# Strategies for 50% system e.g. Anzac Day 2up



## RazzaDazzla (24 April 2010)

Happy ANZAC long weekend to everyone, especially diggers past, present and future.

I love a beer and a game of 2up on ANZAC day with my mates. It got me thinking; what is the best or most appropriate strategy to apply to a situation where you are guaranteed to be correct 50% of the time? That is, what money management strategy could one use to gain a positive expectancy?

Please don't anyone think I am trying to get rich from a game of 2up, but I'm sure the same strategies could be applied to any investing/trading system that encompasses being 'right' 50% of the time.

I am also well aware that this could not be applied to casino games as the casino obviously have their 'edge' e.g. 0 in roulette etc.

My first thought was to use a fixed fractional position sizing. So I did some playing around with Excel. I used random numbers and kept track of my Max drawdown and equity highs over a thousand or so coin tosses. I experimented with position sizing from 1% to 10%. Failure. Even if only risking a set % of your capital, you will eventually go bust. I began thinking and I relaised that this is because you are risking 1R and the most you can win on a single toss is 1R. So therefore, no opportunity to let your profit run.

So then I began thinking about capturing a 'trend' of heads or tails. We all know they happen. Trends of 5 o more heads or tails.

So I am now thinking about a system that would identify a trend, take advantage of it for as long as possible and not lose everything when the trend changes.

So it would need to be based on an ANTI-Martingale as we want to increase R  as we get on a trend. That is, we don't want to double our bets if we lose, as  a $10 bet very quickly turns into a $320 bet!

If we simply double R on each win, this is fine, but when we eventually lose, we will lose all built up profits and our initial R.

So; What strategies would one suggest so that you can capture a trend but take profits along the way so that when the trend changes, you still show some profit?


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## So_Cynical (24 April 2010)

All of the big wins ive seen with this type of gambling were trend following wins, 2 examples ive seen are...The big single bet after a run of 3 or 4 heads/tails in a row...and waiting for 2 consecutive identical outcomes and simply following without question, always betting the same amount.

The latter works great when you stumble on to a consecutive run of over 10 in a row and just keep following...ive seen 14 heads in a row once.


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## tech/a (24 April 2010)

This is worth a look.

http://www.averagejoeblackjack.com/Progressivebetting.html


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## RazzaDazzla (24 April 2010)

Thanks for the replies guys. I can testify to people losing big using martingale! Seen plenty a punter double there losses because "surely this can't be a tail!"

Ride the trend then perhaps bank 1/2 your profits after say 3 wins in a row and continue riding might be the safest, simplest to follow system after a few ANZAC schooners.


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## gav (24 April 2010)

Good luck with your 2up tomorrow Razza, let us know how you go.

PS.  You have a PM.


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## RazzaDazzla (24 April 2010)

I need a wet wish to jump out of the screen and slap me when I have a PM. I always miss them!


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## nunthewiser (25 April 2010)

This all well and good.

After 15 beers around the 2 up ring and good company it wont matter what system one uses .

Have a great day doing it.


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## nioka (25 April 2010)

Here is a system that has always paid off for me.

More people back heads than back tails.

Therefore only back tails. 

Only place a bet when the odds are in your favour.

The odds of tails are in your favour for tails after two consecutive heads.


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## So_Cynical (25 April 2010)

nioka said:


> Here is a system that has always paid off for me.
> 
> More people back heads than back tails.
> 
> ...



Errr no...that's how you go broke...coins/dice have no memory, people do and think there cant possibly be a 3rd 4th and 5th etc etc head/tail - odd/even...even after 20 heads in a row the mechanical/mathematical odds haven't changed.

Follow the trend/run and clean up...bet against it and go broke.


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## nunthewiser (25 April 2010)

So_Cynical said:


> *Errr no...that's how you go broke...coins/dice have no memory,* people do and think there cant possibly be a 3rd 4th and 5th etc etc head/tail - odd/even...even after 20 heads in a row the mechanical/mathematical odds haven't changed.
> 
> *Follow the trend/run and clean up*...bet against it and go broke.




this contradicts itself.

enjoy the beers and enjoy the 2up for the 50/50 game of chance it is.

speaking of which, i better go slip into my lycra jumpsuit and go raid the donation box to blow some cash this arvo/evening.


