Roulette Wheel of Forex

[Sang Froid]

So, my mate who knows I trade forex came up with a 'bright idea' of playing roulette online and splitting the profits. He asked me for some advice on how to go about it and if there were any principles we could transfer from forex to roulette. Money management I said is key. Knowing when to call it quits is a must as is only risking a certain percentage of our initial capital per bet. We came up with the following rules:

1)Wait for 5 consecutive colours say for instance... red
2)Bet 5% of initial capital on opposite colour.... in this case black
3)If it's a loser then double your stake again for a MAXIMUM of 3 consecutive losses
4)On the fourth loss in a row call it quits for the day.

We started of with £100, and over the course of two days we turned this into £500... this is it I thought... forget forex I can do this everyday for a living.

Needless to say over the course of half an hour we then gave it ALL back to the house.

Now here's the question.... roulette is completely random.... gamblers fallacy took over us, at one stage we had 10 consecutive blacks with a zero thrown in for good measure. It's always 50-50 yet the odds are firmly in favour of the house.

Can and do you swing the odds in your favour when you're trading or is it gamblers fallacy again using indicators/price action, fundamentals, technical analysis etc.....

As many of you may know I've never achieved consistency in my trading, however for the past 3 weeks I've found a strategy that I like and that I'm getting very good consistent wins with, I've applied my good MM and have a good RR ratio.....

Is this my £100 to £500 and am I destined to give it all back

 

[oildaytrader]

So, my mate who knows I trade forex came up with a 'bright idea' of playing roulette online and splitting the profits. He asked me for some advice on how to go about it and if there were any principles we could transfer from forex to roulette. Money management I said is key. Knowing when to call it quits is a must as is only risking a certain percentage of our initial capital per bet. We came up with the following rules:

1)Wait for 5 consecutive colours say for instance... red
2)Bet 5% of initial capital on opposite colour.... in this case black
3)If it's a loser then double your stake again for a MAXIMUM of 3 consecutive losses
4)On the fourth loss in a row call it quits for the day.

We started of with £100, and over the course of two days we turned this into £500... this is it I thought... forget forex I can do this everyday for a living.

Needless to say over the course of half an hour we then gave it ALL back to the house.

Now here's the question.... roulette is completely random.... gamblers fallacy took over us, at one stage we had 10 consecutive blacks with a zero thrown in for good measure. It's always 50-50 yet the odds are firmly in favour of the house.

Can and do you swing the odds in your favour when you're trading or is it gamblers fallacy again using indicators/price action, fundamentals, technical analysis etc.....

As many of you may know I've never achieved consistency in my trading, however for the past 3 weeks I've found a strategy that I like and that I'm getting very good consistent wins with, I've applied my good MM and have a good RR ratio.....

Is this my £100 to £500 and am I destined to give it all back

If you trade only on strong trending days like today , there is an advantage in your favour.unfortunately finding days like today involves sitting infront of computer doing nothing for days.Keep your risk small and reward high and you will come out better off.

 

[Sang Froid]

Believe you and me, I spend almost every waking minute staring at monitors. I've no trouble there. And yes recently I've had my good days and my bad days trading, more good than bad and for the first time ever I've had three consecutive weeks of profit.

My MM side of my trading has been sorted as has my discipline and I've found an almost mechanical way of trading that suits me. I guess I am just worried that akin to the roulette play I had, this is my winning lucky streak and I'm going to give it all back soon. No matter what the house always wins, always, in the end they win. If you can swing the odds even slightly in your favour trading then I guess that is where it differs from roulette, no matter what the odds are always against you in roulette.

I guess this is the 'edge' I here so often banded about....

I wonder what MY edge is.

 

[Waterfield]

Firstly, go to betfair and use the no-zero roulette board (in the zero lounge). Make's it 50/50 each time, wiping out some of the house advantage. Secondly use a bonus, if you're going to waste your money in a casino may aswell half what you were originally going to spend and use their margin. Thirdly, the roulette table doesn't have a memory, ofcourse 10 blacks in a row may seem improbable but i've seen 12 in a row before, and many 10 blacks/reds in a row before. Lastly, you said you used money management, did gamblers fallacy come into this? Ie, when you were losing you increased stake size, when you were winning you decreased it. If you were to ever try again, maybe do the boring task of waiting for 8 blacks in a row, and use 1%, you will last longer, but it doesn't mean you won't see another 8 blacks after that.

You usually get a £50 deposit bonus with betfair, but there's an offer on for £5 no deposit plus the deposit bonus of £50 if you are still interested in giving it a go. Just make sure you only play the zero lounge games! (I've withdrawn over £100 from these, which is just luck, but it's more than I can say for my horse scalp trades...).

Edit: I was a bit quick to post and notice you said gamblers fallacy was to do with analysis paralysis, or implied it. This is not true. The only thing to swing the odds in your favour is experience.

http://en.wikipedia.org/wiki/Gambler's_fallacy - good bit at the bottom to do with psychology.

Also you mentioned you gave it all back to the house, I think that along with a good strategy you need discipline. You had a rule in place, which was after 4 in a row you would stop. You didn't! You got greedy!

