Kelly Formula — sounds fancy, but it's just a math trick that tells you how much to bet.

Back in 1956, a Bell Labs guy named Kelly cooked it up from information theory. Then in 1969, a mathematician named Thorp took it to Wall Street and ran a fund that never lost money for 19 years. Pretty wild.

So what does it actually do? It answers the eternal question: should I go in, and if so, how much?

Let's say you think $BTC is heading to $100k, but you also see downside risk to $50k. You estimate a 60% win rate. How much should you bet?

If you're stuck between FOMO and getting rekt, Kelly can help.

The formula: f = p/l − q/g

Plugging in the numbers:

- p (win rate) = 0.6

- q (loss rate) = 0.4

- g (upside from $64k to $100k) = 0.5625

- l (downside from $64k to $50k) = 0.21875

Result: f ≈ 2.03, or 203% position size. That's 2x leverage.

Why so aggressive? Because upside is big, downside is smaller, and win rate beats loss rate. All three factors push the position higher.

But here's the catch: Kelly assumes your p, g, and l are perfect. In reality, you're guessing. And if you guess wrong, full Kelly punishes you hard — way harder than it rewards you when you're right.

So I'd go with 1/4 Kelly instead, which is about 51% position size. Pull yourself back from the danger zone. Trade a bit less profit for not getting wiped out if you're off.

Not investment advice, obviously. Just a framework. Plug in your own numbers — your price target, your risk tolerance, your win rate estimate — and see what position size makes sense for you.