Winning with Standard Deviation

Standard Deviation says you will deviate. It does not guarantee in which direction. There is no guarantee that you will be ahead at any point... the Wizard has pointed out that no such certainty is true in a negative expectation game out to infinity.

PS: since this fallacy has come up before, maybe the WoO should put it in his FAQ's

Quote: odiousgambit

Standard Deviation says you will deviate. It does not guarantee in which direction.
PS: since this fallacy has come up before, maybe the WoO should put it in his FAQ's

I think it is a matter of my not wanting to acknowledge the fallacy.

Its a matter of expectations and desires. I go into the singles bar hoping for this stunning blond to walk right up to me, hand me a map to her home and say to me "My place, now... and don't still be there when I wake up". What happens is that sometimes a demented bag-lady is the only one who wants to extend any such invitations and sometimes I just guzzle booze until my chin bumps the foot rail. I keep waiting for that stunning blond though! Intellectually I understand it ain't gonna happen, but I have hope.

After four Reds in a row, ... I start to think well now in real life its still fifty-fifty on that next spin (oh, forget that darned green, will you!), yet I think that somehow FIVE reds in a row is less commonly encountered in real life so I should bet on Black because its a more realistic expectation. The trouble is that FIVE reds in a row still does indeed happen. We think our luck will change, we think that Stunning Blond will in fact appear and that tonight will be the night it happens.

I swear almost every time I hit 16, I lose. Yet, I continue to do so because it is right. I swear every time its a Tie in Baccarat all I have to do is wait one hand and then it will be a tie again. So I finally give in and make the massive Tie Bet but then have it turn out to be two hands before the next tie! Serves me right for believing in "trends" in Baccarat.

Well, the alcoholic fog of the Thanksgiving Wine is starting to wear off, time for me to find out: Is it stunning blond lying there or is it demented bag lady lying there... or am I alone in the bed and merely have a sore chin? ... Oh well, sore chin yet again!!! Why must Lady Luck always frown on me.

Think of it this way. When the standard deviation is zero, you have an absolute. For example, the money under your matress will always be there. You know how much is there, and the standard deviation of that is zero.

Martigaling is a great example of "trying to beat the standard deviation" by always doubling your bet. The problem is that you will always run into the situation where you lose your entire session before the martingale "recovers". That said, standard deviation tells you how LIKELY it is to be within a certain range of expected values (note, not how LIKELY you are). Where you land on that graph is effectively the contribution of your sample. You can land on the right side of expected value and be "lucky" or you can land on the far left of the graph (broke).

The problem with this which is the great thing for casinos is that people are very much limited on the left side (the losing side) to their session limits while there is no limit on the right side of the graph. This (and alcohol) allows for the casino to take back your money. Most players, after experiencing positive standard deviation, will just keep playing until they approach the middle of the graph and lose their money back. Yes, it's possible to get another royal flush right after you hit the first one, but you've got to realize that you've just been lucky and that the likelihood of getting the next one has nothing to do with the last one.

Good gamblers (those with excellent money management skills and realize when they are experiencing "positive variance") will recognize these events and manage their sessions carefully. I would say that the top skills at the casinos are knowing the strategy for your game and sticking to it, and money management.

Quote: boymimbo

Think of it this way. When the standard deviation is zero, you have an absolute. For example, the money under your matress will always be there. You know how much is there, and the standard deviation of that is zero.

Martigaling is a great example of "trying to beat the standard deviation" by always doubling your bet. The problem is that you will always run into the situation where you lose your entire session before the martingale "recovers". That said, standard deviation tells you how LIKELY it is to be within a certain range of expected values (note, not how LIKELY you are). Where you land on that graph is effectively the contribution of your sample. You can land on the right side of expected value and be "lucky" or you can land on the far left of the graph (broke).

The problem with this which is the great thing for casinos is that people are very much limited on the left side (the losing side) to their session limits while there is no limit on the right side of the graph. This (and alcohol) allows for the casino to take back your money. Most players, after experiencing positive standard deviation, will just keep playing until they approach the middle of the graph and lose their money back. Yes, it's possible to get another royal flush right after you hit the first one, but you've got to realize that you've just been lucky and that the likelihood of getting the next one has nothing to do with the last one.

