Author

Topic: Kelly criterion ELI5 (request) (Read 645 times)

legendary
Activity: 1302
Merit: 1008
Core dev leaves me neg feedback #abuse #political
April 13, 2014, 08:38:13 PM
#2
I don't understand how to apply Kelly Criterion (I am bad at math). Could someone explain how to apply it to Bitcoin. Thanks.

Well if you were day trading for example, you could use it to find the amount you should be risking on each trade.  For example, if you are buying coins at 400, and closing the trade when price hits 420 or 380 (a 5% move) and you figure it's a 50/50 probability...and your total bankroll is $10000, you can plug those numbers in and it will tell you how much to buy.  It's a money management formula. 

hero member
Activity: 658
Merit: 503
Monero Core Team
April 13, 2014, 01:58:55 PM
#1
I don't understand how to apply Kelly Criterion (I am bad at math). Could someone explain how to apply it to Bitcoin. Thanks.
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