I like to know when is best for resizing the bets,e.g.every 6 months,every year or after total BR increase of some %,lets say 30% or 50%I think that this matter is a common promblem for every CC in the world.Are there any sims about it?
I like to know when is best for resizing the bets,e.g.every 6 months,every year or after total BR increase of some %,lets say 30% or 50%I think that this matter is a common promblem for every CC in the world.Are there any sims about it?
> I like to know when is best for resizing the
> bets,e.g.every 6 months,every year or after
> total BR increase of some %,lets say 30% or
> 50%I think that this matter is a common
> promblem for every CC in the world.Are there
> any sims about it?
It is not a problem for most of us, since we have read Blackjack Attack, 2nd Edition, by Don Schlesinger, in which topics such as bankroll, bet sizing, and risk of ruin are discussed in great detail. I suggest you do likewise.
It may be ordered from the Online Catalog link.
> I like to know when is best for resizing the
> bets,e.g.every 6 months,every year or after
> total BR increase of some %,lets say 30% or
> 50%I think that this matter is a common
> promblem for every CC in the world.Are there
> any sims about it?
Although I would like you to read BJA, the answer to your question is not clearcut. That's because we don't know what your goal is -- grow your bank as fast as possible? As safely as possible? Somewhere in between the two?
Too frequent resizing is not optimal for growth. No resizing leads to 13.5% ROR, which may be too high for you. A good compromise is to plan to not resize until you lose half of your bank, at which point original ROR is drastically reduced, and your EV is not too drastically impacted.
Now, get the book! :-)
Don
If you mean optimal in a Kelly sense, as in what maximizes log growth of bankroll, it is after every single bet. This is, of course, impractical. Also, maximizing log growth may not be the objective. To me, "optimal" means the method that most closely meets your objectives. If your objective is to minimize the long run index, that is, have the best chance of winning in the shortest possible time, then less frequent resizing is best.
My advice: on the downside figure out the biggest risk of ruin to which you are comfortable playing. This would not be your starting point. But when you have lost a sufficient amount of money that your risk exceeds this then downsize, giving yourself some room before you hit this limit again. I'd start with a big enough bank, or a small enough ROR, that downsizing was not needed until roughly half the bank was lost. I downsize in one big chunk when a large portion of the bank is lost, but then resize upward in small increments during recovery.
On the upside: first decide whether your bankroll is in the growth or income phase. (Or it might be growth & income.) Just as with any investement, your objective affects your strategy. If you are in the pure income phase then I would never upsize bets at all. I would set win goals and take distributions when I hit them. That's what I do now, in fact. If your bankroll is in the growth phase then I'd upsize bets more rapidly in the early stages, like every time you made a 20% gain or so, and upsize more gradually as it got bigger. Some of this is affected by actual table limits, chip denominations, and other practical factors. YOu would probably won't upsize to a $17 unit. You'd wait until you could play the quarter table. Max bets also, you'd probably want to wait for convenient levels that matched chip denominations.
When growing your bank you will find it very disappointing how frequently you fall back down when trying to upsize. A short bad luck streak will wipe out a long good luck streak. You can decide how bumpy of a ride you want. The more frequently you resize the less mean time it takes to reach a target bankroll, but the more wild the swings will be. Keeping the bets consistent for a long period will give you more of a slow steady march, (but not that steady, unfortunately).
In a perfect world, I'd expect that one should resize his bet every time his bankroll changed. In the real world, one would resize bets less frequently. (Correct??)
So far, I haven't experienced any dramatic swings in bankroll (>+/-10%) during a single "session". In fact my typical session is either 1-3 hours or at most a full day (say 8 hours).
I actually resize my bets after every session, but just because I love the numbers. (When I say "resize", I'll look at the Kelly betting schedule. If Kelly says go from $46.12 to $54.87 at TC=2, I'll say, "OK, I'll keep my bet at $50)
If I had a big loss (say 25% of bankroll) I might resize mid-session, but if I were winning big, I would wait until after the session ended. I guess my goal is to keep my ROR "low", so I anticipate only making this one-sided adjustment.
