OK, So How Come I'm Still Losing - Part 4

So far, I've talked about things like standard deviation, the effects of penetration and rules and proper game selection. While understanding these things and putting them into use is essential to successful and profitable card counting, there is still one important piece of the puzzle which I haven't discussed. From what I can see, it is one element that is often misunderstood and misapplied by players who know how to pick good games and how to play them well. Those with a mathematical bent have delved into its mysteries and designed various formulas which are intended to tell a player exactly how to do the one thing which separates the winners from the losers in the game of blackjack. That is how to take a bankroll and use it in the best fashion possible to exploit and to sustain the long term advantage that comes from card counting. In short, it is knowing how to manage your money.

Money management. You will see this term in almost every book ever written about gambling. Many gambling authors will tell you that it's the key to winning in the casinos, and some even base entire gambling "systems" on some sort of money management scheme. These systems use handy phrases like "stop losses," "win goals," "session bankrolls," and, perish the thought, "stop wins." Often, these are coupled with some sort of betting progression that has you raising and lowering bets based on the results of the last hand. All of these systems, schemes and plans have one thing in common. They will not add one red cent to your expectation. If you are playing a negative expectation game, such as craps or basic strategy non-counting blackjack, in the long run you are going to lose the amount of money you put into action times the house advantage. If you are playing a positive expectation game, like card counted blackjack, then you will win the total amount of money you put into action times your overall advantage in the long run, if you have enough money to put you into the long run in the first place.

The phrase "money management" has become so abused and misused by some gambling authors that many advantage players will turn up their noses at the sight of that phrase. They have come to expect that some ludicrous house-of-cards logic will be used to foist yet another silly betting system on the general public whenever they see that term in print. Yet the term, in and of itself, is a perfectly good way to describe what every player needs to do. That is, to manage his or her money in a fashion that will generate a profit and not lead to a total loss of the player's bankroll along the way.

"Money management" involves two crucial ingredients. The total amount of bankroll a player needs and how to bet that bankroll. It gets into notions like Kelly betting, risk of ruin, optimal bet sizing and a host of mathematical phrases and formulas that can be used to figure those things out. If you are mathematically inclined, you can find excellent advice and information on these concepts on Richard Reid's Mathematics of Blackjack web site, or in books like Schlesinger's Blackjack Attack, Griffin's The Theory of Blackjack or Wong's Professional Blackjack. In fact, if you are in the least mathematically inclined and a card counter, you should take a look at these by all means. You will get much better descriptions of the intricacies of these things than I can give.

Practically speaking, what we take to the tables are nothing more than approximations of the above mentioned concepts. For instance, pure optimal bet-sizing for a 400-unit bank in a two-deck game would have a player spreading from zero (betting nothing in negative or neutral counts) to more than sixteen units. That player would be resizing the betting unit after every play because the size of the bank would have changed. Besides the impracticality of doing this at the tables, no player is likely to last long in a casino spreading from zero to sixteen in a two-deck game. What I'd like to talk about here are some good rules of thumb that can be applied at the tables.

One of the things I have noticed from many card counters is the fact that they use inadequate bet spreads for the games they are playing or they have a betting ramp that takes far too long to get the money out when they have an advantage. Different games require different betting spreads. That is a fact that was often overlooked by many of the earlier blackjack authors. A one to four or even a one to six spread isn't going to win any money in shoe games, even though you may find otherwise good blackjack books recommending such a bet spread. I saw a post recently by John May, who also contributes to these pages, which pointed out that a good approximation of the spread needed to beat a game can be had by multiplying the number of decks in play by two.

For example, you need, at minimum, a 1-2 spread for single-deckers, a 1-4 spread for two-deck games and a 1-12 spread for six-deckers. Notice, I said at minimum because you need a larger spread in most cases to generate what would be an acceptable profit to most players. Obviously, the size of the unit would have a lot to do with what might be an acceptable profit. If you were betting black, using a $100 unit, a profit of 1 unit per hour might be acceptable, but if you were betting red, you might want to see a profit of at least two units per hour or three if it can be had. I would suggest a 1-4 spread on single-deckers and at least a 1-6 spread on double-deckers. If you are backcounting games, only coming in when you have a strong count and leaving when the count goes south, you can get away with a much smaller spread. In fact, Stanford Wong used to come into a game when he saw the advantage and bet one unit of $500. He made a lot of money doing this and so popularized backcounting that most players now call it Wonging in his honor.

