Staking Plans - Kelly Criterion, Flat Betting, Percentage Staking. What Do You Use and Why?

[SharpEddie47]

Started with flat betting. Moved to percentage staking. Spent two years attempting full Kelly. Settled on something between fractional Kelly and flat betting that I've used for the last decade.

The journey through staking methodologies taught me more about the limits of my own edge estimates than about optimal bankroll management.

The Kelly Criterion is theoretically correct. Bet a proportion of your bankroll equal to your edge divided by the decimal odds minus one.

The problem: Kelly requires an accurate edge estimate. My edge estimates are not perfectly accurate. When Kelly is fed an overestimated edge it prescribes overbetting. Overbetting at scale produces drawdowns that functionally eliminate the bankroll before the edge has time to play out.

Full Kelly on a perceived 6% edge that's actually 3% is not double the optimal bet size.

It's potentially catastrophic depending on the variance distribution.

I use quarter Kelly now. Theoretically suboptimal. Practically survivable.

What does everyone else actually use and why.

 

[Klaus]

Fractional Kelly. Specifically half Kelly with a maximum single bet cap.

The reasoning is mathematical.

Full Kelly maximizes the logarithm of expected bankroll growth assuming perfect edge estimates.

My edge estimates are not perfect. They're the output of a model that has been validated over fourteen years but still contains uncertainty.

Half Kelly is optimal if my true edge is approximately half my estimated edge.

This seems conservative. It's the appropriate conservatism for someone who knows their model has uncertainty.

The maximum single bet cap: regardless of Kelly output I don't place a bet exceeding 3% of bankroll.

The cap handles the cases where Kelly recommends a large bet because the edge appears extreme. Extreme apparent edge is more likely to reflect model error than genuine edge that large.

The result: a staking plan that's theoretically suboptimal but practically robust to my own estimation errors.

 

[FadeThePublic]

Used flat betting for twelve years. Recently moved to a mild percentage staking approach.

The argument for flat betting that I held for a long time: my edge estimates aren't precise enough to justify variable staking.

If I'm not confident that this selection has twice the edge of that selection, varying my stake based on that distinction is adding noise rather than signal.

Flat betting treats each selection as equal edge. This is wrong but it's wrong in a consistent and manageable way.

Variable staking treats selections as different edge levels. This is right in theory but wrong in execution if your edge differentiation is inaccurate.

I moved to percentage staking specifically to let the bankroll compound during good periods.

Not because I believe Kelly is correct. Because flat betting on a growing bankroll leaves too much on the table when things go well.

 

[TaffyTipster]

Flat betting. Always.

Twenty quid on the rugby. Occasionally forty if I feel very confident.

The "if I feel very confident" exception is the problem. That's not a staking plan. That's emotions deciding stake size.

The honest version: I flat bet because I haven't thought about it seriously enough to do anything else.

What I've noticed: the forty quid bets don't win at higher rates than the twenty quid bets.

The confidence that triggered the larger stake wasn't predictive.

The times I've bet double my normal amount out of conviction. The results don't show a difference.

Which means my confidence signal is noise. Which means varying stakes based on confidence is just random stake variation dressed as methodology.

Flat betting might be right for me specifically because my conviction is not a reliable edge signal.

 

[ParlayPrincess_88]

My staking is completely based on the parlay size and what I feel like spending that week.

Five dollar parlay. Twenty dollar parlay. Depends on how excited I am about the games.

There's no bankroll concept in what I do. Just disposable entertainment spending.

Reading this thread: I'm not sure the Kelly Criterion, fractional or otherwise, applies to the way I bet.

Kelly requires a bankroll. Kelly requires an edge estimate.

I have neither of those things.

I just have a Sunday afternoon and some money I've decided I'm comfortable losing.