As a general rule what is an acceptable risk of ruin? What percentage risk of ruin do people normally use.
If you are a fixed better, it's what risk you are comfortable with.
For fixed bets the literature often states a 13.53% ror.
For fixed bets the literature often states a 13.53% ror.
The 13.5% figure refers the ROR if you calculate the optimal betting scheme for your initial bankroll and never vary. Your statement gives the impression that you are flat betting.
Alternatively, if you resize your betting scheme after each change in your bankroll (after each win or loss), your ROR would be 0, since if you lose a hand, you would reduce the size of your next bet accordingly.
In real life, you would never be able to bet this way because an optimal bet will almost always include fractions. Also, you would require phenomenal aritmetic skills to be able to calculate your next bet.
So, to avoid excessive risk resulting from less than optimal bets, many APs use a fraction of the optimal bet sizes, say 1/2 or a 1/4 (this would commonly be referred to as 1/2 Kelly or 1/4 Kelly).
The concept of optimal betting is covered in the Blackjack Attack by Don Schlesinger. While the mathematics is fairly complex, it is based on trying to determine what size bet will maximize your expected value while minimizing your risk.
What do u mean by a flat bet. I would only vary my bets up or down depending on how my bankroll was doing. If I were to double my bank then I would increase the bets and if i lost half my bank i would lower my bets. but other than that the bets would stay the same. so a 10 % ror is an acceptable one?
My original answer concerned fixed (no resizing) bets.
If you want to consider resizing at some point then 10% is fine.
If you cut your bets by half if you lose half your bank your ror would be 3.16%
If you lose half and then cut your bets by half your ror from that point forward with no further resizing would be 10%
I think we are mostly on the same page.
I did not say flat betting I stated fixed. To me fixed means no changing. Am I mistaken on the bj vocabulary?
I think when you refer to AP's using a fraction of kelly 1/3 or 1/4 they are probably using a fixed spread corresponding to a ror of .24% and .03% respectively. I would think playing 1/4 kelly resizing would be extremely conservative. However, if the bank is big enough I guess it can be justified.
I agree with all your statements on continuous resizing, 0% ror and difficult in the real world.
In BJA Sch. is talking about fixed bets in chapter 10.
If you talk of risk of ruin in its literal meaning, namely losing ones entire fortune, then 10% is obviously far too high.For a professional who has no other income, this risk should be less than 0.1%.Mine is actually about 0.01%.
The answers you got up to now took RoR in the sense of losing ones session or trip bankroll which is far less dramatic since you can always strike back another day.
The bankroll you should take for a session or a trip depends on the travelling distance and the number of hours you intend to play.
My advice: minimum bankroll for a session: 20 maxbets
for a little trip:30 maxbets
for a longer trip:40 maxbets
Francis Salmon
I did not say flat betting I stated fixed. To me fixed means no changing.
But a person unfamiliar with the literature might mistake fixed betting for flat betting.
Both of my answers were valid.
They did not consider a trip or short term ror.
They were intended as total ror which is what the original quesion seemed to imply.
If one subjectively thinks a 3.16% ror is to high, that is fine. I think if it is a small/replenishable bankroll this ror is acceptable. If it is a large unreplaceable one then playing to a total 3.16% ror is risky.
The orignal questioner mentioned in their second post cutting bets if half bank was lost so I provided some information.
If you don't mind explaining?
How do you achieve your .01% ror?
Do you play fixed or resized?
If you resize then when?
Thank you for your time
I didn't mean to criticize your answer but we obviously have a different conception of bankroll. For you it is money that you can afford to lose and then a 10%risk is okay.But if you have given up your job like me, your whole fortune is your unreplenishable bankroll and losing it really means ruin.I don't want to run a 10% chance of becoming a beggar.It would be like playing russian roulette.
To calculate my RoR I used George C.'s "Ruin Formula" which is mentioned in Schlesingers BJA.I know my hourly winrate through my records and used a rather pessimistic sd (30fold).For my bank I allowed for living expenses and this resulted in the following calculation:
Risk of ruin =(29/31)**140= 0.01%
Francis Salmon
PS. I haven't resized my bets for years and probably never will.Heat and fluctuations are big enough like that.
