How advanced mathematics and gaming theory can help you as a trader

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casinos by your neighborhood? run by entities perhaps unlicensed by the gaming commissions?

just try to place a bet after the ball is snapped, in atlantic city, reno, las vegas or the likes....

perhaps, i ought to be more tolerant, realizing that there are individuals who are frequent guests who are allowed to place their bets unconventionally.... and who are also allowed to just sign on the 'markers' without having to show any cash, to bet on anything and everything.... to their hearts' contents....

furthermore, if you were one of those, you could also eat what you like and when you like without anyone asking you or bothering you....

sound good? your companion also is afforded with the same courtesy with free show and what not....

before i forget, cause i've not done it for a long while now, you would also be able to fly first class, airline of your own choosing, at the casinos' expense....

i could almost guarantee that you would have a good time, a great time, or even the best time of your life.... if you like partying and that sort of life style....

As far I know there are no unlicensed casinos in the UK where I live. I went to two casinos in London last year and the end of 2009 to play poker. The Empire casino which is the largest in the UK gave me 2 or 3 coupons which could not be used at the poker table so I used them to bet black or red on roulette with a large edge over the casino as they were paying for half the bets.
As far as I remember bets where allowed after the ball was in motion.

As far as U.S casinos I have not been in them since my card counting days about 14 years ago. All the U.S casinos I went to where in Las Vegas, Laughlin, Reno or Stateline Nevada. As far as I remember bets after the ball is in motion you were allowed but I was not paying much attention to the roulette table, as I was there to play blackjack. I did get 2 room comps and lots of food comps and backed off from about 18 Nevada casinos while doing so. Along with already having been banned from a bunch of UK Casinos.

For more recent info on if bets are allowed after the ball is in motion in U.S casinos maybe try this link. It seems one person agrees with you on the Atlantic City casinos, but the consensus is you can bet after the ball is in motion.

The reason most casinos will let you be after the ball is in motion is because they would lose far more money in bets not made from squares than they will save from the the very few players that may have working computers.

Last edited by andy2001; November 29th, 2011 at 05:14 PM.

intresting, I did this once with a deck of cards looking at red and black minus the jokers. Essentially a coin toss that quickly averages out to a 50-50.

every time a red card popped out i calculated minus 1 and every time a black card popped up I added 1. Intrestingly the max integer was -8/+8 meaning wagering when there were 8 more blacks that popped out then reds yielded the highest probability win

At the casino i simplified it as it was more of an enjoyment thing. I played black jack. with out really trying to read the table i played the same way a dealer would play giving me about 50-50% odds minus the initial payment i would put down to play. I would bet the minimum until the dealer lost twice in a row and then bet heavy ( to make negligible the initial payments to play and any other advantage the casino may have.

Not much of a gambler so only tried it twice both of which were profitable. Though i believe there was some luck involved as i dont really believe that a 2 streak lose justified a win and also there was no accounting for winning or loosing streaks like there was in the flipping cards. Needless to say i raised alot of eyebrows with the other players betting minimum and then out of no where raising to the max. the staff was on my case and they ended up closing the table lol.

Like my trading I simplified my strategy and estimated money management

Interesting discussion. One huge advantage the casino enjoys is the maximum bet limit they place on most games. This limit will ultimately be reached if you are increasing your bet to recoup prior losses on previous wagers. This limit is the ultimate casino edge.

There is no such edge in trading futures. The amount you wager is up to you limited only by your account size.

Other factors of course enter into this. If you suffer a string of losses whic will require you to trade more and more contracts to recoup your losses the liquidity of the contract being traded must be considered.

There are ways to mitigate even this if you trade index futures by being willing to trade multiple markets if the number of contracts necessary to recoup becomes an issue with liquidity.

funny you mention this. i had a similar conversation with some one. I believe it is some what similar and if so then it questions your "Gamblers fallacy"

The idea was that the odds of a coin toss are 50-50 but the odds of getting 3 heads off the bat are smaller then 50-50. they are actually .5 x .5 x .5 = 0.215 this would mean that they are not independent from one another and they accumulate value.

Its arguable but the nail in the coffin is the Quebec lotto 6/49. Here you choose 6 numbers 1 to 49

so for example your 6 numbers could be 2, 40,20,33,39, 8

Odds of picking the correct number is 1/49 for the first one. 1/49 for the second and so forth. so it would be 1/49 to the power of 6 i believe.

If the numbers stand alone, the odds of winning the millions would be 1/49 ?

i agree that the odds of your second number being a 40 is 1/49 and the odds of the third being 20 is 1/49 ect. but the odds of all the numbers coming up we need to multiply

now lets say we have a grid of 9 surprise boxes. 3x3

there is a surprise in 3 of the boxes (one in each column) and there is also snake in one of the boxes.

the odds of hitting the snake are 1/9

the odds of getting all 3 surprises is about 3 times harder.

My example may not relate well or there may be something im not looking at here ?

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If you have a regular coin and throw it 3 times, each toss is independent from the prior toss - the coin does not have a memory - and the probabability of getting 3 heads in a row is

0.5 x 0.5 x 0.5 = 0.125

Nothing really difficult to understand.

The fallacy is to assume that if you had 10 heads in a row this will increase the odds to get tails in the 11th toss. This is not the case.

Many progressive betting systems are based on the gambler's fallacy. The grandfather of progressive betting was Jean-Baptiste le Rond d'Alembert (1717 - 1783) . A renowned physician and philosopher, he also had a keen interest in gambling and suggested a number of progressive betting systems that did not work.

The key to understanding progressive betting is that it will only work, if the probability of consecutive events depends on prior events, which means that they are stochastically dependent on each other.

Last edited by Fat Tails; January 9th, 2012 at 07:37 AM.

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Well, one only needs to double every bet until one gets it right, and then one will end up with one more unit than the original bet. This works as long as there's no limit on betting, and one has more money than God!

I liked reading this thread, especially @Fat Tails rock-solid explanations about the gambler's fallacy. The summary in post #2 is also helpful.

If some still believe that strings of outcomes and progressive betting are beneficial for independent events, perhaps the following charts can help. I expanded on the spreadsheet provided by @worldwary in post #47.

This first chart shows 10 trials with a constant betting strategy (coin flips with 50/50 W/L). The initial capital is $100 and every bet is $10.

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This second chart shows 10 trials with the same scenario, except that bets are increased by 50% after each win - ie. bets are increased during strings of wins. After each loss, the bet is returned to $10. The average bet is $13.34. This is the anti-martingale system or the "progressive string strategy" as described by the OP.

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Just for interest, this chart shows one of the trials with three strings of 10 wins.

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This last chart shows the distributions of final capital from 500 trials of each of the two betting strategies. Results from the progressive betting strategy have been normalized to match the bets used in the constant betting strategy (each final capital x 10.00 / 13.34). The binomial distributions are quite similar and their averages are close to the initial capital of $100. In other words, there is no benefit from the progressive betting strategy.

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On the positive side, these charts show that one should be able to play a 50/50 game for a long time given a reasonable initial capital.

The spreadsheet is attached if anyone is interested.

Len

Last edited by Lampert; January 9th, 2012 at 10:16 PM.
Reason: Attached the spreadsheet

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