[vpFREE] Re: example of kelly betting a multiplay

If you calculate the exact number, it doesn't matter. For FPDW, the exact number, using the wizard's hand probabilities, is 2925. The approximation (var/edge) is 3400. The approximation is more conservative, in this case.

--- In vpFREE@yahoogroups.com, Cogno Scienti <cognoscienti@...> wrote:
>
> Does Kelly work the same way when the game does not have a normal
> distribution (like video poker)?
>
> Cogno
>
> -----Original Message-----
> From: vpFREE@yahoogroups.com [mailto:vpFREE@yahoogroups.com] On Behalf Of
> nightoftheiguana2000
> Sent: Thursday, September 22, 2011 9:26 AM
> To: vpFREE@yahoogroups.com
> Subject: [vpFREE] example of kelly betting a multiplay
>
> You find a nickel 50 play, including the card club and mailers and some
> secret promotions and employee greasing and back doors plus a fence for the
> casino swag, it's a 1% overlay. You guess your current bankroll would let
> you load up the machine about halfway, and the halfway variance is about 5.
> That would make the approximate Kelly number 5/.01 = 500. Each hand is five
> nickels = $.25, so the increment is 500 x $.25 = $125. Your current gambling
> bankroll is $2,612.21, divide that by 500 to get your Kelly bet of $5.22442
> . Some nits would say you have to play exactly that amount but that's horse
> dookey, the rule is you can't bet more than that, less is perfectly ok, in
> fact even a good idea. So here we're talking 20 hands right? 20 x $.25 = $5.
> And you're off, but not to a good start, you have a bad run of cards and
> you're down $125. Hey, that's the increment, right, see above. What do you
> do? Down to 19 hands, that's right. You drop another $125, maybe this wasn't
> a good idea, maybe the machine is fixed, maybe that gypsy fortune teller was
> right, whatever, down to 18 hands. Finally you get a nice hand and win $200
> (still a running loss of $50, right?), but you go back up to 19 hands, and
> so on. Hopefully you get the idea. $125 is your increment, you go up or down
> depending on where your current bankroll is.
>
> http://www.youtube.com/watch?v=bg8lSyGavc4
> http://www.youtube.com/watch?v=Mo0baknLDdU
>
>
>
> ------------------------------------
>
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