False progression expectations

[crash]

I have been hearing about progressions for years, perhaps this link might finally put the progression to bed.


http://www.bjmath.com/bjmath/progress/unfair.htm

[Sportz]

Crash,

After having a quick look at that jumble of letters and numbers and whatever, I've decided that I'll just have to take your word for it.

[La Mer]

Crash,

After having a quick look at that jumble of letters and numbers and whatever, I've decided that I'll just have to take your word for it.

I reckon Crash should explain what it means in simple terms so we can all understand it. :-)

[crash]

Good one La Mer !!!

OK, a simple request.

PROGRESSIONS DON'T WORK 8-)

....because there is always a 'negative expectation' [even if your very positive about your chances] at work in horse racing. Meaning your odds are never fixed at better than 49%. This doesn't mean you can't win at the game, it just means that flat stakes % of bank betting is better than progression betting.

[crash]

To expand on progressions a bit further, it might be worth thinking about the punter who is exploring the use of, or is trying a progression for the first time. Mostly it is those who are loosing punters, as a winning punter netting profit flat stakes win/place or whatever, is as happy as a pig in mud with what they are already doing.

The loosing punter exploring progressions is searching for a way to turn loss into profit, which is a bit like trying to spend more than you earn without getting into debt [how our society and it's economy works]. In other words the punter interested in progressions is mostly chasing losses though they will rarely admit it [even to themselves].

The only progression that will never get you into trouble is the winning progression. Increasing the bet amount by a progression line after a win and not a loss. Long term of course you will be no better off than sticking to flat stakes betting, but it will give you the 'impression' of being better off. That might be worth something.

[KennyVictor]

Thanks for that link Crash, there's nothing better than to see some buggar use a pageful of numbers and letters (dissapointed with the lack of greek letters) to prove what you felt was the case all along (even if one's comprehension pulls up short after the introductory paragraph).

If you are winning on level stakes though there must be something to be said for increasing your bets (safely) as your bank gets bigger. Obviously your percentage return won't improve but your bottom line must.

KV

[La Mer]

The only progression that will never get you into trouble is the winning progression. Increasing the bet amount by a progression line after a win and not a loss. Long term of course you will be no better off than sticking to flat stakes betting, but it will give you the 'impression' of being better off. That might be worth something.

This is a bit of a smoke and mirrors trick you're playing Crash. It is already proven mathematically that the Kelly Criterion will in fact improve on level stake where a level stake profit exists. There are countless references to this in various books and on the net.

Progressive level stakes will also enhance level stakes profit, which I think you are alluding to, but to state the "it will give you the 'impression' of being better off" is to not true and if you think not, then simply provide the proof to the contrary. :-)

[davez]

sounds to me like another maths boffin did his arse using the martingale and thought he would try to find out why. wheather he has or not who knows?

[La Mer]

sounds to me like another maths boffin did his arse using the martingale and thought he would try to find out why. wheather he has or not who knows?

Not sure which 'maths boffin' you are referring to davez, but the following is an extract from Dr. Z’s Beat the Racetrack By William T. Ziemba & Donald B. Hausch, both highly qualified mathematicians among other qualifications that these two men have and neither is a gambler as such.

"The absolute best money management system is the Kelly criterion. It has quite a few properties that the authors favor. It determines bet size solely on the basis of the goodness of each bet. It tells you to bet more when you are winning because your betting wealth is higher. Finally, it practically protects you from going broke since you wager an amount proportional to you betting wealth. One of the major assumptions underlying the Dr. Z system is that you bet according to the Kelly criterion."

[Shaun]

neither is a gambler as such.



This is the reason the kelly's is not the best form of staking....mathamaticly yes it may be but emotionally it is not.....90% of punters could not handle what kelly betting offers when it cals for a bet of 20% of your bank on one selection and it losses then you can be sure that will have an affect on the emotional state of the punter....also to work the system correctly you need to be able to assess a horses true price....some thing that also 90% could not do......IMO the best form of staking is a bank percentage bet of between 2% & 5% of your bank depending on your SR and a recalculation of the betting amount at a predetermind level....this level can be anything from every 10 bets to say once a month....i would not suggest a recalculation every bet.