> I like to know when is best for resizing the
> bets,e.g.every 6 months,every year or after
> total BR increase of some %,lets say 30% or
> 50%I think that this matter is a common
> promblem for every CC in the world.Are there
> any sims about it?
> Too frequent resizing is not optimal for
> growth.
Doesn't part of Kelly betting involve continually resizing your bets to optimize growth?
>No resizing leads to 13.5% ROR,
> which may be too high for you.
I'm not sure what you mean here. If you start out optimally, you start with 13.5% ROR and go up to 100% if you go on a losing streak or down until you approach zero if you go on a winning streak. Are you saying not resizing until you hit 13.5% ROR might not be risk averse enough for him?
>A good
> compromise is to plan to not resize until
> you lose half of your bank, at which point
> original ROR is drastically reduced, and
> your EV is not too drastically impacted.
I'm sorry, but I'm not even sure what you mean by this either. If you are dropping your bets after losing half your bankroll, are you not dropping them to return to your original ROR (or somewhere thereabout), and if you are betting optimally, isn't your EV the only thing that has changed from when you first started?
Okay, let me give a stab at trying to guess what you meant:
Resizing too infrequently is not optimal for growth. Constantly resizing every time your BR increases leads to ROR never decreasing from 13.5%, which may be too high for you. A good compromise is to only resize once you've lost half your bank, which will dramatically decrease ROR back to it's original level while only halving EV.
Is this a little more along the lines of what you meant or am I way off base?
> Doesn't part of Kelly betting involve
> continually resizing your bets to optimize
> growth?
Yes. It also leads to zero ROR, provided chips are infinitely divisible, which they aren't. It also is imposssible to achieve in real-life conditions, because you can't bet $25 at the top of the shoe and then $24.22 at the end, and then $27.13, and then, ... well, you get the idea!
> I'm not sure what you mean here. If you
> start out optimally, you start with 13.5%
> ROR and go up to 100% if you go on a losing
> streak or down until you approach zero if
> you go on a winning streak. Are you saying
> not resizing until you hit 13.5% ROR might
> not be risk averse enough for him?
No, not at all. If you adopt, as your original bet scheme, full-Kelly wagers that are optimally ramped -- and then you never change those wagers unless you go broke -- your ROR is 13.5%.
> I'm sorry, but I'm not even sure what you
> mean by this either. If you are dropping
> your bets after losing half your bankroll,
> are you not dropping them to return to your
> original ROR (or somewhere thereabout), and
> if you are betting optimally, isn't your EV
> the only thing that has changed from when
> you first started?
It would help if you would reread this section in BJA (see pp. 142-3). Before you ever play a single hand, if you decide, ahead of time, to cut back to half stakes should you lose half your bank, then your overall ROR, before you ever play a hand, is now about 5%, instead of the original 13.5%.
> Okay, let me give a stab at trying to guess
> what you meant:
Was it really not all that clear?
> Resizing too infrequently is not optimal for
> growth.
True.
> Constantly resizing every time your
> BR increases leads to ROR never decreasing
> from 13.5%, which may be too high for you.
Not true. Why consider just resizing to the upside, without resizing to the downside, as well?
> A good compromise is to only resize once
> you've lost half your bank, which will
> dramatically decrease ROR back to its
> original level while only halving EV.
It will reestablish ROR from that moment on back to 13.5% if you never resize again. I state that on p. 142. But, in the real world, you would certainly resize upward if you recovered back to your original stake, and some players might consider full-stakes even before reaching 100% of the original bank. After all, on the way down, you didn't resize at the 3/4 mark, did you? So, on the way back up, should you reach the 3/4 mark, maybe you could consider full stakes again.
> Is this a little more along the lines of
> what you meant or am I way off base?
You're not fully on the base, but you haven't quite been picked off yet, either! :-)
Don
Very good advice DD`. That` s the exact way I am seeing bankroll management. Your post shows a great knowledge between theory (which is always easier) and practice.
