The Gambler's Ruin Problem: Is Betting Mathematically Impossible Without Infinite Bankroll?

[ParlayPrincess_88]

That formula makes no sense to me lol

 

[SharpEddie47]

Princess unless you track your bets and know your actual win rate and ROI, just bet a conservative fixed percentage like 1-2%.

Full Kelly requires knowing your edge, which most people don't.

 

[CoachTony_Bets]

I use 2% as my standard unit. Conservative but sustainable.

Never been in danger of ruin even during bad stretches.

 

[FadeThePublic]

I do 2-3% depending on confidence level.

Higher edge = higher Kelly percentage. But I use fractional Kelly to reduce variance.

 

[oli_sussex]

Half Kelly recommended for most bettors. Full Kelly variance too high psychologically.

 

[Klaus]

Agree with fractional Kelly approach.

Full Kelly mathematically optimal but emotionally difficult.

Half Kelly sacrifices some growth for stability.

Quarter Kelly extremely conservative but nearly ruin-proof.

 

[TaffyTipster]

You lot talking fractions of Kelly and I'm over here just trying not to bet more than 50 quid.

 

[SharpEddie47]

Taffy if your bankroll is £2500, then £50 is 2%, which is perfect Kelly sizing.

You might be following Kelly without realizing it.

 

[TaffyTipster]

Bankroll is more like £3200 mate.

So 50 quid is...

*gets calculator*

About 1.5%.

So I'm doing quarter Kelly or something?

 

[Klaus]

Actually Taffy you're doing fractional Kelly correctly.

1.5% very sustainable bet sizing.

 

[TaffyTipster]

Accidentally doing math right.

I'll take that as a win.

 

[ParlayPrincess_88]

Wait so what's MY Kelly percentage?

I have like $380 in my betting account and I bet like $20-30?

 

[SharpEddie47]

$25 bet on $380 bankroll = 6.6%.

That's pretty aggressive Princess. You're betting full Kelly or higher assuming you have an edge.

If you don't have an edge, you're over-betting significantly.

 

[ParlayPrincess_88]

Is that bad? Should I bet less?

 

[oli_sussex]

If no proven edge, yes. Bet 1-2% maximum.

$380 bankroll = $4-8 bets recommended.

 

[ParlayPrincess_88]

But $4 bets are so boring! The winnings are like nothing!

 

[CoachTony_Bets]

That's the discipline challenge Princess.

Boring bet sizing is sustainable. Exciting bet sizing leads to ruin.

 

[FadeThePublic]

Princess this is exactly why most bettors fail.

They want excitement more than profit. Over-bet their edge. Eventually go broke.

 

[Klaus]

Entertainment versus profit trade-off.

If betting for entertainment, larger bets acceptable with acceptance of higher ruin probability.

If betting for profit, Kelly discipline mandatory.

 

[ParlayPrincess_88]

I'm definitely betting for fun not profit lol

So I guess it's okay?