The solution to the "when to distribute profits" problem is the Kelly system. You can break the bank and do a full distribute whenever you want, then reform a bankroll the next time you go out. Play Kelly on the current bankroll, everytime. Of course you can't just leak off some bankroll during the play, for example if your win rate is say $100/hour and your bankroll leak rate is $100/hour, your net bankroll feed rate is 0, and your optimal Kelly bet would be 0, in other words it's a no go. But you can break and distribute the bank after the play, and reform a new bank for a new play, probably a good idea if you have to transport a lot of cash by plane or car. The Kelly system is based on your current bank, which of course often changes with each play. And if there is some leakage, and there usually is, you have to subtract that from the win rate to get your true feed rate. Don't forget to try to get a good handle on your error rate also, it's usually more than anticipated.
True Edge = Theoretical EV - error rate - bankroll leak rate
In the Kelly system, you always bet LESS than your current bankroll times your True Edge divided by your variance. (For the nitpickers, that's approximate Kelly, but it's a close approximation.)
Posted by: nightoftheiguana2000@yahoo.com
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