[La Mer]

This is the reason the Kelly's is not the best form of staking....mathamaticly yes it may be but emotionally it is not.....90% of punters could not handle what Kelly betting offers when it cals for a bet of 20% of your bank on one selection and it losses then you can be sure that will have an affect on the emotional state of the punter....also to work the system correctly you need to be able to assess a horses true price....some thing that also 90% could not do......IMO the best form of staking is a bank percentage bet of between 2% & 5% of your bank depending on your SR and a recalculation of the betting amount at a predetermined level....this level can be anything from every 10 bets to say once a month....i would not suggest a recalculation every bet.

I actually agree with a lot what you've stated Shaun. But the Kelly Criterion is not the invention of either William T. Ziemba & Donald B. Hausch, being the creation of a John Kelly who was working on a totally different product which had nothing to do with gambling.

He was working for AT&T's Bell Labs in 1956. His original formulas dealt with long-distance telephone transmission signal noise. But the gambling community (think it was Edward Thorp who was the first to write about it in a gambling sense) quickly understood that the same approach may help them to calculate the optimal amount to bet on a horseracing and other gambling options and the best way to take advantage of overlays and underlays, maximizing the growth of your bankroll over the long term.

The Kelly Criterion is a recognized by many to be the best money management system and is often referred to when the question of optimal betting size is being discussed and is mentioned in many non-gambling books on money management such as stock exchange investments.

The question of the emotion that would be required in operating the Kelly is of a major consideration, and is why many use less aggressive alternatives based on the Kelly principles, but that particular aspect is NOT what this topic is about, more that it is MATHEMATICALLY possible to enhance level stake profit through the use of a staking plan such as the Kelly.

More on Edward Thorp and the Kelly Criterion can be found at:

http://www.bjmath.com/bjmath/thorp/paper.htm

[crash]

La Mer,

The Kelly method of staking flogged itself to death in this forum long ago [R.I.P] and I'm surprised you have resurrected it as the 'shining banner' of successful progression staking suitable for punting.

The Kelly's use is almost entirely restricted to the Stock Market and I bet you don't use it for punting [?].

I fully agree with Shaun's sentiments here regarding the Kelly [or even the 1/2 Kelly], which is a theoretical road that punters would never travel on. It is just far too aggressive and makes unrealistic demands and assumptions of the punter. Price determination errors would become very costly as overlays and underlays don't have large neon signs on them. Practical and theoretical punting are two different worlds and by resurrecting the Kelly I think it is you perhaps holding the mischievous mirrors and creating the smoke.

The thread I supplied has not been challenged on the maths forum site it came from and the fact you [nor I for that matter] don't understand the maths involved, doesn't make it an invalid equation, nor either does the Earth remain flat until it is mathematically proven round in simple maths we all understand.

Next to disproving the maths equation in the link, perhaps you would like to mathematically prove [simple maths will do] that progressive staking is profitable long term in actual punting [not theory] where overlays and underlays are never more than subjective opinion on shifting sand, or at least provide a link to a maths equation that does prove this ?

[kenchar]

Crash,

Howya going stranger, have been following this thread with interest, and have to agree with you, if you can't make it flat stakes then give it away.

The only progression is the % of your bank and even in that don't increase your bet from whatever % you are working to until your bank doubles THEN increase your bet by 50%.

I had 1 sojurn into progression betting and that was in the mid 80's.

I was backing 2 horses a race with a $4000 bank. My first bet was $2 per horse and the bet increased by approx 50% each race.

I used to run meeting to meeting as if 1 meeting, in other words if I finished the day on the 8th bet the next meeting I would start at the 9th bet.

I NEVER went bust, with most days running fine but then that dreaded run of outs would come and I was very glad I took a spare pair of undies with me.

I always held my ground and came out of it, but I ask you how many punters would start with a $2 bet ($4) with a $4000 bank and hang in when you were on your second last bet, not many.

