thanks, i was using 0.2 instead of 1.2 in my calcs, haha i find edge divided by net return to be easier to calculate...so it would be 0.1 divided by 1.2 (i was using 0.2)
I was bored once...and out of the blue...I decided to flip my quarter: it landed on Heads...17X in a Row! i felt like i won the Lottery or something.:eek: i remember Googling the odds of that happening...and i might of as well ...won the lottery.
Am I the only one that had to look up the word "innumerate" and then the description of the Kelly Criterion?
The Kelly fraction is based directly on trade returns. All their information, including their volatilities, are right there.
disagree. Kelly applies more to fixed bets where the odds are known but much more importantly the probabilities of winning and losing can be pretty well estimated. That does not apply at all to financial markets where your probabilities of winning and losing (essentially the probability to reach your stop loss earlier than your profit target, given you start with odds by setting stop loss and profit targets) are constantly changing as function of price volatility. Kelly especially does not take into account implied/expected price volatility. So, I strongly disagree with your statement.
Fun post! For me, 1:1 is a no-go and I thought it was an interesting tell when he upped to $12. The very fact that he was willing to increase his offer intrigued me to see how far he'd go before possibly accepting. Not sure I would've managed to get to $20 (depends on the actual conversation we would've had) but I definitely wouldn't have settled for the initial increase to $12.
I think I would have accepted the 12:10 if I could flip the coin, even if it was once, knowing I need a bigger sample for the odds to work. It was only $10. If it were $100, I would have wanted at least 10 bets, not knowing the math above.
I would not have taken the bet as a 1 off (1 time only) When he offered up to repeat it 100 time - yeah - I'm in RN