Blackjack and Fixed Fractional Position Sizing

[Realist]

Consequently the probability of picking red or black correctly 8 times in a row is 0.153%

Exactly, the probability of losing 8 bets in a row is less than 2 in 1000.

Of course on the other times you win small amounts of money to cover that 1 or 2 losses. So doubling up after each loss is not that silly. Still not wise either.

Sorry but I TOTALLY disagree Ive seen 27 straight black and well over 8 times everytime I walk into a casino.

First of all that sounds unlikely to me, the odds are less than 2 in 1000 of 8 blacks in a row happening apparently, you must sit at the roulette table for hours each time.

What are you disagreeing with exactly? I said I do not think the theory is wise, I certainly don't do it, and of course you could just move to another table with higher limits. You could do this theory and it'd maybe pay off for a while, but when that one unlucky day comes along you'll get shat on!!

Of course it is possible you will lose 27 times in a row. But that possibility is so small it is not even worth calculating. I'm not sure I believe you when you say you saw 27 blacks in a row, that must have been a freak day indeed!

 

[GreatPig]

Of course on the other times you win small amounts of money to cover that 1 or 2 losses.

That's the problem though: with the house advantage (the zero), on average those small amounts won't cover the 1 or 2 losses.

GP

 

[macca]

It really is this simple, if doubling up worked, every casino in the world would be out of business.

Instead of that, they are busting to build them everywhere.

Trust me, it doesn't work mate !!

 

[macca]

I just remembered something, about 10 years ago, 3 guys I know went to the casino in Hobart.

Their plan was to wait until 2 of the same colour came out, say 2 blacks, they then started betting on red.

They played for 3 days over a long weekend, lost $23,500.00.

Expensive weekend

 

[Realist]

They played for 3 days over a long weekend, lost $23,500.00.

Oh dear!!

Dumb bastards!

 

[RichKid]

Hi guys,

I wanted some feedback about a fixed fractional position sizing idea i've been toying with. It is similar to my casino method when playing blackjack.....................
............
Anyways, if you had the energy to read through all my prattle, can I have some feedback? C'mon, one of you academic types has to have a major in statistics.

Milkman
Have you read Ryan Jones' The Trading Game? It explains the gambler's fallacy and the differences between martingale and anti-martingale systems with worked examples and tables of coin flips etc- seems to address your strategy. If you search ASF you'll find the book discussed with a link to a copy. He also discusses the effect of varying the position size according to a certain formula (talks of futures contracts but shows how to apply to other instruments too) but that part of the book has been criticised in the past, his basic statements are clear and worth reading. Let me know if you haven't read it and would like to.

 

[kgee]

Are we talking blacjack or roulette...the only thing I've heard about proffesionals winning at roulette is when a crew scoping a casino found a wheel that kept up throwing statistical anomalies...ie they figured the wheel was weighted wrong or slightly off balance....it was a book i read the ...table was shut down after a couple of day's
other than that I figure the law of big numbers is always in favor of the house and to break it you'd need a huge bankroll

 

[Milk Man]

Milkman
Have you read Ryan Jones' The Trading Game? It explains the gambler's fallacy and the differences between martingale and anti-martingale systems with worked examples and tables of coin flips etc- seems to address your strategy. If you search ASF you'll find the book discussed with a link to a copy. He also discusses the effect of varying the position size according to a certain formula (talks of futures contracts but shows how to apply to other instruments too) but that part of the book has been criticised in the past, his basic statements are clear and worth reading. Let me know if you haven't read it and would like to.

Yeah definitely. Although considering my so called skills involving position sizing they may just stay as theory for now. I did come up with a way of beating the casino though, first I go down to the psych ward and find an idiot savant(sp?) that can count cards.... Seems to work according to Tom Cruise.

 

[money tree]

Forex is not a random market. It is strongly LEPTOKEUROTIC (tendency to come up the same as previous result). Forex trends last for LONG periods.

A good betting strategy may be a Fibonacci sequence.

1,2,3,5,8,13,21

eg, bet 1, lose,
bet 2, lose,
bet 3, lose,
bet 5, win.....get back previous 2 bets (3 + 2), reduce bet by 3 positions (to 1)

you need a good table limit and lots of capital. I used to use this system betting on 2 dozens.

 

[macca]

kgee,

The only way you can ever break the bank is if they do something stupid.

As long as the casino stays within their budget restraints and don't risk to much on any one game then they will always win.

Just like in the stock market, don't over expose yourself to temporary risks and you will survive a lot longer

Just an aside, to win big on roulette you must play the numbers and pray, just be aware that any good croupier knows when to throw the ball if they want to avoid a number.

Thats why the wheel spins at a constant speed, they will land it in a certain quarter of the wheel about 60% of the time. So if you are ever going to have a BIG bet on a wheel, put your chips down after they release the ball and on a number away from the number that had the most chips on it before they let go.

Most of the times the high rollers play blackjack or bacarrat and if they get on a roll they can win big

Good luck

 

[RichKid]

Yeah definitely. Although considering my so called skills involving position sizing they may just stay as theory for now. I did come up with a way of beating the casino though, first I go down to the psych ward and find an idiot savant(sp?) that can count cards.... Seems to work according to Tom Cruise.

Milkman

lol, we need some sort of 'hire a savant for the night' service...the psych ward is probably where we'll end up if we think we can beat the house that easily..we'd have to be lunatics to donate money to the Packers and Ainsworths of this world, they've got enough money as it is.

Here are some links to threads on ASF, one of them has the link to the book, free download. It's one of the first books of its type that I read and I found the main concepts easy to understand, which is good as it means it's written for novices (but I did have to read some chapters several times!! Still need to re-read it myself). I don't trade futures directly so I have no idea about the validity of his system but I've heard that he's had some disasters trying to trade it publicly (the money management system that is). Google the web for some critiques but only after you've read the book. At least read the first few chapters and some of the coin flipping chapters near the end if you don't have time- see if you can spot some errors (probably typos). Feel free to start a new thread on Ryan Jones' The Trading Game so we can pull apart his theories if you like, I'm keen to delve deeper into this important topic.

A brief mention of the book:
https://www.aussiestockforums.com/forums/showpost.php?p=10491&postcount=14

See today's post for the link to the free copy of The Trading Game: https://www.aussiestockforums.com/forums/showthread.php?p=49155#post49155