Kelly Fraction Calculator

What Kelly tells you

The Kelly criterion gives the bet size that maximizes the long-run growth rate of your bankroll given a known edge:

f* = (b·p − q) ÷ b   where b = R-multiple, p = win rate, q = 1 − p

If the formula returns a negative number, your edge is negative — don't take the trade.

Why traders use fractional Kelly

Full Kelly is mathematically optimal but assumes you know your true edge with certainty. In real trading you don't — your win rate and R-multiple are noisy estimates from a finite sample. Full Kelly with overestimated edge leads to violent drawdowns.

Half Kelly retains ~75% of the growth rate with roughly half the volatility. Quarter Kelly is common for discretionary traders and fund managers who want smoother equity curves.