Acceptable R.O.R

[DSchles]

Full Kelly means your top bet is .075 of your total playing bank.

OK, you got me. Gonna have to explain this one. Top bet = (BR x edge)/variance. Assuming a variance of about 1.30 at higher counts, that would imply that your edge, when you make your top bet, is of the order of 9.75%! Damn! I must be playing the wrong games!

Don

[BJC]

OK, you got me. Gonna have to explain this one. Top bet = (BR x edge)/variance. Assuming a variance of about 1.30 at higher counts, that would imply that your edge, when you make your top bet, is of the order of 9.75%! Damn! I must be playing the wrong games!

Don

Hi Don,

Variance = Standard Deviation?

Another Question - On terminology - it says Full kelly = 13.5% risk of ruin and according to BJA, that means a 2/3 chance of doubling bank roll before halving it and 5% chance of being wiped out.

For terminology - does the 13.5% mean the chance that we at some point drop to 50% bankroll of our original bankroll? so 1/7 chance of doing that overall, and a 1/3 chance of doing that before first hitting 2x original bankroll?

13.5% risk of ruin
36.7% chance of losing half bank roll
5% chance of total wipeout. I get this


Thanks,
BJC

[DSchles]

Variance = Standard Deviation?

'

No, variance = the SQUARE of standard deviation.

Another Question - On terminology - it says Full kelly = 13.5% risk of ruin and according to BJA, that means a 2/3 chance of doubling bank roll before halving it and 5% chance of being wiped out.

13.5% ROR refers to probability of tapping out if you never resize your original bets; i.e., you don't reduce your bet sizes as you are losing. If you do constantly resize (which no one does), theoretically your ROR is zero. While the statement about doubling before halving is true, it isn't the essence of Kelly, because doubling is simply an artificial barrier that doesn't have a lot of meaning for the long term.

and 5% chance of being wiped out.

Don't know where you got this from. It isn't correct. ROR = chance of being wiped out. They're the same thing.

13.5% risk of ruin

If you never resize, yes.

36.7% chance of losing half bank roll

No. 1/3 = 33.3%.

5% chance of total wipeout. I get this

No, unfortunately, you don't.

Don

[ShipTheCookies]

...If you do constantly resize (which no one does), theoretically your ROR is zero...

This is exactly why many of them fail at this endeavor.

[BJC]

Hi Don,

Thanks! I read the last paragraph in chapter 8 before the tables and few times and now i get it.

I didn't realize the ROR calculation assumed never readjusting your bankroll.

Another question - the maximum bet for kelly, in terms of blackjack, is that assuming a situation like being at your top bet, and then splitting and doubling?

Example, betting full kelly count is TC 5+ giving me 2.5% edge roughly, and i have my max bet out, on a 10k bankroll of about $200, but it i have to split and then double i could very easily end up with 8% of my total bankroll on the table.

This seems like massive overbetting. Should the max bet be adjusted so that in a situation like this with a split and double that you have out max $200?

Terminology wise, would the second example be called quarter kelly or full kelly?

BJC

[DSchles]

Hi Don,

Thanks! I read the last paragraph in chapter 8 before the tables and few times and now i get it.

I didn't realize the ROR calculation assumed never readjusting your bankroll.

Another question - the maximum bet for kelly, in terms of blackjack, is that assuming a situation like being at your top bet, and then splitting and doubling?

Example, betting full kelly count is TC 5+ giving me 2.5% edge roughly, and i have my max bet out, on a 10k bankroll of about $200, but it i have to split and then double i could very easily end up with 8% of my total bankroll on the table.

This seems like massive overbetting. Should the max bet be adjusted so that in a situation like this with a split and double that you have out max $200?

Terminology wise, would the second example be called quarter kelly or full kelly?

BJC

The reason you divide the edge by the variance is exactly to take into account the situations you describe. It's already factored into the Kelly wager. Variance in blackjack is virtually the same thing as the average squared bet size, so, again, no need to make any further adjustments.

Don

[Optimus Prime]

The possibility of splitting and doubling is included in the overall variance, so it’s “built in” to the ROR numbers. Yes, you can end up with 8% of your bank on the felt. That’s when you hit your optimal heart rate!

I’d suggest doing some homework - read Wong and and Schlesinger for starters.

[BJC]

Thanks Don and Optimus.

In terms of the math, are splits treated an seperate hands?

For double downs, do most DD's favor the player by 2x the initial advantage?

[DSchles]

In terms of the math, are splits treated an seperate hands?

Not sure what you're asking.

For double downs, do most DD's favor the player by 2x the initial advantage?

Never counted them all. Many doubles, where you would not draw more than one card to the hand, are obviously double the initial edge. But many others, including some soft doubles and some doubles of 9, 10, and 11, vs. dealer's 7-A (some using indices) sacrifice some of the initial edge for the privilege of doubling.

Don

[Freightman]

Not sure what you're asking.



Never counted them all. Many doubles, where you would not draw more than one card to the hand, are obviously double the initial edge. But many others, including some soft doubles and some doubles of 9, 10, and 11, vs. dealer's 7-A (some using indices) sacrifice some of the initial edge for the privilege of doubling.

Don

I think a distinction should be made between double the edge and fewer hands won.

Case in point - for every 100 hard doubles available, you will win fewer hands doubled than non doubled, simply because you have an opportunity to take another card or cards on non doubled hands.

Goal of course, is most money at the end of the day, achieved by doubling. Easy to enough to show.

[DSchles]

Case in point - for every 100 hard doubles available, you will win fewer hands doubled than non doubled, simply because you have an opportunity to take another card or cards on non doubled hands.

Yes, that's what I said. But I believe the question was, do most doubles favor the player by twice the initial advantage? I said I hadn't counted them. Do you happen to know?

Don

[BJC]

Hi Don,

In regards to the question on splitting:

If I split a pair, does it count as if I was playing two separate hands from the onset? I think what i'm getting at is, are the hands independent once split?

Thus, rather than doubling my bet, I'm really playing 2 hands with the same advantage and risk in terms of bet size?

i hope that makes sense.

BJC

[Freightman]

Yes, that's what I said. But I believe the question was, do most doubles favor the player by twice the initial advantage? I said I hadn't counted them. Do you happen to know?

Don

No, I don’t - It’s easy enough to make a table outlining differentials in dollars between doubling and non doubling over any number of hands at various percentages of successful doubles. I would start with something conservative like 60% and 55% for hard and soft doubles respectively.

Could probably explain it in under a paragraph

Maybe a different way to look at it. If Player first card us a 10, with its corresponding 10% advantage, then what is player advantage for first 2 cards holding 82,73,64,55,92,83,74,65 opposite dealer up card of anything 2 thru 9.

With varying advantages depending on dealer upcard - has to be huge.