You can have correct estimates and still lose your bankrolli if you stake too much. Stake size is a separate decision from selection.
Units
We measure stakes in units. 1 unit is 1% of the bankroll. A 2-unit tip means 2% of your bankroll whether you have 200 or 20,000, and the system survives a run of losses without knocking you out.
The Kelly formula
The Kellyi criterion (John Kelly, 1956) gives the fraction of the bankroll that grows it fastest in the long run: f = (p × odds − 1) / (odds − 1). With a 55% probability and odds of 2.00, f = (0.55 × 2 − 1) / 1 = 10%. Full Kelly would stake 10% of the bankroll on one bet.
If the result is zero or negative, the price has no edge and the right stake is zero.
Why nobody plays full Kelly
The formula assumes your probability is exactly right. In practice estimates carry error, and the formula magnifies it: when you overestimate your edge, full Kelly stakes far more than it should.
Near the optimum the growth rate is about f × (2 − f) relative to the maximum, where f is the share of Kelly you play. Half Kelly keeps roughly 75% of the growth with much smaller swings. Twice Kelly gives zero long-run growth with very large swings.
Practical rules
- Play a fraction of Kelly, usually a quarter to a half.
- Set a cap per bet, whatever the formula says.
- Bets on the same match or the same day are correlated. The formula ignores that, so reduce the stake.
- Never stake money you cannot afford to lose.