Archive for the ‘Betting strategy’ Category
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Risk premium
Monday, February 2nd, 2009
A risk premium is the minimum difference between the expected value of an uncertain bet that a person is willing to take and the certain value that he is indifferent to. Example Suppose a game show participant may choose one of two doors, one that hides $1,000 and one that hides $0. Further suppose that [...]
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Martingale
Monday, January 26th, 2009
Originally, martingale referred to a class of betting strategies popular in 18th century France. The simplest of these strategies was designed for a game in which the gambler wins his stake if a coin comes up heads and loses it if the coin comes up tails. The strategy had the gambler double his bet after [...]
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Kelly gambling
Wednesday, January 21st, 2009
Kelly gambling is an application of information theory to gambling and (with some ethical and legal reservations) investing. An important but simple relation exists between the amount of side information a gambler obtains and the expected exponential growth of his capital (Kelly). The so-called equation of ill-gotten gains can be expressed in logarithmic form as [...]
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Kelly criterion
Tuesday, January 13th, 2009
The Kelly Criterion or as it is sometimes referred to as the Kelly formula is a formula used to maximize the long-term growth rate of repeated plays of a given gamble that has positive expected value. The formula specifies the percentage of the current bankroll to be bet at each iteration of the game. In [...]
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Betting strategy
Saturday, October 4th, 2008
Betting strategies or betting systems are approaches to gambling intended to increase the odds of winning. Independent Events The following betting strategies have been recorded as being applied to games which operate on independent events. For such games, the odds of a particular outcome are identical for every bet played. No such strategy can beat [...]
