Kelly Criteria Tests with Risk Reward Ratio


Ig you recall I discussed about Kelly Criteria and I have recorded a video to derive the formula. Link

Now the open Question was about the formula when a Risk Reward ratio was different than 1. In the coin toss problem you either win 1X or you loose 1X. This is very rare in real life.

Kelly criteria is as below

K= win % – Loose % /Risk Reward ratio

A set of different senarios. Now you can have a feeling of differences. As you can imagine a RR higher than 1 is much more important then a win rate larger than 50%.


Some investment % vs  Growth of 1000 unit payroll. See the results below.

I will also attech the excel file for you at the top.

kelly 14 50

kelly 14 53

kelly 14 58







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