As soon as you look after the money which you are prepared to lose the rest looks after itself.

 

[kwickwool]

Sorry mate but anyone who thinks they can produce a system of winning on a roulette wheel does not understand the game. Lets be clear about this, there is no such thing as a system on a totally random even such as roulette. Just because a black has come up 20 times it still has the same probability of coming up again, i.e. 50:50 if you take the zero out. You are looking at the law of averages in coming up with your system which states that over time the number of reds to blacks will be virtually equal, but the numbers involved here means that you can almost forget this as it has no bearing on this type of system.

Trading is totally different, you are looking for signals that increase the probability from 50:50 in either direction to maybe 60, 70, 80% in your favor, looking for overbought or oversold points etc, that is not random but very much a statistical science that if you pay enough attention to will pay in time.

 

[oildaytrader]

Trading is totally different, you are looking for signals that increase the probability from 50:50 in either direction to maybe 60, 70, 80% in your favor, looking for overbought or oversold points etc, that is not random but very much a statistical science that if you pay enough attention to will pay in time.

Failed trends and breakouts or support and resistance turning points failure can also happen more than 20 times in a row.I have seen it happen, nevertheless there is an edge for everyone.Only the trader knows his edge.

 

[squall321]

There's nothing special about 5 blacks, other than it looks pretty.

The probability of getting black-black-black-black-black is exactly the same as the probability of getting red-black-red-red-black.

The only difference is that pattern is interesting and the other no one cares about.

 

[wackypete2]

Since roulette is completely random and the house has its mathematically built in advantage there is no way over the long term for a gambler to overcome it. You cannot transform a negative expectancy into a positive one simply by changing the size of your bets. Each individual bet has exactly the same percentage house advantage.

For those who care to try anyway....just like trading, in roulette the trend is your friend. If you catch a small trend and increase bets as you are winning you can amass a nice pocketful of money rather quickly. Of course this can only work over a short term. A true winner would know when to quit while ahead and go home.

Peter

 

[montmorencyt2w]

Since roulette is completely random and the house has its mathematically built in advantage there is no way over the long term for a gambler to overcome it. You cannot transform a negative expectancy into a positive one simply by changing the size of your bets. Each individual bet has exactly the same percentage house advantage.

For those who care to try anyway....just like trading, in roulette the trend is your friend. If you catch a small trend and increase bets as you are winning you can amass a nice pocketful of money rather quickly. Of course this can only work over a short term. A true winner would know when to quit while ahead and go home.

Peter

I know nothing about roulette, meaning that I have never played it or watched it for real, but the idea that you could have a trend defies both common sense and probability theory. I don't see how anyone could "know" when to quit.

 

[wackypete2]

I was just trying to relate it to trading, except you can't have a wining edge in roulette. A trend would equate to say 4 or 5 of the same color in a row. Theroetically, there would be no mathematical reason why a "trend" would or would not continue. But instead of increasing bets after every loss, you doubled up after each win. Knowing when to quit is like anything else in life...walk away if and when you are ahead, not after you lost everthing. Sorry, maybe I was unclear.

Peter

 

[Sang Froid]

... Just because a black has come up 20 times it still has the same probability of coming up again, i.e. 50:50 if you take the zero out. You are looking at the law of averages in coming up with your system which states that over time the number of reds to blacks will be virtually equal.....

Yes you're right it does still have the same probability of coming up again, but using a Martingale betting strategy eventually it has to change and when it does you're still a winner, just need to make sure next time that I only risk a small percentage of my account to make it's not blown.

Roulette is random everytime, there is no traders psychology involved with trends etc... with trading the market can be trending over a long period of time depending on what TF you're looking at, with roulette it's gonna change and usually very quickly.

 

[Trader333]

Yes you're right it does still have the same probability of coming up again, but using a Martingale betting strategy eventually it has to change and when it does you're still a winner

You will need unlimited funds to make this work.


Paul

 

[everyonerich]

make a deal with croupier.. most of the time they can control the outcome. but its not 100%

 

[Sang Froid]

You will need unlimited funds to make this work.


Paul

How so? Apply similar principles of trading to a typical night on the roulette table, think of it as scalping almost.

Actually thinking about it yes you're right, exponential growth means a Martingale strategy might be a too 'hefty' whack. How about these apples then:

Fund account with £100, wait for 6 consecutive colours in a row, bet a maximum of £10, win or lose go back to waiting for 6 consecutive colours, if it was a win then DOUBLE your bet next time, Keep doubling until you have a loss then go back to £10 again.

Like trading you're waiting for the trend, then you're waiting for the break.....

damnit, as I'm writing this I don't think this will work either, so on the first bet I've risked £10 to make £10, say it's a winner, then on the next bet I'm risking £20 to make £20 but say it's a loser I've then I've lost that £10 I made on the previous trade (bet.. habit) so I'll be down to £90 straight away........

:idea: You can't have a strategy for roulette, nothing works, it's pure luck, you win some you lose some, trading however has other traders psychology that you can read on the charts, every candle every pivot point, every S/R line tells a story of other traders emotions and fears. The roulette table has no emotions or fears, it just drains your money very quickly.