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## jaydebono (25 April 2010)

nioka said:


> Here is a system that has always paid off for me.
> 
> More people back heads than back tails.
> 
> ...





Hi Nioka,

This is flawed thinking, every single time a coin is tossed, it is a 50/50 chance it will land on heads or tails.

It is common for gamblers to think "its been heads 7 times in a row, that means it is more likely it is going to be tails next time".

What is the chance of it landing on tails next time? It's 50%. The chance for it to land on tails never goes above 50% or below 50%, it is always 50%. You may have had good luck using your "system" when you played so far, but thats all it was, luck. Every time you won the 50% landed in your favor, but you never had a greater chance then 50% to win. (Neither did you have a lower then 50% chance to lose.)


A friend of mine once got suckered into the martingale theory, after purchasing literature on the subject, and they trotted out a theory about "murphy's law" stating that in the game of roulette, the ball would never land on red or black more then 7 times in a row.

He would bet red or black and if he lost, he would simply double his bet, and keep going until he won and made back his money. 

Guess what happened? He made some profits over a 6 month period, until one day he ran into a trend where the ball hit red for 21 straight plays.

He was out after the 16th hit and lost $32,768, which was all of his money.

He stayed at the table to see when it would switch back, because surely it must go back to black soon, the odds are too great for it to stay on red!

It stayed on Red for 5 more spins (the 21st spin), if he had the money to keep going he would have now been spending $1,048,576 on 1 spin.

So on the 22nd spin he would have needed to bet $2,097,152 to finally make back his money.

So you can use these sort of systems if you have infinite money, but if you had infinite money you wouldnt be playing, would you? 

You can do all sorts of simulations in excel to try out these theories, eventually you will hit a trend that breaks your account. The longer you play, the more likely you are to hit it.

So to me, I think the best way to play is to just do 1 bet, you have a 50/50 chance.

BTW if you are playing roulette IMO the best way to play is to do just one bet, and put half your cash on 1st 12 & half on 3rd 12, you are giving yourself a greater chance to win. (however you are halving your return).

If I wanted to make $1k at gambling, the safest bet to me is to do 1 bet, put $1k on 1st 12, $1k on 3rd 12 and hope the 66% (or its just under 66% chance because of 0) hits in your favor.


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## So_Cynical (25 April 2010)

nunthewiser said:


> this contradicts itself.




How so? the mathematical odds are always the same 50/50 regardless of previous results....the punter comes undone because he "thinks" XYZ cant happen again due to previous results.



jaydebono said:


> If I wanted to make $1k at gambling, the safest bet to me is to do 1 bet, put $1k on 1st 12, $1k on 3rd 12 and hope the 66% (or its just under 66% chance because of 0) hits in your favor.




Safest bet by far would be to leave the casino and log into your online broking account  and buy quality stocks after large sell downs (bad news) and simply wait for the inevitable. 

---------------------------

Not Directed at anyone in particular...Always amazes me how on a forum that deals with the world biggest casino, there are so many posters who don't understand the basics of gambling.


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## jaydebono (25 April 2010)

So_Cynical said:


> How so? the mathematical odds are always the same 50/50 regardless of previous results....the punter comes undone because he "thinks" XYZ cant happen again due to previous results.
> 
> 
> 
> ...




Agreed. Which is why I am here and not at Star City Casino.


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## Chris45 (25 April 2010)

jaydebono said:


> This is flawed thinking, every single time a coin is tossed, it is a 50/50 chance it will land on heads or tails.
> 
> It is common for gamblers to think "its been heads 7 times in a row, that means it is more likely it is going to be tails next time".
> 
> What is the chance of it landing on tails next time? It's 50%. The chance for it to land on tails never goes above 50% or below 50%, it is always 50%.



Shouldn't your thinking be:
probability of 1 head = 0.5
probability of 2 consecutive heads = 0.25
probability of 3 consecutive heads = 0.125
etc

Therefore the probability of getting a tail after a run of 7 consecutive heads = 1 - 0.5^8 = 0.996 ie 99.6%


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## So_Cynical (25 April 2010)

Chris45 said:


> Shouldn't your thinking be:
> probability of 1 head = 0.5
> probability of 2 consecutive heads = 0.25
> probability of 3 consecutive heads = 0.125
> etc




I've yet to see a game of two up or roulette where you can bet on consecutive outcomes...have you?


