors should understand about sports betting is bankroll management. It doesn’t matter whether you are a veteran or a newbie, if your bankroll management is not right, you are probably taking higher risks than you can afford. Bettors should start by always looking for a mathematical edge rather and review of the best international lotteries than rely on luck. To determine how much one can bet, bettors should learn how to use the Kelly Criterion method. This betting strategy is commonly used and considered a betting strategy in its own right.
Definition of Kelly Criterion Betting Strategy
While most players trust their instincts to place wagers, other methods allow one to trust the world of probability and mathematics like Kelly Criterion. Kelly criterion is a money management formula that calculates the total amount a player should bet when having both the given and the true odds.
A scientific researcher known as J.L Kelly in 1956 developed the method to maximize the potential return of any investment or bet. Even though Kelly Criterion sounds straightforward, there is an element of complication.
How Does it Work?
To use the Kelly Criterion betting strategy, one needs to apply the formula below every time you place your bet.
This can be explained as
[(winning probability x (decimal odds-1)) – Losing probability] : (odds -1).
An Example: the chance of throwing dice and lands on 1, 2, or 3 is 50%. However, the dice is biased and has a 60% chance of ending up on 1, 2 or 3.
Q= 1-0.6= 0.4
The workout: (0. 6×1-0.4)/1=0.2
Therefore, the Kelly Criterion method suggests that the player should only stake 20% of their bankroll. If you bet over 20% repeatedly, you are likely to lose a lot of money and go broke. Inversely, placing a bet below 20% should give you a modest profit.
- The Kelly strategy ensures that players and investors lose less money in case of prolonged failure.
- It also helps you decide on the amount of stake to place.
- If a player is able to search out underestimated events and bets successfully, he or she can generate income for the long run.
- The method is great for helping you avoid going bankrupt because of placing bad bets.
- However, Kelly criterion calculations may return a negative number, which means that the expected value is not positive.
- This formula helps to create a balance because it takes into account the player’s bankroll size, growing it and protecting.
- One of the methods works only for placing single bets as its usage for multiple bets is not highly recommended.
- High predicting accuracy- The method highly relies on the correct prediction of the winning and losing percentages of every game.
In conclusion, though different bettors, especially in LeoVegas, live betting for Indian players actively use the Kelly Criterion betting system, it has its own advantages and disadvantages. Therefore, it is important for each gambler to decide whether the betting strategy suits them or not.