Kelly criterion calculator
Calculate the ideal fraction of capital to risk using the Kelly criterion, based on win rate and win/loss ratio.
How to useKelly criterion: how much to risk per trade
Educational tool, not investment advice.
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Kelly criterion calculator: what it is for
Enter the win rate, average win and average loss. The calculator applies f = W − (1 − W) ÷ R and shows full Kelly, half Kelly and quarter Kelly, plus the amount for your capital and the expectancy per trade.
Educational tool: the calculations are estimates and not investment advice.
How to use
- Enter average win rate, win and loss.
- Enter your capital.
- Compare full and fractional Kelly.
When to use it
- Size the risk per trade.
- Check whether a strategy has an edge.
- Study capital management.
Frequently asked questions
What is the Kelly criterion?
A formula that gives the fraction of capital to risk to maximize long-term growth: f = W − (1 − W) ÷ R, where W is the win rate and R is average win ÷ average loss.
Should I use full Kelly?
Usually not. Full Kelly causes large swings and depends on precise estimates. Many use half Kelly (50%) or a quarter to reduce risk.
What if the result is negative?
It means negative expectancy: with these numbers the strategy loses money in the long run and the ideal is not to trade.
Is it really free?
Yes, 100% free. No sign-up, no subscription and no usage limits. All Tools123 are free.