This is a useful clarification. I use “edge” normally to include both the difference in probability of winning and losing and the different payout ratios. I think this usage is intuitive: if you’re betting 5:1 on rolls of a six-sided die, no one would say they have a 66.7% “edge” in guessing that a particular number will NOT come up 5⁄6 of the time — it’s clear that the payout ratio offsets the probability ratio.
Anyway, I don’t want to clunk up the explanation so I just added a link to the precise formula on Wikipedia. If this essay gets selected on condition that I clarify the math, I’ll make whatever edits are needed.
So there’s a technical definition of edge which is your expected gain for every unit that you bet, given your own probability and the bet odds.
I agree that not clumping up the post is probably best but to make the post correct I suggest adding the underlined text into the definition in case people don’t click the link.
bet such that you are trying to win a percentage of your bankroll equal to your percent edge.
This is a useful clarification. I use “edge” normally to include both the difference in probability of winning and losing and the different payout ratios. I think this usage is intuitive: if you’re betting 5:1 on rolls of a six-sided die, no one would say they have a 66.7% “edge” in guessing that a particular number will NOT come up 5⁄6 of the time — it’s clear that the payout ratio offsets the probability ratio.
Anyway, I don’t want to clunk up the explanation so I just added a link to the precise formula on Wikipedia. If this essay gets selected on condition that I clarify the math, I’ll make whatever edits are needed.
So there’s a technical definition of edge which is your expected gain for every unit that you bet, given your own probability and the bet odds.
I agree that not clumping up the post is probably best but to make the post correct I suggest adding the underlined text into the definition in case people don’t click the link.