Good gamblers (those with excellent money management skills and realize when they are experiencing "positive variance") will recognize these events and manage their sessions carefully. I would say that the top skills at the casinos are knowing the strategy for your game and sticking to it, and money management.

Unless you are playing a game with a positive expected value, I don't think money management changes much. Sure, your artificially created 'sessions' will tend to have more frequent wins but in the end you are really playing one big session that includes every smaller sessions you every played. Probabilities don't take a break the moment you leave the table.

Quote: HKrandom

Unless you are playing a game with a positive expected value, I don't think money management changes much. Sure, your artificially created 'sessions' will tend to have more frequent wins but in the end you are really playing one big session that includes every smaller sessions you every played. Probabilities don't take a break the moment you leave the table.

I've been continually amazed by how many people, including on this board, don't realize this. You lose $3,000 in a weekend--and you rationalize that by breaking it up into fifty-three "sessions", thirty-four of which you "won". Or you play blackjack for forty minutes, but every time you stop to take a sip from your drink, that's a new "session". Sessions don't mean a thing--only the bottom line.

I have a 10% session goal an it works for me, and my system is backed up by CV Data Sim simulation software.

And to answer your question I have to reluctantly disagree with the math professionals who have responded to the post.

If you play with a session goal in mind you are greatly reducing any high negative and high positive variance swings. Although you are forfeiting some high positive variance swings you might encounter as well as dreaded negative variance . But when I look at session goals I see the words better safe than sorry. And if you get all your session profits in a cashiers check and send them to yourself you can never really go bust can you...

And your question about law of chance rewinding... no the law of chance is always the same however leaving in the middle of the deck and starting over at a new casino and new deck does start the variance at zero again.

Now I know I am probably going to get heat from this but I don't care. I post what I think....

Quote: blackjackgolden

... starting over at a new casino and new deck does start the variance at zero again ... I post what I think....

... better to stay quiet and be thought a fool than to open your mouth (post) and remove all doubt ...

Variance does not start over. A constant is a constant. Variance is a constant, defined based on the probabilities of the various outcomes, the outcomes themselves, and the overall expected value of the game.

17 starts over ... when you walk into a new casino
The speed of light starts over ... when you walk into a new casino
The number of senators starts over ... when you walk into a new casino
The radius of the earth starts over ... when you walk into a new casino

It doesn't even make sense ...

--Ms [Happy F&^%'n Holidays] D.

Really so If I get my session goal in one casino and stopped when the variance wasy high positive, when I walk into another casino it is going to high positive again instead of slightly negative... Is that what your saying so your saying if I leave a casino with high variance I should start my bet at out at the next casino big because the casino I just left the variance was high positive...

Quote: blackjackgolden

Really so If I get my session goal in one casino and stopped when the variance wasy high positive, when I walk into another casino it is going to high positive again instead of slightly negative... Is that what your saying so your saying if I leave a casino with high variance I should start my bet at out at the next casino big because the casino I just left the variance was high positive...

You have no idea what "variance" means ... go take a high school course in statistics ... or read a little bit ... just educate yourself instead of glorifying your ignorance on these pages...

A CONSTANT is not something that gets high or positive or anything else, it's just a f&&k'n constant value defined for a game ... Do you think the numbers 1,2,3,4,5,6 on the dice change when you go from one casino to the next? No, they're constants. Get it? Variance is a CONSTANT. Moreover, it is a constant that is NEVER NEGATIVE.

For example, the variance for playing the Banker in baccarat is 0.86. The variance for one hand of Let it Ride is 26.73. The variance for betting on one number, straight up, in roulette is 33.21. These numbers don't change ... they don't get high positive, or negative, or start over. They are just CONSTANTS.

I have no idea what you are talking about, and neither do you.

Read about Variance on Wikipedia, demonstrate to yourself that you understand it by computing the variance for a few casino games, then return and let's see what you have to say ...

Wikipedia article on variance

--Ms. D.

DorothyGale, what does it mean that the variance for strait up in roulette is 33.21? French(singlezero) or American roulette?

Sorry, I read wikipedia but it is hard to catch some formulaes.

Is the variance calculated for a certain trials? 33.21 is for 1 trial?

I know that 1 standard deviation is the square root of the variance, but in standard deviation you measure a group of numbers along a sample to check for a abnormal deviaton.