Kelly criterion

The Kelly criterion is a mathematical strategy that helps you decide how much of your money to bet or invest to maximize long-term growth while minimizing the risk of losing everything. It calculates the optimal proportion based on the probability of winning and the amount you could gain versus lose. By following the Kelly rule, you avoid betting too much and risking ruin or betting too little and missing potential growth. It's widely used in financial trading and gambling to find the balance between risk and reward for sustainable, controlled growth.