Also very noticable you've mellowed in your posts.

Keep Well

If anyone out there is interested in this method let me know and I will post it.

It still works today, you won't win a fortune but it is very consistent, BUT you have to bet the % of bank I did and hang in on the underpants changing days.

Cheers

[La Mer]

La Mer,

The Kelly method of staking flogged itself to death in this forum long ago [R.I.P] and I'm surprised you have resurrected it as the 'shining banner' of successful progression staking suitable for punting.

The Kelly's use is almost entirely restricted to the Stock Market

How would you ever know that Crash? And even if that was the case then doesn't it disprove that what you claimed originally (via your link). If people playing the stock market can see the value of Kelly and noted mathematicians support the Kelly theory then there must be value in what he disclosed back in the mid-50's.

You mentioned some unnamed maths forum, I bet there was not one person on that site that could disprove the Kelly theory with actual prove.

Can you prove what you claim with actual proof? I somehow doubt it.

[crash]

Hi Kenchar,

Good to see another old dog still kicking and yes this old dog has learnt some new tricks that have tempered the mut in me [a bit anyway]. Approaching old age has mostly done it though !!


La Mer,

I think I understand what you are saying, and you correctly describe the Kelly progression as a 'theory' that can [if conditions are favourable] out perform flat stakes over finite periods.

I'm not disagreeing with you that it can work, but simply 'working' however is no argument that long term it will 'out perform' the returns flat stake % betting will return. If a progression can't, then it has no advantage or indeed relevance, whatsoever. The fact that the Kelly is used by some investors in the Stock Market, only proves that the progression myth is alive and well among those gamblers too, nothing else.

The equation's maths point was not trying to prove that a progression can't return a profit, or in favourable conditions out-perform flat stakes staking during a finite period, it was proving that no progression [and that's all the Kelly is] can 'out perform' or produce greater profit than flat stakes betting long term. Certainly not in the real world anyway.

[Duritz]

LOL I have a good "working" knowledge of maths. Like when I was in Year 12 I got A+ on all my maths exams, however I did it not by using their theories (b/c I hadn't learned them, I spent my year 12 scribbling horse racing mathematical's in my books, working out theories in my head), but by using my mind and working out the problem, then simply writing the answer in the big gap provided. As such, my maths exams looked like this:

Q14 - Blah blah blah x to the y blah blah
















82.6














Q 15 - Blah blah more blah


SO - I laughed when I followed the link from Crash, b/c I had no earthly idea what was going on, however after reading half a page I came to the comment "Now it is a little easier to see what is going on."

!!!!!!

Thanks for the laugh. That was great. I have no idea if he proved anything on there, but gee it was great being completely mystified, then seeing a comment like "Now it is a little easier to see what is going on." LOL

Duritz.

[crash]

Duritz,
your reaction to that line was the same as mine :-)


La Mer,
Last night I did a bit of research about the Kelly and I think we have both mistakenly been arguing about a progression method that just is not a progression method at all, as for a start it is correctly named the 'Kelly Method' and not [for good reason] the 'Kelly Progression Method'. Unless you used it to suck me in [ good one:-) ] we both have misinterpreted it's methodology.

The Kelly adjusts staking according to actual odds advantage/disadvantage to maximise profit or minimise potential loss. It is a fractional staking adjustment method [ more like adjusting our bet size in flat stakes % betting, but just more complex and related to odds as well as Bank size], not a progression method as we use the term in horse racing or other types of betting. The flaw that would send anyone broke with this method in racing is that unlike Casino games like blackjack and roulette etc., the probability factor [odds] of a horse winning or loosing can never be more than an educated guess. The Kelly method relies on accurate probability that is impossible to calculate in Horse Racing.

There are several books out about using the Kelly Method in the Stock Market, so I assume it is used there obviously.

I thought the maths equation link had a link to the forum it came from but it doesn't. However, unwittingly you already have it and have supplied it in one of your posts here. The equation itself is written by the site owner :-)