ZenKinG

Joined: May 3, 2016
• Posts: 488
November 20th, 2016 at 10:43:04 PM permalink
Well we all know that the cards don't remember if you won or lost in the past and so long losing streaks and long winning streaks do occur. But if this is the case and the cards dont actually remember if you won or lost, does that mean once we hit a big win or big loss, we will never have the same target EV as our original simulation? I mean you always hear people say Risk of Ruin is a snapshot of your current state and after a big win or loss your risk is not the same anymore and you have to resize down or if you want to make more money resize up.

So let me go ahead and give an example here. Let's say you have an EV of 100k after 1000 hours. Your ROR is 0.5%. You get your bankroll together and finally hit the tables to start your career. Your first session, you outperform and make 5k in a couple of hours. Is it not fair to say, your EV will now be much higher than the 50k? I mean if we're using the same argument regarding ROR and having to resize down or resize up, isnt it the same with EV? Our original 50k projection has now gone out the window, no? Shouldn't we now expect to make more than 50k?

Look forward to hearing some of the math guys on this topic.
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RS
Joined: Feb 11, 2014
• Posts: 5333
November 21st, 2016 at 12:37:11 AM permalink
Not sure why you used 100k then later 50k EV figures, I assume this is an error and you meant the 100k for all of them.

If you project to play 1000 hours and project an EV of 100k (100/hour)....then if you play 5 hours and profit 5k, then you have 9995 hours to go. Your future EV is \$99,500, but since you're already at +\$5k, you could, at this point, say you expect to be at +\$104,500 for the year.

Imagine a line graph: EV and actual. Your future EV is always going to be the same (\$100/hour), assuming you don't alter your game plan. After 5 hours and being up \$5k, your EV for the 1000 hours would still be \$100k, but your projected profit would be \$104,500.
"should of played 'Go Fish' today ya peasant" -typoontrav
discflicker
Joined: Jan 1, 2011
• Posts: 375
November 21st, 2016 at 3:23:06 AM permalink
I'm not really a math guy, but this is question is simple basic statistics. No memory means no memory. Random means random. EV reflects the OVERALL expectation of value over an infinite number of iterations. When you say "cards", do you mean, for example, Black Jack? If all of the aces and tens are dealt from the top of the shoe, then yes, the EV changes for that shoe... but that is an expected fluctuation (a variance). EV is the average outcome of all of these variances over an infinite number of iterations, and so, by definition, never changes.

For you to recognize that a shoe is in a state of higher or lower EV requires you to be counting cards (recording the past history). In craps and Roulette, that won't help you, no matter what the past history of rolls is.

So, I think this is a matter of terminology, confusing overall EV with states of variance that you can take advantage of from shoe to shoe by counting cards.
The difference between zero and the smallest possible number? It doesn't matter; once you cross that edge, it might as well be the difference between zero and 1. The difference between infinity and reality? They are mutually exclusive.
RS
Joined: Feb 11, 2014
• Posts: 5333
November 21st, 2016 at 3:56:53 AM permalink
Quote: discflicker

I'm not really a math guy, but this is question is simple basic statistics. No memory means no memory. Random means random. EV reflects the OVERALL expectation of value over an infinite number of iterations. When you say "cards", do you mean, for example, Black Jack? If all of the aces and tens are dealt from the top of the shoe, then yes, the EV changes for that shoe... but that is an expected fluctuation (a variance). EV is the average outcome of all of these variances over an infinite number of iterations, and so, by definition, never changes.

For you to recognize that a shoe is in a state of higher or lower EV requires you to be counting cards (recording the past history). In craps and Roulette, that won't help you, no matter what the past history of rolls is.

So, I think this is a matter of terminology, confusing overall EV with states of variance that you can take advantage of from shoe to shoe by counting cards.

