Game Theory Example being a Martingale methodology.
Wednesday, April 11th, 2012Game Theory Example being a Martingale methodology.
Casinos love action when they have the edge. Let me show you how they stop you from getting an advantage. Then I will show you where they will allow you one. Then I may tie this into options trading, showing you how to get an advantage and turn the edge into nice profits.
There are 2 kinds of games of luck; those with a memory and those without. Roulette (Wheel that spins with ball dropping into one of 38 possible numbers) and dice games are one or two examples of casino games that don?t have a memory. Each roll of the dice, each spin of the wheel is completely independent of any other. Like flipping coins, the last flip has little impact on the next. Card games, on the other hand, have a memory. Once a card has been employed, it's no longer there to use again. Not till the next shuffle.
The likely outcomes of a spin of the wheel or roll of the dice are always the same. The net Anticipated Worth (EV) of the bet is up to the player. Make a dumb bet and you will not lose more often, but when you do win you’ll win less. Understanding that each spin of the Roulette wheel is independent from each other, many casinos now have an electronic board which shows the last 15 to 20 spins of the wheel. The casinos are helping gamblers with a ?system? Try to cost a fortune. These scoreboards have helped increase Roulette money. As a gambler, the sole true advantage you have over the house is your choice of how and when much you bet. There are really times when the advantage goes to the player not the casino. The truth is the casinos know it and they do their best to not let you have it.
Casinos frown on card counters. If they suspect you of having the facility to recognize a statistics advantage, they are going to throw you out. In fact they take you to the backroom, photograph you, tell you if you are caught on property again you will be arrested for criminal trespass and then they share your photo with the other casinos so they also can be on the lookout for you.
It only becomes worse if you attempt to use any electronic device like a computer or calculator. It’s against the law. The casinos and the Nevada State gaming commission understand what would occur if they permit you to get an edge. You’d win big. But as significantly to them, they'd lose gigantic. Many gamblers know their only advantage is their decision process. How and when much to bet. Realizing they can't find an edge in chance, they try and bet their way to success.
This plan of action is reasonably simple, when you lose double your wager on the following result. If you are right, you won back what you lost and won what you were making an attempt to win to begin with. If double your wager again. So on and such like. At some point soon, if you can afford the cost you'll eventually win. Here?s the math: Losing $2 means gambling $4 on the next result. If you win you earned back the $2 lost and the $2 you attempted to win in the first place. If you lose this second bet, now bet $8. If you win you earned $2 net, and the $2 & $4 you lost previously. If you lose this 3rd bet, now bet $16. If you win you earned $2 net, plus the $2, $4 & $8 you lost formerly. Continue doubling you wager and sooner or later you should win the first $2 you were after.
Two issues; first you might obviously run straight out of money. You'd be broke. I am not sure I even need to tell you the second point, but here goes; table limits. The casinos know about gambling systems. They will do anything in their power to take away any probability of you getting an edge. Well not all benefits. There are 1 or 2 games which the casino permits you an edge. They know it and you'll know it. The most important difference between these games and the ones I have been describing is the player on the other side. I am talking about sports gambling and poker.
I will not talk at all about sports gambling apart from to make you know of the way in which the casinos make their money and how this could act as a metaphor to options dealing. I adore sports too much to minimize the game. Quickly, the point spread or the odds on a sporting occassion aren't based on chance, but on supply & demand. The house wants even action on either side; they just take a cut for making sure the winners get paid. Not only is sports gambling illegal around the country, even the casinos in Atlantic City are prohibited from offering it. Poker on the other hand is different. The state of California long ago decided poker wasn't a game of luck (which is prohibited in the state) but a game of skill. A legal game of ability, well as long as it’s held in a regulated and taxed environment. Perhaps in part because of cable tv and more precisely the miniscule cameras which show the cards of the players,. Poker is growing fast. However , I do not play poker. I might have no problem figuring out the odds on any draw. That?s straightforward maths. I don?t play for 2 reasons. I can’t bluff and I can?t tell when someone is bluffing.
The final analysis being while the probabilities have a continued the wager doesn't. Poker is more about gambling than probability. Don’t try a Martingale strategy at poker! You lose your chips fast. That type of system was designed for even money gambles! Vegas and casinos around the planet are extraordinarily different to the option exchanges. It may be starting to click with a small number of you; you understand we have an advantage in that we can use PCs to search for an edge, but it?s much more than the tools and group effort. But let me now attempt to tie in game theory to successful options trading.