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Article 3
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| If
we are to have any hope of truly “beating the odds”
over time, whether at the gaming table, Forex trading, the stock
market, or whatever, we would be well-advised to begin by a rational
analysis of just what is involved in the “game”. As visitors to the “Fortune Smiling” site already know, I prefer examples taken from the world of gambling, not because I am myself am a gambler (I am not), but rather, because the “rules of the game” are crystal clear. All have these factors in common: 1) any one casino game, or state lottery, has a specific set of rules by which it is played; these rules are made available to the player. 2) The rules are devised in such a way as to give the casino (or the state, in the case of a lottery) a mathematical advantage over the player. The results in general are due to pure chance, because the games are based on randomness. Though the odds are not necessarily always stated clearly, the player may more or less easily calculate them himself, or find an internet site where they are explained. 3) Though it is possible that a player can win against all odds, most especially in the short run, the more often he/she plays, the less likely it is that those odds will be overcome. If, for example, the odds of winning a game at the single-zero roulette table are 48.6%, it is not at all unusual for a player to win once, twice, or even several times in a row. However, if that same player plays ten thousand spins of the wheel over time, it would be very unusual if he were to end up winning significantly more games than he lost; in this case, his winning percentage will most probably rather closely approach 48.6%. 4) Despite the pessimistic outlook described in 3), above, if one were to study a group of 100 gamblers, all of whom played 10,000 spins of the wheel over time (for instance), one would see that though most ended up at around 48.6% wins, there will be a very small number who deviated from this expected norm, and even came out over 50%. The dream of every professional gambler is to be one of the few who, against all apparent odds, consistently winds up among that elite few. Given that probability predicts that the roulette player will end up losing over time, it is nonetheless not to be expected that every player will tally exactly 48.6 % wins at the end. In other words, in a total of 10,000 spins, we would expect a player to have 5,140 losses, and 4,860 wins. Yet in fact, if we look at the results of 100 players, for example, we will probably find that few, if any, of them, had exactly that many wins. True, most ended up around there, yet some had less wins, and some more; a small number of them varied even more, either losing, or winning “big”. Here we come to a point that seems almost mysterious. No one individual should be able to expect to win big at such a game over time, though in our imaginary group of 100 gamblers, all of whom play 10,000 spins of the wheel, maybe one or two will indeed come out far ahead. These are the “lucky ones”, yet how did they achieve their luck? Was it only coincidence that a certain gambler managed to wind up as the “odd man out”, that is, as the one who, despite the odds against him, actually was richer at the end of the year? Well, the mathematics of the game itself can’t help him here, for as we have seen, the probability of winning is only 48.6%, and no mathematical system can help you beat these odds in the long run. Yes, I know there are hundreds of so-called “systems” out there that promise you the “magic formula” for winning, using a mathematical basis, but don’t believe it! It is not possible; if it were, practically every casino in the world would be bankrupt. Let us consider the game itself, together with its rules and its odds, as a rigid system of sorts, one that will give rather predictable results over time, as long as no other factors intervene that could tip the scales in favor of, or to the detriment of, the individual player. Let me repeat the last part of the previous sentence: “as long as no other factors intervene that could tip the scales in favor of, or to the detriment of, the individual player.” What could such “other factors” be? Well, for instance, suppose the casino is crooked (not too likely these days, since the state usually keeps a close watch on all gaming activity), and they “rig” a certain roulette wheel, so that certain numbers will come up when the croupier pushes a secret button (like the scenarios you may have seen in the movies). In such a case, the gambler obviously does not have a 48.6% chance of winning, since one of the “givens” of the game itself – that is, the use of a perfectly balanced wheel, one that will deliver purely random results – is being violated. What other ways of tipping the scales of luck could there be? Most especially, how can a player overcome, even over time, the odds against him? I personally know a man who did just that, with amazing results… Click to read "An amazingly successful Gambler", Part 1
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