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## Chris45 (25 April 2010)

So_Cynical said:


> I've yet to see a game of two up or roulette where you can bet on consecutive outcomes...have you?



True, and I was probably stating the obvious but I was just thinking about why some people start to get excited after a run of heads and think, "The next one's GOT to be a tail". Of course (as you said) each toss is a 50/50 event and there's no point when a tail is guaranteed - basic high school maths. (Unless you use one of Nun's coins.  ... oops sorry Nun )

Must confess I'm not a 'gambler' for that reason and I fully agree with your advice in #12.


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## nunthewiser (26 April 2010)

nunthewiser said:


> *enjoy the beers and enjoy the 2up for the 50/50 game of chance it is.* .








So_Cynical said:


> How so? the mathematical odds are always the same 50/50 regardless of previous results.... ---------------------------
> 
> .






Chris45 said:


> basic high school maths. (Unless you use one of Nun's coins.  ... oops sorry Nun )




You guys obviously cant read to well.


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## wayneL (26 April 2010)

http://en.wikipedia.org/wiki/Gambler's_fallacy


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## gav (26 April 2010)

So_Cynical said:


> Safest bet by far would be to leave the casino and log into your online broking account  and buy quality stocks after large sell downs (bad news) and simply wait for the inevitable.




And what happens if these "quality stocks" fall further after you buy?  Do you keep buying all the way down?  Do you hold on tight because they'll come back?


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## RazzaDazzla (26 April 2010)

Hope you tossers had some luck in the 2up ring!

I backed a guy who threw 5 consecutive heads. The ring was going ballistic with tail betters because they thought "he can't possibly throw another head!"

I was watching guys bet $50, then $100, then $200 on tails and losing each time!

After this run of heads and I had enough cash in my pocket to pay for my beers and dinner that night I was out of there! 

Tried a toss my self, got 2 heads then my third toss I spun 3 tails! Do'h! Should have hedged my self after tossing 2 heads.

All good fun though, kind of gives one a feeling for how the outcry markets and chalk board days of old must have been.

I'll be saving my coins for next years festivities 

Maybe next anzac day we should organise a ASF meet for the Sydney Siders. we can have a beer and a toss.


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## So_Cynical (26 April 2010)

gav said:


> And what happens if these "quality stocks" fall further after you buy?  Do you keep buying all the way down?  Do you hold on tight because they'll come back?




That's where the "plan" and discipline comes into it, my policy on averaging is to do it only once, and only after the stock has fallen at least 12% as long as my confidence in the stock is still ok...every stock (except 1) ive done this with has come back. (excluding current trades)

With my trading plan im buying falling or fallen stocks, thus i avoid top buying and so its impossible to keep buying all the way down because im not buying tops...and my 1 average down policy is more a repositioning of the cost base of the stocks i will hold after taking profit and establishing a free carry component.


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## johenmo (26 April 2010)

Chris45 said:


> Therefore the probability of getting a tail after a run of 7 consecutive heads = 1 - 0.5^8 = 0.996 ie 99.6%




Because each throw of two coins is INDEPENDENT - previous throws have NO effect on the outcome - the above doesn't stand true.  Yes, getting 7 consecutive heads is very low probability but it doesn't increase the chance of tails on the next throw.  What is least likely is 8 consecutive heads.  Sounds like it's contradictory but it's not.  In simple terms, forget the past.  I remember discussing this in maths at uni decades ago!


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## Chris45 (26 April 2010)

johenmo said:


> Because each throw of two coins is INDEPENDENT - previous throws have NO effect on the outcome - the above doesn't stand true.



OK, I might have got that wrong. Long time since I did this probability stuff – another good reason for staying well away from casinos!

So, if you’re tossing a coin 8 times and the probability of 8 consecutive heads = 0.004, then what’s the probability of 7 consecutive heads followed by a tail, since that’s the only other possible outcome given that the 7 heads are already in place?


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## Chris45 (27 April 2010)

Never mind. I worked it out.


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## private parts (10 April 2015)

so woot ez the ezest way to play 2 up and win just do you bet all heads evens or tails? 
Joost wondering? I kent spill will cous Im fron en zed.


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