 

[shadowninja]

Give it a go on a demo account if you really think roulette can be beaten. The edge is definitely with the house if the table has a zero. I've toyed with MM strategies excluding Martingale as the house imposes a maximum bet usually because they know about Martingale; again, even if they didn't you need an infinite size account to include the possibility of a massive drawdown. With good MM you just take longer to lose everything.

The only way to "beat" the house is if you get lucky initially, take the money and run. They will get it back from others on average. The danger arises when you think you have something.

 

[Splitlink]

trading however has other traders psychology that you can read on the charts, every candle every pivot point, every S/R line tells a story of other traders emotions and fears. The roulette table has no emotions or fears, it just drains your money very quickly.

I, probably, am a gambler without admitting it! Life is one big gamble, isn't it? I don't believe that those billionaires listed in today's press, though, did much more than the first gamble that came right for them, in the end.

Therefore, once I had established a financial buffer underneath me I'd try not to take any more chances with the proceeds. Perhaps a percentage, but none of the doubling up that you mention. Statistics simply are not in your favour.

With respect to the part of your post that I have quoted, The market is governed by all of us. How do we know where it is going to turn? It depends on all those billionaires and we follow on by reading the charts. To me, a chart gives me an idea on where the market could be heading but the individual trader's psychology cannot be reflected by support lines or anything else. That's a load of boll0cks, especially in the lower timeframes.

All we can do is follow our own reasoning and there is not much point in trying to explain it to anyone else, because it is like party politics. You, either believe it, or you do not.

When I was studying for my examinations, I used all sorts of weird and wonderful ideas to memorise stuff. One day, I was asked how I did that and when I told them that it had something to do with my Mum's grocery list the question was hastily passed to someone else.

 

[trendie]

the odds are going to be less than 50/50.
if there is one green zero, and 1-36, thats 37.
your chances are 18/37 on a black/red. thats about a 2.7% edge the casino has.

however, whereas in roulette you risk a certain amount, you lose that immediately, and fully, trading is different in that you can determine your risk.

in trading, you have the option of taking a greater than 1/1 return. the equivalent of deciding to change the return odds.

also, given the time-frame, you also have the option of bailing out at less than the amount risked.
in that, if you notionally risk x%, you could, if you wished, walk away after a lesser loss, if you chose. (ie, if you initially decided to risk 20 pips, you could later decide to change this to 10pips) this would be the equivalent of looking at the ball bobble about, and decide to take part of your stake off the roulette table if it was bobbling in the wrong quadrant of the wheel.

under those conditions, the roulette wheel would be just as random, but open to some judgement, and thus skill, and thus edge.

I believe that recently somebody used some kind of laser device to determine the spin of the wheel, speed of ball, etc, and used physics to dtermine which quadrant the ball was most likely to come to rest in. This is only interesting since the casino lost money, and called the police in. If such a technique didn't work, the casino would have happily allowed this to continue until the gambler lost all.

so trading could be related to roulette, and the initial odds are 50/50.
however, we can use judgement to watch the price bobble about, and decide to take some of our stake off the table, or decide to change the odds to better than 50/50, depending on where the ball/price bobbled on the wheel/chart.

 

[meanreversion]

The punter has only negative edge playing roulette, that's why the professional gamblers steer clear. Try something like blackjack --- you need one or two other people to help you with this --- your partner bets small but when he notices a high number of high cards being dealt, he signals to you to come and join the table. Anyhow, watch "21" with Kevin Spacey for the details on how to work this system. Oh, and how they'll smash your face in when they catch you.

 

[montmorencyt2w]

The punter has only negative edge playing roulette, that's why the professional gamblers steer clear. Try something like blackjack --- you need one or two other people to help you with this --- your partner bets small but when he notices a high number of high cards being dealt, he signals to you to come and join the table. Anyhow, watch "21" with Kevin Spacey for the details on how to work this system. Oh, and how they'll smash your face in when they catch you.

Yes quite. There are some casino games at which it is possible to win consistently using some kind of system, which, if successful, will lead to these "extra mural" ways of being countered.

Fortunately, at least for the time being, the spread betting firms have not resorted to these forms of discouragement.

 

[coolcat]

2 Consecutive RED/GREEN Daily Candlestick hypothesis

Just an idea: apply limited martingale(max 1,2) for lot sizes traded on Daily candlestick chart, e.g, dow index futures:

PreCondition: Say you have G,R,G,R,G (must be alternating colors) Daily candles chart(1 week).

So you bet 1lot on the 6th candle to be G (or R if it were R,G,R,G,R)...
If it's a win(exit on close G), wait for the next PreCondition to appear to restart
If not(exit loss on close R), wait for the next appearance of G to place 2lots bet on G.
for e.g, G,R,G,R,G...R!(lose),R,R,G, betG
Restart and wait for next PreCondition regardless 2nd bet is a loss or win.

Within 10 candles(2 weeks), there could be about 1-0.14 =0.86 probability of 2 consecutive same color daily candles? http://www.bjmath.com/bjmath/probable/flips.htm