I'm still murky on how to calculate full kelly on my 30k BR. Also how does one adjust bets in real time? Is the max FK bet your max bet at very high TC? And you ramp up to that?
If one plans to use the "Kelly Criterion" for bet-sizing
they should employ a slightly conservative approach.
"Full Kelly" assumes your comfort level will embrace
a 13.5% R.O.R. I prefer one tenth of that but y.m.m.v.
I set my "Max" bet to approx. a 2% advantage which varies
depending on table conditions, including House Edge, etc.
Learn what your Count gives as your advantage at various
True Counts and size your bets accordingly.
This is actually one of Flash's more interesting posts, especially the comment in his last 2 sentences. Another way if describing it is to beware of additional variance on games with lousy rules, as well as the additional variance experienced by higher ramps required with poorer pen situations.Originally Posted by ZenMaster_Flash
Most publications have Full Kelly bet ramp on 10k bankroll. Basically you bet $40 on 0.5% advantage, $80 on 1% advantage, $120 on 1.5% advantage, $160 on 2% advantage and $200 on 2.5% advantage. Since having more than 2.5% on a shoe game is really rare, we cap the bet at $200 at $10 minimum table. But theoretically you should bet $400 on 5% advantage if TC goes that high. This also assumes no heat. The casino might think you deploy a 40 to 1 spread at a shoe game and ban you from playing BJ.
Since you have 30k bankroll, your Full Kelly bet ramp is $30 (minimal), $120, $240, $360, $480 and $600 accordingly. If your bet ramp is $10, $40, $80, $120, $160, $200, you are using one-third Kelly Bet and your risk of ruin is tremendously reduced to well under 1% instead of 13.5%.
Another good resource is Blackjack Attack, especially if one is a High-Low player. Don gives not only the Kelly formuale, but a Risk of Ruin function where you can figure out the appropriate bank per betting unit under a certain RoR...say 1.35% per Flash's statement.
Get the latest edition. Flash would know which one.
Full kelly bets a set percentage of your BR considering advantage and variance for the betting bin you are in. There is no max bet unless of course you hit table max. It is always good to see your full kelly ramp even if you have no intention of using it. A full kelly ramp would change as your BR changes. It would also change with changes in rules and/or pen. If you want to play full kelly you should have a plan for at what BR change you will adjust your ramp. You may choose to play at just under full kelly to account for the fact that you aren't changing your ramp after each win or loss. Once you cap your bets things start to change. Like risk averse indices are now viable. Playing full kelly there are no RA indices that I am aware of. If you play some disadvantage counts things start to change. These things will affect the size of the rest of your bets. Your ramp works as a team. The winning strategy varies by the game and style of attack being used. Most just use software to figure out how to adjust to these changing dynamics.
So you don't really adjust your bets in real time. Just pick a spread before you go out and you're good to go with it. I asked about the rules because the rules are going to have an impact on the edge per true count. Let's take a look at a pretty common rule set :
6 decks, H17, DAS, DA2
These are not great rules but they are reasonable. With great penetration like 1 deck cut off out of six, you have a fine game.
TC 1 : .15%
TC 2 : 0.69%
TC 3 : 1.25%
TC 4 : 1.82%
TC 5 : 2.41%
So the formula for full kelly is bankroll * advantage * .7
So for example your advantage at TC 5 is 2.41%. Your bankroll is $30,000. So 30000 * 2.41% * .7 = 504. Of course you would simplify to a bet of one purple chip.
TC 4 : 382 (simplified to $400 I guess, bet with 4 black chips)
TC 3 : 262.5, simplified to 250, bet in green
TC 2 : 144.9, simplified to $150
TC 1 : 31.5
In order to determine your advantage per true count it is crucial to use the invaluable CVCX blackjack simulator software, as different rule sets will lead to different advantages at the same true count.
Of course full kelly is the maximum you would ever want to bet. Exceeding full kelly is counter productive for the purposes of bankroll growth. But you may wish to bet less than full kelly, if you would rather grind it out and not risk going on a substantial downswing right away.
A player may think they have a 13.5% ROR with full kelly but the truth may be a lot higher than you think. One could have error in deck estimation , counting, back counters jumping into games , early shuffles? There are many older posts that explain all that in details.
Chiming in.... as I have always understood the 13.5% ror would only be true IF you continued to bet the same regardless of bankroll change. If you resize properly you should theoretically never go broke? There's always limitations like chip denominations and stuff that prevent perfect optimal bets. I am pretty sure most player do some sort of resizing when faced with terrible negative variance with bankroll shrinkage....
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