The thing I don't like about pg. 142-3 is you are assuming that you will only resize after losing half the BR and then never again. This is rather unrealistic. The way I like to look at my risk is somewhat similar. I look at my overall ROR. Then, I determine at what point I need to drop my bet levels. This is determined looking in adavance at what table constraints and game qualities I will face when I have to drop my bets. For example, I once had an incentive program that was worth $15/hr for me. To be eligible, I only had to maintain a $50 avg. bet. If the initial avg. bet was $80, I wouldn't wait to lose half the bank and then drop my bets in half. I'd drop my bets after losing 38% of my BR so I could still receive the extra EV from the incentives.
Once I've determined the level at which my bets need to be dropped, I determine what the risk of reaching that level is. Say, for example, I have an initial ROR of 1% and will drop my bets in half once my bankroll is halved. Then, my risk of having to drop my bets is 10%. To me, this figure is the key risk figure to look at as we theoretically will continue to drop our bets enough times that we won't ever go completely broke. And, in reality, we will likely be able to drop our bets enough times that overall, we will never go broke. It is also the key figure for me measuring the magnitude of losses. When you lose 10% of your bankroll in one session, it seems like your overall ROR hasn't changed much, but the risk of having to drop your bets has increased much moreso.
Also, my plan for increasing and decreasing my bet levels is very similar to the method DD' uses. I decrease fairly infrequently and increase a little more often. However, one of the big factors in determining how often to increase my bets is whether or not score is increased. Often times, an increased bankroll means not just higher EV but also a higher score due to either being able to increase the spread used or emptier tables that allow for more rounds per hour. But by far the most important golden rule for increasing bet levels is to make sure that intial ROR at the new level is significantly lower than ROR initailaly was at the current level. In other words, your risk should be going continually downwards as your betting levels are increasing. If they aren't, then the first time you go on a severe losing streak, it can totally wipe out years worth of winnings.
Also, I'd like to step up on Math Prof's soap box for a minute and talk about Kelly betting. It seems when we talk about theory, we always use full Kelly. The term full Kelly just makes me cringe. Even without table constraints, bet and count estimating errors, it is still insanely high risk. From a strictly theoretical standpoint, if we are not reducing our bets until we've lost half our bankroll, and we start out betting full Kelly, are we not severely overbetting the entire time our bankroll is less than the starting point? If we are betting optimally, shouldn't we not be betting full Kelly only right when we approach the level where we need to drop our bets? Or should we be betting full Kelly when we are half way between our inital BR level and the reduction level? That way, we'd be betting a little less than optimal part of the time and a little more than optimal the other part of the time.
Good point on that one. The biggest hurdle for newer, smaller stakes players is getting up to the $25 minimum. If you have a decent outside income and can replace lost banks in a reasonable period, I would accept a little greater risk and upsize more frequently until I reached a $25 minimum. Life becomes much easier at this point. You will be able to find decent conditions at faster moving games at all but the most crowded times at most casinos. After reaching this point I would take it easy a while, upsize less frequently, and decide upon a more tame risk of ruin to which you will eventually aspire as your bank grows.
Many casinos will only tolerate so big a spread, but some will let you get away with a lot more. The one casino I played by far the most for my first year would let me spread however I wanted. I started out with a small 1 to 8 and 1 to 10 spread at $5 shoes relying mostly on comps for an advantage because that was all my bankroll would allow. I then spread 1 to 15. As the bankroll increased, I moved up to the $10 tables which were twice as fast. The $25 tables were no better, so I stayed at the $10 tables. With each new bankroll plateau, I increased the spread more. At first, it was 1 to 15, then 1 to 20 followed by 2 hands of 1 to 20, then 30, followed by 40, and ended up at a spread of 2 x 1 to 2 x 50 which was basically table min. to table max.
This may be a lot more than what most casinos will allow, but any time you can increase your spread, you increase the score while increasing EV and you are far better off than if you just increased your unit size. Every time you reach a new plateau, life becomes easier: Ev's higher, the certainty equivalent is higher, and your ROR is lower than the last time you increased your bets.
Whether playing to full kelly or 0.10 Kelly, is a purely personal choice linked to risk aversion.
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