He's counting cards.
"should of played 'Go Fish' today ya peasant" -typoontrav
Wino
Joined: Dec 13, 2014
• Posts: 172
November 21st, 2016 at 5:06:04 AM permalink
ZenKing,

No, your 5K win in a couple of hours is good variance. The next measure after hourly EV in Blackjack we usually look at the Standard Deviation or probable size of the swings in the game that you are playing. If you are playing the same game with the same rules betting the same fixed spread, doing everything the same, your Expected Value does not change in the sense that you were asking. James Grosjean wrote an article called "It's all in the Denominator." I believe Standford Wong's 'Professional Blackjack' book explains EV, standard deviation, etc verbally quite well and is a great book.
Wanda Wilcox: “I can’t stand people. I hate them.” Chinaski: “Oh, yeah?” Wanda: “You hate them?” Chinaski: “No, but I seem to feel better when they’re not around.” Barfly, starring Mickey Rourke
ZenKinG

Joined: May 3, 2016
• Posts: 488
November 21st, 2016 at 8:41:16 PM permalink
Yes I read Grosjeans article and it was great indeed. I understand how EV works and what it means to have an edge and that you're never 'due' for anything but the point im making is this. When we lose a ton, people say our risk of ruin has changed and we must resize our bets down to avoid going broke, but when we make lets say a +5k win, our EV doesnt now go to 105k? I believe it does. If you read Grosjeans article, he would agree with me. His logic is along the same lines as my original post and I think I answered my own question. Your EV does change depending on short term results. Because if we resize for ROR in a short term swing, our EV should also adjust accordingly on a short term swing.
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ZenKinG

Joined: May 3, 2016
• Posts: 488
November 21st, 2016 at 8:42:22 PM permalink
Ahhh yes, sorry about that lol. I originally edited 50k and turned it to 100k for simple arithmetic and later forgot to change the rest of the parapgraph to match my 100k edit. Thanks for that. Hopefully the admin can edit my original post and change the 50k figures to 100k to avoid any confusion for anyone reading.
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mcallister3200
Joined: Dec 29, 2013
• Posts: 1151
November 21st, 2016 at 9:06:42 PM permalink
You're certainty equivalent increased and RoR decreases when you have the upswing assuming you're not resizing your bets, not your EV, unless you resize your bets to reflect the upswing. If you're increasing your bets proportionally of course the EV increases.
Romes
Joined: Jul 22, 2014
• Posts: 4116
November 22nd, 2016 at 8:14:53 AM permalink
I "playfully" brought this topic up and decided to make someone more/less show the math as to why in another thread. Find that other thread for some amusing banter as well as a lot of info on your topic. Spoiler: RS has the right reasons...

Quote: RS

Not sure why you used 100k then later 50k EV figures, I assume this is an error and you meant the 100k for all of them.

If you project to play 1000 hours and project an EV of 100k (100/hour)....then if you play 5 hours and profit 5k, then you have 9995 hours to go. Your future EV is \$99,500, but since you're already at +\$5k, you could, at this point, say you expect to be at +\$104,500 for the year.

Imagine a line graph: EV and actual. Your future EV is always going to be the same (\$100/hour), assuming you don't alter your game plan. After 5 hours and being up \$5k, your EV for the 1000 hours would still be \$100k, but your projected profit would be \$104,500.

Being up \$5k early just means you're more likely to be ABOVE the originally estimated EV... not that "you've got a lot of it early" etc.
Playing it correctly means you've already won.
ZenKinG

Joined: May 3, 2016
• Posts: 488
March 13th, 2017 at 11:23:03 PM permalink
Reviving an old thread as i started to think about EV again and positive fluctuations and hopefully someone can clear up my thoughts again.

I've come to realize that even if someone is experiencing positive variance and ends lets say +1SD for the year, it's just an illusion. I tend to have always played with some excitement in me because of the fact of shooting for being on the side of positive variance, but i just thought of something. Just like negative variance is an illusion and you will crawl your way back 'up' to EV, isnt positive variance an illusion as well and you will crawl back 'down' to the mean? Should I not even enjoy positive fluctuations anymore knowing i will just crawl back down to the mean over time just like i dont worry about negative fluctuations knowing i will crawl back up?

Now I have read Grosjean's article about the 'Denominator" and that you're never 'due' to lose BUT if EV is a fixed amount and never changes(assuming of course you dont change your bet sizes) wouldn't you always regress back to the mean if let's say you were on the far right side of the curve for the year? Wouldnt the next 500-1000 hours for example revert you back to the mean and under-perform for the next year?

Am i falling into the 'gamblers fallacy' argument?

Or does having an edge give you potential for being farther ahead than EV while also protecting you from ever being under EV given of course a long enough sample size?
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