Sometimes, players may describe their spreads as 1-12 or 1-10, but they take so long to get to their maximum bet, they might as well be playing a smaller spread for all practical purposes. For instance, some books may suggest that you raise your bet by one unit for each point increase in a positive count, betting two units at +1, three units at +2, four units at +3 and so on, until you get to twelve units at a +11 count. This just won't work in shoe games. The percentage of times you would be able to get your maximum bet on the table would be so small that it just wouldn't do much for you. You should be putting your maximum bet out by the time the count is the equivalent of +4 in hi-lo, or when you have an advantage of around 2% in whatever counting system you are using. One way to minimize risk while maintaining profit is to spread to two hands whenever the count dictates. For example, if you are playing in a six-decker and going to two units at +1, four units at +2. six units at +3 and twelve units at +4, you might want to try spreading to two hands of two units at +2, two hands of three units at +3 and two hands of six units at +4. You could actually increase your per hand bet by fifty percent and still face approximately the same risk as you faced with one hand play. For instance, if you were spreading to one hand of twelve units, you could go to two hands of nine units and have roughly the same risk of ruin that you had at one hand of twelve units.

As for the total amount of bankroll needed to successfully approach the game, many folks suggest a bankroll of at least 400 betting units. Of course, all of this depends upon what is an acceptable risk of ruin for a player, which is entirely subjective. I would suggest a bankroll of at least 100 maximum bets. If you can swing it, 150 maximum bets is preferable. This would mean you would be using different units for different games. If you had a bankroll of $10,000, you could bet with $25 units if you were playing single-deckers, spreading to a maximum bet of $100. In two-deckers, you might want to lower your minimum unit to $15 and bet a $15 to $90 spread, while in six-deckers, you might want to lower the unit even further, to $10 or less, if you insist on playing all hands in a six-deck game, and incorporate two hand play when the count dictates. If you stick to backcounting  shoe games, you could go with a higher minimum unit, but you'd still want to keep your maximum betting unit at approximately 1% of your total bankroll. Periodically, you want to look at your bankroll and resize your bets, either up or down depending on the state of that bankroll. I would suggest that you avoid resizing downward until you have lost 50% of your starting bankroll and that you try to reach that 150 maximum bet level before your resize your bets upward.

What about session bankrolls or things like stop wins and stop losses? I would suggest that you forget about those things, by and large. If you are playing at an advantage, you want to get in the hours. Stop losses and stop wins just get in the way of successful play. That's not to say that there may be good reasons to quit even a good game, but they shouldn't be triggered by stop loss or stop win points. Many players won't play at any one table for more than an hour in order to minimize their exposure to the pit (a good rule of thumb by the way) and some may want to limit their wins in one table session for the same reasons, although I'm not convinced this is the best approach, since large wins are not all that unusual at the tables and large losses are bound to come, which will often satisfy the pit. Obviously, you may not want to continue play if you are tired or if you have something else to do, but don't restrict your time at the tables based on total winnings or losses in a single session or even a single day or trip.

As for trip bankrolls, I would suggest that if your total bankroll is $10,000 or less, you bring the whole thing with you on any trip where you expect to play more than 25 hours. If you have a larger bankroll, then consider bringing at least 80 maximum bets for such trips. That should give you an adequate bankroll for the trip and minimize the possibility of running out of cash before you have finished your trip. As for individual table sessions, I wouldn't bring less than ten maximum bets to the table, but that's entirely up to you. Just think about how you would feel to be in an advantage situation where the dealer has a six up and you get to split nines four times and get a double down total on each split hand but you can't do it because you didn't bring enough to the table to make the bet. That happened to me once, but fortunately, my wife walked up to the table with a purse full of Franklins. It's a good thing, because I won the hand and it made not only my session but my entire trip. Hands like these can make you or break you and you want to be able to take fullest advantage of them when you get them.

That brings this series to a conclusion. If you are not paying close attention to things like penetration and proper game selection and the wise use of your bankroll, then it is entirely likely that you will lose your bankroll sooner or later. If you breeze into town with a $2000 bankroll and start betting green or black, then you have an excellent chance of going home broke. If you get on a losing streak and begin overbetting your bankroll, or get on a nice winning steak and decide to bet more than you should because you are now playing with the "house's money" (hah! it's your money the second they slide the chips over to your side of the table), then watch out. You are going to come down hard sooner or later. If you can apply the principles discussed in this series of articles, such as proper game selection and the disciplined use of your bankroll, then you may well be able to stop asking the question, "OK, so how come I'm still losing?"

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