KELLY'S CRITERION

Here you can find a teory which has been widely used to maximize the profit of the capital in a long period.

Thanks to Kelly's formula we can quantify the percentage of our capital, we need for eachbet.

Let's check the formula:
(quotation x estimation- 1)/(quotation - 1)
Multiplying the result by 100, we will obtain the percentage of the Reserve Fund we should designh for the bet.

Example:

Amount we have to bet as a whole: € 1000
Quotation: 5.00
Estimation: 0.25 (25 %)

(5,00 x 0,25 - 1) / (5,00-1) = 0,0625
That means we'll have to bet the 6.25 % of our capital, that is
€ 62,5

There are many constrasting opinions about this formula, the person overworking it should have a great Reserve Fund knowing that the expected profit could come in a long period. Others consider this aspect as a risk, in facts you should drop into high risks, in particular if you overwork it considering "value" events, in this case the percentage of the capital you need to bet increases a lot.

Another choice you have is to overwork the subdivision system dividing by 2 the percentage; in this way you can minimize the risk.

You can also overwork Kelly's formula if you want to determine proportion of the game, helping, ih this way, the gmabler to decide how many coins he should bet on mark 1 or on mark 2. This little trick could be analyzed considering the followiing example

capital = 1.700
on mark 1 = 4%
on mark 2 = 2%
bet = 6%
amount to bet= 100
you should use:
4/6 = 66.7 on mark 1
2/6 = 33.3% on mark 2.

NOTICE
Wa have to state precisely a very important point, which could pass unnoticed but which is very important and basic alement for Kelly's theory.

The probable profit percentage does not reflect the true fairness of the proportion between investment-profit, since quotations the bookmaker offers are not reasonable, because they take into consideration the profit every single gambler retains.

I link to the first section "how do quotations originate"; you should read it carefully.