System for the casino??? (baccarat)

N1Spec · 9 July 2009

ok can someone pick this pathetic system apart, if you can even call it a system.

One of my mates think you can beat the house at the casino in Baccarat whereby you keep doubling up your losses until the pendulum swings your way and you win a hand.

Basically.... the banker (house) charges you 5% for everytime you double-up.

For example.

- You bet $100
- You lose, so you have the option to lose the $100 or lose nothing and double it to $200.... you keep doubling until eventually you win.!!! yipee!

give me something smart to say so i can go tell my mate he's got rocks in his head I did tell him if you were to do this with stocks you'll be called stupid!!, the probablility of him winning a hand is so random that he can go for 10 games without a win!! , the drawdown on his account or should i say chips will be ridiculous!

Timmy · 9 July 2009

Someone on this forum has a signature line that goes something like:
There are things you learn from carrying a cat by the tail that you cannot learn any other way.

Something like that, Mark Twain said it apparently.

Tell him to go for it.

When he is finished he can look up martingale and anti-martingale systems on Google, should explain it all.

beerwm · 9 July 2009

problems-

-casino has limits
-need alot of capital
-Probability - you will eventually have a string of losses.

in the long run - negative expectancy..

.. the house always wins

Mr J · 9 July 2009

Yeah, it's called a betting limit. Tell your mate that he is far from the first clown to think of this. It's called Martingale, and has been around for a couple hundred years. Typical limits generally allow for 6-8 double-ups before hitting the limit, and most people seem to think that 6-8 losses in a row is so unlikely that the system will be profitable. This is not true.

I don't expect him to believe, so you may as well just let him lose his money. He will probably have initial success, as it brings many small wins and occasional large losses, but over the longrun he can only rely on luck to stay ahead. He'd actually be better off by betting it all right now on one hand, as his theoretical loss will be far lesser.

beerwm · 9 July 2009

also-

i could see some merit with martingale systems in markets-

eg, if the prob( win ) increased with each loss [dependant] events, then increasing risk could work quite well,

but with casino games - events are independent - P( 0.5 or less )

Mr J · 9 July 2009

beerwm said:
.. the house always wins

The house can be making -ev bets themselves .

Edit, beer, it still shouldn't be used. This is the same sort of thing as averaging down.

beerwm · 9 July 2009

Mr J said:
Edit, beer, it still shouldn't be used. This is the same sort of thing as averaging down.

well,

think of it this way,

you enter on a P( 0.6 ) chance of $100 gain/ P( 0.4 ) $100 loss.
=expectancy = $20

but- if trade fails- [maybe its a reversal system]

next trade P( 0.8 ) chance of $100 gain/ P( 0.2 ) $100 loss
=expectancy = $60

trade 2 in run under a different system than trade 1 -its win is 80% / compared to 60%;
so its maxDrawdown is different ---> allowing for a higher risk system.

^
all theoretical - am not saying double your system per loss [true-martingale]

but maybe something like
- 1% - 1.5% - 1.75% - 2% -2%cap. [ if events are dependent ]

although im abit sleep deprived so pick apart my analysis

Mr J · 9 July 2009

I know what you mean. It's a progressive system, like martingale. Both add to the position simply because it is moving against you, and that surely at some point things will rebound. I'm sure some thought that during Sept/Oct last year, and the world never heard of them again.

treeman · 9 July 2009

There is 3 main problems with any system that relies on doubling up:

1. Table limits
2. The bank never runs out of money (in theory)
3. Your odds decrease the longer you play

This means, short term the system might work in your favour when the trend turns your way. After 4 or 5 unsuccessfull tallies you hit a successfull tally and are still in the game, but in the end the tallies very and the time will come when you are faced with 20 unsuccessfull tallies and give up the nights profits in a matter of minutes. This means you will get caught out by the table limits and your budget will get demolished. Even if you survive to make your money back you will have to be in the game pretty long to be break even again and the longer you play the more chance you have of hitting a bad streak of unsuccessfull tallies again.

Perfect example is a friend of mine who after a 8 hour binge 1 night walked out of crown 4k richer after playing baccarat (successfull tallies). He couldn't help himself and came back the next day and walked out 6k down (unsuccessfull tallies) - both times he played the same strategy.

How many times can he repeat this? Not as many as crown thats for sure...

Excuse the grammar its after 3 am lol

johnnyg · 9 July 2009

Does the roulette table have limits as well?

cuttlefish · 9 July 2009

N1Spec said:
One of my mates think you can beat the house at the casino in Baccarat whereby you keep doubling up your losses until the pendulum swings your way and you win a hand.

Your mate didn't work on investment strategy for Storm financial group by any chance did he?

skyQuake · 9 July 2009

beerwm said:
well,

think of it this way,

you enter on a P( 0.6 ) chance of $100 gain/ P( 0.4 ) $100 loss.
=expectancy = $20

but- if trade fails- [maybe its a reversal system]

next trade P( 0.8 ) chance of $100 gain/ P( 0.2 ) $100 loss
=expectancy = $60

trade 2 in run under a different system than trade 1 -its win is 80% / compared to 60%;
so its maxDrawdown is different ---> allowing for a higher risk system.

