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Kelly Criterion The mathematical formula for bet sizing frequently used by investors Written by CFI Team Published December 10, 2020 Updated May 10, 2023 It is based on the formula k% = bp–q/b, with p and q equaling the probabilities of winning and losing, respectively. = The probability of winning q = The probability of losing, which is 1 – pExample 40 40) / 1 = 0. 20 or 20% In such a case, the Kelly criterion suggests that if one were to go over 20% repeatedly on a low number, there is a high chance one would eventually go broke. Some investors prefer to bet less than the Kelly percentage due to being risk-averse, which is understandable, as it means that it reduces the impact of possible over-estimation and depleting the bankroll. high quality imitation bagsthe tote bag cyber monday
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