Kelly Criterion Calculator

The formula

With decimal odds d, net odds b = d - 1, win probability p and loss probability q = 1 - p, the Kelly fraction is f = (b × p - q) / b. It is the share of the bankroll that maximizes long-run growth if your probability is right. Negative means no edge: do not bet.

Example: odds 2.10 and a 50% chance give b = 1.10, f = (1.10 × 0.50 - 0.50) / 1.10 = 4.5% of the bankroll. The edge, p × d - 1, is +5%.

Why almost nobody bets full Kelly

Full Kelly assumes you know p exactly. Nobody does, and overestimating it is the standard way to blow up: the stake grows with the error. Half Kelly keeps about three quarters of the growth rate with a fraction of the variance; quarter Kelly is the common choice for bettors whose probability estimates are rough. The calculator offers all three.

Where the probability comes from

The odds are the easy input. The probability is the hard one, and it should never be a gut feeling. Two honest sources: the de-vigged closing price of a sharp book, obtained with the no-vig calculator, and the observed hit rate of a rule set over a large sample, which is what a backtest measures. A strategy that wins 55% of its bets at average odds of 1.95 over 2,000 matches gives you a p worth staking on.

In the Strategy Builder

Backtests report the win rate, average odds, yield and maximum drawdown of every rule set, the raw material of a Kelly stake. Pinnacle Automation then applies a stake rule you choose, fixed or a percentage of your bankroll, on your own account.