Build A Sports Betting Strategy You Can Be Proud Of With The Kelly CriterionAlthough the Kelly Criterion is a popular method used in the gambling industry, in this article, we will focus on how it can be of benefit to sports betting fans.
To start us off, let’s try to understand what Kelly Criterion is and how bettors can use it to maximize their profits.
What is the Kelly Criterion?
In simple terms, Kelly Criterion is a math formula which a bettor can use to determine the best amount that they should use to place a wager. This method puts into consideration the money available for use together with the best possible profit.
Although it may appear simple at first, there are more details involved before a bettor can be able to place a bet using this formula correctly. Number one of such challenges is being sure of the expected chance of a bet winning. Or at least optimizing the certainty since nothing is 100% anyway.
The formula’s main framework ensures that the wager amount is much higher when there is a probability of winning and much lower if chances of losing are high.
Remember in betting, you cannot be 10% correct all the time, and this is where the challenge in using the Kelly Criterion comes in, you have to assign it the probabilities with a high degree of accuracy. If you fail to do so, it will simply not work.
Using the Kelly Criterion Formula
If you chose to use this criterion in your sports betting, then you will have to apply the same in every bet you make.
The (bp – q) / b = f formula.
This formula may appear confusing at first so let me start by explaining what the initials mean.
"b" – this tells you the amount your bet can win. In most sportsbooks, you will find this with decimal odds. Take this as an example; a $10 bet at 5.00 will give returns totaling to $50 that is including the gamble’s stake.
"p" means the probability that a bet will win. As an example, a bet with an 80% chance of winning will have a 0.80 possibility of winning.
"q" Letter q is the opposite of p meaning, the likeliness of a bet losing. Just like the example, we have used above, a wager with an 80% chance of losing will have a 0.80. "q" probability.
"f” gives you the solution to this formula. It also provides a bettor with the most appropriate fraction to use from their stake to place a bet.