The bet size strategy

There are two basic components to the Kelly Criterion:

- Win probability - The probability that any given bet made will return a positive amount
- Loss probability and Edge % - The expected advantage over fair value divided by the probability of losing

These two factors put into Kelly's equation:

Kelly % = W – [(1 – W) / R]

Where:

W = Win probability

R = Profit/loss ratio

Kelly staking can be applied at different levels dependent on the algorithms volatility tolerance

The greater number of times the bankroll is turned over (assuming a positive odds edge on each bet and efficient stake sizing) the greater the expected profits