Longest losing streak

[raybo]

To calculate probable longest losing streak, with known hit rate, is this the correct formula: =Log(#bets) / -Log(1-hit%)

Trying to calculate optimum bankroll size. I've always used 50 times the average bet size, but wonder if the above formula would be better.

[BlueChip@DRF]

My formula:

Your very first bet to present day.

Works for me.

[raybo]

My formula:

Your very first bet to present day.

Works for me.

My condolences.

[Capper Al]

I use a simple swag formula. If one hits on average one out of four then square the four, or 16.

[Magister Ludi]

To calculate probable longest losing streak, with known hit rate, is this the correct formula: =Log(#bets) / -Log(1-hit%)

Trying to calculate optimum bankroll size. I've always used 50 times the average bet size, but wonder if the above formula would be better.

The formula is correct. However, for the optimal bankroll size, [insert Kelly/Isaacs lecture here]...

[raybo]

The formula is correct. However, for the optimal bankroll size, [insert Kelly/Isaacs lecture here]...

What is the crux of the lecture, if you don't mind?

For 10,000 bets at a hit rate of 30%, the formula returns 25.8 as the longest probable losing streak. Is this too low? At an average bet size of $25, the largest draw down would be $645.57, (I realize that there is the possibility that it could happen more than once in 10,000 bets).

[Magister Ludi]

What is the crux of the lecture, if you don't mind? http://www.paceadvantage.com/forum/showthread.php?t=100785

For 10,000 bets at a hit rate of 30%, the formula returns 25.8 as the longest probable losing streak. Is this too low? No.`

[raybo]

I'm not talking about optimal "bet sizing", I'm talking about optimal "bankroll size", regarding what the largest probable bankroll draw-down is likely to be.

I was involved in the thread you linked and as a result we now have an automatic bet sizing app in RS, using the exact method I presented in that thread. The only change I made was that there should be a "stop/loss" routine included, which in manual mode, would display a warning that you have lost your previous profit amount, then you decide whether or not to decrease your bet size or start completely over with % of bank. In "auto" mode that warning is not displayed, the routine automatically reduces the bet size back to the previous bet amount. The method recalculates after every race, so if you hit a losing streak you lose your previous profit rather quickly, but only your previous profit, it is your decision to reduce the bet amount further when you start getting into previously secured profits, or into your original bankroll.

What this thread is about is strictly, how much should your bankroll amount be, if you know your long term hit rate/loss rate. It has nothing to do with bet sizing, although I can see that the two would be conjoined in the real world.

[SchagFactorToWin]

I've had some luck using the streak calculator here http://www.sbrforum.com/betting-tools/streak-calculator/ and plugging in numbers until the probability is below 1%.

Using the calculator, a 30% win rate over 10k races shows a 36 race losing streak has a .79% chance of occurring. However, a 26 race losing streak has a 24.5% chance of occurring.