Warren Buffet Stategy: Developed At Bell Labs - Mange Your Bets And Trades Like A Genius.

Developed at AT&T Bell Labs to determine bet (stock or gambling) size. The Kelly criterion is a money management system that was developed by J.L Kelly in 1956. Kelly used it to predict racehorses – Warren Buffet and Bill Gross use also use it. 

I will spare you anymore history and get down to how it works - this can be applied to stock, gambling, crypto trading, currency trading - and any other outcome event.

 The non-technical explanation:

The Kelly Criterion simply concerns your bankroll. Bankroll can be defined as what you are investing in stock, currency, Steem– or the total you are willing to gamble (overall). You input a few variables (such as odds), your own estimation of your winning chances (do you have credible info or are you acting on a feeling?). 

I did my own 6 month experiment where I gambled on 5 events a day for about 6 months.  The one thing I learned is the minute you deviate from these guidelines and buy the stock or make the bet anyway - the stable system falls apart.  It as important to be disciplined in money management as is in doing your homework on the event you are "wagering" 

For Betting: Go right to  http://www.bettingtools.co.uk/kelly-calculator  put in some sample number to get an idea of how it works.  You will be amazed to see how many low percentage moves you make!

For stocks: The stock market doesn’t post odds – but that doesn’t mean you can’t come up with your own! The standard Kelly calculator will work once you get the calculator. Use the betting calculator above once you calculate your odds like in the example below.

<center></center>  You can use Kelly on stocks in a variety of situation – portfolio management is one of the major uses.     

For Steem:

Evaluate using the same formula as for stocks.  This works for other cryptocurrency as well.  Make sure you are honest when you fill this out - and when you finally use the betting calculator (as the last step).

The technical explanation: 

K% = W – [(1 – W) / R]

 W = Winning probability
R = Win/loss ratio     

If you’re a Geek here is some Python: 

 >>> from sympy import *

 >>> x,b,p = symbols('x b p') 

>>> y = p*log(1+b*x) + (1-p)*log(1-x)

 >>> solve(diff(y,x), x) [-(1 - p - b*p)/b]  y'(x) of the expected value of the logarithmic bankroll y(x) to 0 and solve for x