# Kelly Criterion Strategy AI Agent Connect

> Deterministic position sizing using the Kelly Criterion to manage trading capital.

## Overview
- **Category:** finance
- **Price:** Free
- **Endpoint:** https://edge.vinkius.com/vk_preview_LU5BD2xWR1PU4rujexShZdplr2HSrxdHAXGUY9H3/ai-agent-connect
- **Tags:** kelly-criterion, position-sizing, risk-management, trading-strategy, capital-allocation

## Description

This MCP server provides mathematical precision to trading capital management. It uses the Kelly Criterion to determine optimal position sizes based on your strategy's win rate and win/loss ratio. By applying a Half-Kelly safety buffer and enforcing a 25% concentration cap, it helps prevent over-exposure while maximizing long-term growth. Use `calculate_kelly_sizing` to find your optimal allocation, `evaluate_trade_parameters` to generate specific entry and exit instructions, and `analyze_strategy_expectancy` to evaluate your edge and risk of ruin.

## Tools

### analyze_strategy_expectancy


### calculate_kelly_sizing


### evaluate_trade_parameters


## Prompt Examples

**Prompt:** 
```
Calculate my position size for a strategy with a 55% win rate, a 2.0 win/loss ratio, and $50,000 in total capital.
```

**Response:** 
```
Your optimal Half-Kelly position size is $5,500.
```

**Prompt:** 
```
I have an entry price of $150, a stop-loss at $145, and a take-profit at $170. My allocated position size is $10,000. How many shares should I buy?
```

**Response:** 
```
You should purchase 66.67 shares.
```

**Prompt:** 
```
What is the expected value and risk of ruin for a strategy with a 40% win rate, $500 average win, and $400 average loss?
```

**Response:** 
```
The expected value per trade is $20, and the estimated risk of ruin is 0.02%.
```

## Frequently Asked Questions

**What is the Kelly Criterion?**
The Kelly Criterion is a formula used to determine the optimal size of a series of bets to maximize the logarithm of wealth, balancing win probability against the reward-to-risk ratio.

**Why does the server use Half-Kelly sizing?**
Half-Kelly is a conservative approach that halves the theoretical Kelly percentage. This reduces volatility and provides a margin of safety against errors in estimating win rates or win/loss ratios.

**How is the maximum position size limited?**
To prevent over-concentration, the server automatically caps any single position at 25% of your total available capital.