Sports betting strategy. How to use Kelly Criterion as a sports betting strategy[ 10.10.16 ]
Kelly Criterion was invented by and named after John Kelly in 1956. With this amazing strategy, you will never go bust. According to Kelly criterion, your bet size is determined by the size of your bankroll. But the major requirement is your ability to make correct betting predictions.
Kelly criterion is calculated as follows:
(odds Х your winning probability — 1) / (odds-1)
Suppose, your bankroll amounts to $10,000. Odds on your selected sports outcome are 5.00. Your winning probability is 25%. Let’s calculate Kelly criterion: (5.00 х 0.25 - 1) / (5.00 - 1) = 0.0625. This means that you need to place a $625 bet (0.0625 x $10,000).
What makes Kelly criterion a really good sports betting strategy is that your losses are going down as your bankroll is reducing. If you’re betting 10% of your bankroll, then even after 6 consecutive losses you’ll still have 48% of your original bankroll.
If you’re overwhelmed with the Kelly criterion, it’s time to get down to Earth. This sports betting strategy won’t make you rich in a nick of time. In the best scenario, your bankroll will grow by 5% with each new bet.
To start using Kelly criterion, you need to determine the size of your bankroll. The optimal amount varies from 10 to 15 your ordinary bets.
Then you need to find out how good you are at making accurate betting predictions. Here experience is of crucial importance. To get hold of the best odds, you will have to analyze multiple betting lines on multiple betting sites. Your goal is to select sports events with inflated odds – which are quite uncommon, by the way. Picking the event with the odds of 2.0, you must be dead sure that your winning chances are no less than 50%.
Another step is deciding how long you’re planning to use the Kelly criterion strategy. Once you have reached your desired amount of winnings, you should take the money and end the sequence.
Using the Kelly criterion is only effective when you’re estimating your winning chances correctly. If you tend to overestimate your winning probability, you may place a way too big bet. To insure yourself against this risk, you may consider dividing the result by 2.
Furthermore, you can use the Kelly criterion formula to calculate the size of your bet. For example, according to Kelly criterion, you should bet 4% of your bankroll on Game 1 and 2% on Game 2. Then you should bet 4/6 and 2/6 on Games 1 and 2 respectively.
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