Joined: Dec 11, 2013
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December 11th, 2013 at 3:45:12 PM permalink
I understand that systems do not work...this is not a question about a particular betting system.
If I take $10,000 to a casino each day, (and using my system) I want to win $250 and then leave....I am prepared to lose the 10K, and will stop when I am up $250. The question is, if I have more than 40 winning sessions (which puts me over the 10K at risk), and then I lose the 10K, is that system still not a "winner" due to the fact that I won more than I lost using a system?

In other words, if I regularly have 50 winning sessions before I lose the 10K, then I am up $2,500 each even though the system fails me 1 out of every 50 sessions, it still "works" since I am up after it fails me.

Can you please shed some light on that?
Is it basically a situation where I can have 100 winning sessions in a row (or 1,000 for that matter), but that over time the system will fail me more frequently than once in 50 or 40 resulting in a net loss?

Much appreciated!
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December 11th, 2013 at 3:49:11 PM permalink
You gotta love these questions. :)
Fighting BS one post at a time!
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December 11th, 2013 at 4:03:55 PM permalink
The answer to your question is that a system which will win $250 49 out of 50 times and loses $10,000 1 out of 50 times, would, in fact, be a winning system. For negative EV games, no such system exists.
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December 11th, 2013 at 5:58:11 PM permalink
Quote: aussie88

Is it basically a situation where I can have 100 winning sessions in a row (or 1,000 for that matter), but that over time the system will fail me more frequently than once in 50 or 40 resulting in a net loss?

In short, you can get lucky. Even repeatedly lucky. Buy eventually, the math will catch up to you.
I invented a few casino games. Info: 覧覧覧覧覧覧覧覧覧覧覧覧覧覧覧覧覧覧 Superstitions are silly, childish, irrational rituals, born out of fear of the unknown. But how much does it cost to knock on wood? 😁
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December 12th, 2013 at 4:21:00 AM permalink
The usual answer is to speak of "long term" results. Personnally, I agree with Keynes that "in the long term we're all dead". So is there some other explanation?

Yes. The explanation is that most people have it hard to reason probabilitistically (does that word exist?). The ones are looking at their result and say "I have won, so the system is winning". The others say "the average is the only meaningful result, so the system is losing". Both are misleaded. The former confuse ex post certainty with ex ante uncertainty. The latter are swapping deterministic average for random variance.

One-shot results are not probability (anymore). Average is not probability.

Two examples:
1. I was playing cards with my students. I was applying some strategy based on my knowledge of probability, they were acting more "at a feeling". As it happens, I lost, and they were quick to boast "See? Your probabilities are worthless." They were incapable of admitting that this is just bad luck; that a "winning" system may sometimes lose.
But I was wise to not point out that "in the long run" I would win. There was no long run. The game was over.

2. I won the lotto. Lotto is definitely a negative edge gamble (-50% in my country). Yet I won.
Now I can play again and again all my life, I will not lose as much as what I have won. The long run will NOT reestablish negativity.
Again, luck, hazard, risk, randomness, stochastic, probability.

Actually, the "negative average" crowd are somehow committing a sort of Gambler's Fallacy, by assuming (although implicitly) that the "long run" will reestablish averages. It will not. When I have lost an amount, it is lost forever and the future is independent from it. So when you have won your $2500, this is yours forever. The next games start afresh. They will NOT fail you more frequently.

Better to look at it from the casino's point of view. They are sure to win. So if you lost, someone else has lost more than you won. This someone could have been you. You were lucky to fall in your shoes, but A PRIORI the game was unfair.
Reperiet qui quaesiverit

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