Roulette & 50/50 Gambling

This is a discussion on Roulette & 50/50 Gambling within the General Trading Chat forums, part of the Reception category; Don't bet on Roulette - Blackjack is the most favourable to the player. Alternatively, learn to play poker....

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Old Jun 2, 2008, 10:40am   #8
 
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Don't bet on Roulette - Blackjack is the most favourable to the player. Alternatively, learn to play poker.
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Old Jun 2, 2008, 11:26am   #9
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Don't bet on Roulette - Blackjack is the most favourable to the player. Alternatively, learn to play poker.
I don't like to steal money off my friends too often
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Old Jun 2, 2008, 11:52am   #10
 
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I don't like to steal money off my friends too often
Simple solution: don't play against friends.
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Old Jun 2, 2008, 12:09pm   #11
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Originally Posted by arabianights View Post
It's called the martingale system. Doesn't work.
See also "Gambler's Ruin"
I'm going to play devil's advocate here and say that the reason it doesn't work (in casino's) is only because the house has a maximum stake which will, sooner or later, take you out of the game. However, for traders, the maximum stake is the amount of equity in your trading account. So, for the sake of argument, let's say you have a system with a 60% success rate. Your only concern now is the probability of X number of consecutive losses. X will vary according to each individual trader's appetite for risk. The larger X is, the lower the probability. Once you've decided what that limit is, 100:1, 1,000:1 or whatever, you can then work backwards to calculate your initial stake. You then 'know' you'll either:
A. make money . . . or
B. lose the lot but only after the highly unlikely event that you have the maximum number of consecutive losses.
For someone with a small account who's looking to make fast gains and is prepared to blow their account - this might be the way to go. The probability that you'll make money must outweigh the probability of a complete blow up.
As I said at the start, I'm just being the devil's advocate and, doubtless, there are flaws in my thinking . . .

Tim.
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Old Jun 2, 2008, 12:11pm   #12
 
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The flaw is gambler's ruin.... the market has more money than you sadly.
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Old Jun 2, 2008, 12:33pm   #13
 
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Originally Posted by timsk View Post
I'm going to play devil's advocate here and say that the reason it doesn't work (in casino's) is only because the house has a maximum stake which will, sooner or later, take you out of the game. However, for traders, the maximum stake is the amount of equity in your trading account. So, for the sake of argument, let's say you have a system with a 60% success rate. Your only concern now is the probability of X number of consecutive losses. X will vary according to each individual trader's appetite for risk. The larger X is, the lower the probability. Once you've decided what that limit is, 100:1, 1,000:1 or whatever, you can then work backwards to calculate your initial stake. You then 'know' you'll either:
A. make money . . . or
B. lose the lot but only after the highly unlikely event that you have the maximum number of consecutive losses.
For someone with a small account who's looking to make fast gains and is prepared to blow their account - this might be the way to go. The probability that you'll make money must outweigh the probability of a complete blow up.
As I said at the start, I'm just being the devil's advocate and, doubtless, there are flaws in my thinking . . .

Tim.
Hello Tim,

Interestingly, the process you put forward is similar to how I would determine when my mechanical system is not longer "in tune" with the Markets and as such should be switched off.

If you know the losing % of your system, you can easily calculate the number of consecutive losses that you would encounter at some point.

In addition, this process is a very good way to calculate ones risk per trade. All you need to know is the losing % and the MaxDD you would accept beforehand.

All IMO,

Chorlton
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Old Jun 2, 2008, 5:45pm   #14
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Hi,

IMO blackjack is not the most favourable to 99.5 no make that 99.9% of players for the simple reason that in my experience players will not play as they should on every hand, fear, greed and or a lack of knowledge increases their statistical loss considerably.

Roulette on the other hand they cant split double or stay or take a card when they should or shouldn't so they cant affect the odds. Incidentally, please dont slate me for saying this, but there is a method using standard deviation which changes the house advantage over to the player however it is quite boring, actually extremely boring and even if you were to assume a spin every minute which doesn't happen then it would take you 10's of hours of straight playing to make it worthwhile! See if you can figure it out, I will post it up when I can remember it

Regards

p.s I did not figure it out I found it on a website of probabilities must be 10 years ago
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