The Kelly Criterion is a mathematically proven formula for calculating the optimal bet size when you have a known edge. Developed by John L. Kelly in 1956.
📐 Kelly Formula
f = (b × p - q) / b
f = fraction of bankroll; b = odds - 1; p = win probability; q = loss probability (1-p)
Practical Recommendation
Most professional bettors use Fractional Kelly (25–50% of full Kelly) to reduce drawdowns while maintaining most of the growth advantage.
Start with 25% fractional Kelly. Balances bankroll growth with protection against probability estimation errors.