^
all theoretical - am not saying double your system per loss [true-martingale]

but maybe something like
- 1% - 1.5% - 1.75% - 2% -2%cap. [ if events are dependent ]

although im abit sleep deprived so pick apart my analysis

As in trade 2 has a higher expectancy than trade 1 due to being a different system ? Otherwise why does the next trade have a higher probability of winning?

shiftyphil · 9 July 2009

You can not win at the casino.

If you do find a way to win, they'll call you a cheater and walk you out the door.

BurntToast · 9 July 2009

It all comes down to one simple fact - each hand of Baccarat, each spin of Roulette are independent events... doesn't matter if it's the first hand/spin or the tenth, your chances of winning THAT hand/spin is exactly the same as any other.

When the odds you're receiving are less than the probability of the event occurring, you're going to lose over the long term - no way to avoid it.

You can test it all out yourself quite quickly and easily with coin tosses. see how many times heads (or tails) come up in a row... or if that seems like too much work, generate a stack of numbers from a random number generator (e.g. enter value limits of 0 and 1).

Ageo · 9 July 2009

shiftyphil said:
You can not win at the casino.

If you do find a way to win, they'll call you a cheater and walk you out the door.

Yep my cousin got escorted from star city from playing blackjack. (With a partner of course).

A casino is basically a place to take millions of dollars from suckers everyday.

beamstas · 9 July 2009

Why can people accept mean reversion systems in trading

and

Not accept mean reversion systems in gambling

They feel they can control trading more than a coin toss
They can't

Even though you may get a streak, as the coin is only 2 sided it will always revert to the mean. But 50/50 over time is always expected

1 single event means nothing. Never has never will

But the coin is always going to try and revert back to the 50/50 mean.

1 coin toss is independant. But is 10/20/100?
If you toss a coin 10 times are you more likely to get 5 heads than if you toss it 5 times? Even though the coin can't remember it's previous tosses you are more likely to.

julius · 9 July 2009

beamstas said:
Why can people accept mean reversion systems in trading

and

Not accept mean reversion systems in gambling

They feel they can control trading more than a coin toss
They can't

Even though you may get a streak, as the coin is only 2 sided it will always revert to the mean. But 50/50 over time is always expected

1 single event means nothing. Never has never will

But the coin is always going to try and revert back to the 50/50 mean.

1 coin toss is independant. But is 10/20/100?
If you toss a coin 10 times are you more likely to get 5 heads than if you toss it 5 times? Even though the coin can't remember it's previous tosses you are more likely to.

There is no tendency for mean reversion with a coin flip. No amount of previous heads effects the conditional expectation for future outcomes - the 50% expectation only applies to future outcomes from that point forward.

Martingale doesn't work regardless of betting limits, because no matter how small you bet, you will eventually experience a string of losses which will wipe you out. Thus you will go broke with certainty as the number of bets played increases.

Mr J · 9 July 2009

johnnyg said:
Does the roulette table have limits as well?

All games do.

Ageo said:
Yep my cousin got escorted from star city from playing blackjack. (With a partner of course).

Not the best card counting environment. Rules aren't great, and the penetration from what I remember could often be quite poor. They had a lot of auto shuffling machines going.

Why can people accept mean reversion systems in trading

Because markets do have a mean reversion charateristic within them, while casino games do not.

Martingale doesn't work regardless of betting limits, because no matter how small you bet, you will eventually experience a string of losses which will wipe you out. Thus you will go broke with certainty as the number of bets played increases.

Not true. If one's capital is large enough, it is possible to play for a very long time without experiencing the string of losses. Example, Bill Gates sits down at the $10 table, and the casino allows him to double up on each loss. It's extremely unlikely he'll experience enough losses in a row to bust him. Of course, this is an extreme example, as anyone with enough money to have a high probability of surviving longterm martingale will have no need to do it, as it will be peanuts to them.

johnnyg · 9 July 2009

Mr J said:
All games do.

Why couldn't you simply get up from the table, walk over to another, and start your bets where you left off?

Mr J · 9 July 2009

johnnyg said:
Why couldn't you simply get up from the table, walk over to another, and start your bets where you left off?

You could do that, but it doesn't really change anything. Instead of 6-7 losses in a row, you can survive a few more, but you'll need far more capital. I can't actually remember the table limits, but I don't think it's that high.

Martingale starting at $10 will take 7 losses before we're forced to bet $2560. I'm not sure what the $100 table goes up to, but that may be pushing it. No more than 8, maybe 9 losses at the public tables.

System for the casino??? (baccarat)

N1Spec

Timmy

white swans need love too

beerwm

Mr J

beerwm

Mr J

beerwm

Mr J

treeman

johnnyg

cuttlefish

skyQuake

shiftyphil

BurntToast

Ageo

beamstas

julius

Mr J

johnnyg

Mr J

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System for the casino??? (baccarat)

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