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Why am I still losing?8 October 2016
Yes, I know it’s frustrating to lose, especially when you play your hands perfectly. But this player’s experience is not uncommon. Even the most highly skilled players suffer losing streaks (been there, done that). The reason has nothing to do with “faulty strategy,” or “the bad play of your fellow players,” or “a cheating dealer.” No, the reason is due to what mathematicians call “standard deviation” (which I will refer to as SD). If you’ve never heard of SD, don’t fret, because you are not alone. However, it is often the culprit that causes a player’s bankroll to swing wildly, so it’s important that you understand a little about SD. But I promise not to bore you with a lot of mathematical equations. Instead, I’ll show you how SD can be used to predict and understand the results of your playing sessions. Basically, SD is a measure of the variance (or difference) between an actual result compared to an expected result. For example, how many heads would you expect if you flipped a coin 100 times? You probably said “50.” However, in the real world it’s rare that your outcome would be exactly 50 heads (try it, and you’ll see). Most likely you’ll wind up with more, or less, than 50 heads, and it’s unlikely that you’ll get the same result on each 100-coin-flip trial. If you want to know beforehand how far away you most likely will be from exactly 50 heads (i.e., the outer boundary) you need to calculate the SD. In the case of our 100-trial coin-flip game, the math yields an SD of 5. This means that instead of ending up with exactly 50 heads as expected, you will probably end up in the range of 50 plus or minus 5 (1 SD), or between 45 and 55 heads. How probable is probable? For a large number of trials, one SD implies that in 68.3% of the trials you will wind up between plus and minus one SD from the expected result. If you want to know the probable result with more accuracy, you can calculate twice the SD, or 2SD (95.4% certainty), or 3SD (99.7% certainty). (Note: Our 100-coin-flip example is not a very large trial, therefore, the percent probabilities will be slightly different than the above theoretical probabilities.) 100 COIN FLIPS Expected result Possible Result 50 45 to 55 range (1SD) 50 40 to 60 range (2SD) 50 35 to 65 range (3SD) Now let’s bet a buck on each coin flip. At the 2SD probable outcome, your result will be somewhere between 40 and 60 heads, about 95% of the time. If heads comes up 60 times, you would be a winner of $20 (win one dollar on 60 flips and lose one dollar on 40 flips). If instead heads came up only 40 times, you’d wind up in the red by $20. In fact about 95% of the time you would end up winning or losing between +$20 and -$20, after 100 coin flips, and only 5% of the time would your final outcome be a win or loss outside this range. The point is that by calculating the SD you can predict how much money you should expect to be ahead or behind in this 100-trial coin-flip game with a fair degree of certainty.
What happens if you were to wind up losing $40 after 100 coin flips? I’d look carefully at the coin, because it is highly unlikely that you would be that far outside the 2SD lower boundary of -$20 if the game were fair. In other words “something is rotten in the state of Denmark” (e.g., maybe someone slipped a biased, weighted coin into the game). So let’s get back to our frustrated blackjack player. In her e-mail, she mentioned that she lost “close to $500” after three consecutive weekends of play. Let’s use SD to determine what her most likely outcome should have been. Our player estimated that she played 25 hours of blackjack and averaged $10 per hand. We’ll assume she was dealt a standard, 100 hands per hour. This means she played 2,500 hands of blackjack over the three weekends and made $25,000 worth of bets (you didn’t think it would be that much did you?). We’ll also assume that she played perfect basic strategy with a casino’s edge of about 0.5%. With the above assumptions we can calculate the SD and determine how much money she should have won or lost with 95% certainty (i.e., 2SD). First let’s calculate her expected result based on the fact that even though she played perfect basic strategy, the casino still has a tiny 0.5% edge. To determine her expected result you simply multiply the total amount wagered by the casino’s edge ($25,000 x 0.5%). In other words, her expectation was to lose $125, because the casino had the slight mathematical edge. However, rarely will she lose exactly $125. The calculated 2SD for this blackjack game (where the formula is slightly different than for a coin flip) is approximately $1,100, therefore, the most likely outcome is that she will wind up winning or losing between +$975 and -$1,225. This range of results will occur 95% of the time, or in roughly 19 out of 20, 25-hour playing sessions. 2,500 Blackjack Hands at $10 per hand Expected Result Possible Result at 2SD -$125 +$975 to -$1,225 If you compare her actual result — losing $500 — with the projected 2SD outcome of +$975 to -$1,225, you see that losing $500 is well within the expected range. This means that her $500 loss was not at all abnormal, or “unexpected.” In fact the math tells us that she had almost a 25% chance of losing at least $500 for her 25 hours of play. So, for every four trips she takes, she can expect to end up $500 or more in the red once, on average. Her result, therefore, wasn’t the least bit unusual or expected. What happens if she plays more blackjack? Will she ever get a shot at recouping her loss? It’s possible, but the chance diminishes the longer she plays. Just look at her 2SD probable outcome as she plays more hands (see below). Notice that the more hands she plays, the more the range of the probable outcome is skewed to the losing side, and eventually, at 200,000 hands, she has virtually no chance of showing a profit. So even though luck plays a big part in your outcome in the short term, over time the casino’s edge will prevail, and you will come closer to the expected outcome, percentagewise (which in this case is a net loss).
10,000 -$500 +$1,700 to -$2,700 25,000 -$1,250 +$2,230 to -$4,730 50,000 -$2,500 +$2,420 to -$7,420 100,000 -$5,000 +$1,960 to -$11,960 200,000 -$10,000 -$160 to -$19,840 So what’s the lesson learned in all this? First, experiencing losing sessions as a basic strategy player is quite normal and should come as no surprise. The reason you have some winning and some losing sessions is due to the natural fluctuations of the game (i.e., SD). Secondly, in the short term you could experience many consecutive winning or losing sessions, because luck has a lot to do with your outcome. Thirdly, the longer you play, the more likely your final outcome will be a net loss, because the math in the casino’s favor will ultimately prevail over “luck.” Henry Tamburin, Ph.D. is the host of smartgaming.com. For a free three-month subscription to his blackjack newsletter, go to www.bjinsider.com/freetrial. This article is provided by the Frank Scoblete Network. Melissa A. Kaplan is the network's managing editor. If you would like to use this article on your website, please contact Casino City Press, the exclusive web syndication outlet for the Frank Scoblete Network. To contact Frank, please e-mail him at fscobe@optonline.net. Recent Articles
Henry Tamburin |
Henry Tamburin |