Kelly Criterion
Optimal sizing formula: bet = edge / odds. Maximizes growth but is aggressive — use fractional Kelly (25-50%).
In Depth
Kelly Criterion is a fundamental concept in prediction market trading. In platforms like Polymarket with thousands of active markets, understanding kelly criterion is essential for consistent profitability. TradeSphere data across 5,400+ markets shows that traders who master these concepts significantly outperform those trading on instinct.
In practice, kelly criterion connects to Position Sizing, Bankroll Management, Edge. PolyPulse tracks these metrics and publishes weekly analysis. For hands-on application, PolyFire provides real-time market data and copy trading via Telegram.
Related Terms
3Position Sizing
tradingDetermining how much capital to allocate per trade. Prevents any single loss from crippling your bankroll.
Bankroll Management
riskManaging total capital to survive losing streaks and maximize long-term growth. Never risk enough to be knocked out.
Edge
analysisDifference between market price and estimated true probability. Positive edge means mispricing in your favor.
See It in Action
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