Sunday, July 26, 2009

"I think you have simulator fever, you can think of nothing else. You continue to contradict yourself, when all I'm asking for..."

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The only feedback worth having is the kind that challenges my ideas about consistently beating games of chance, and this one identifies the biggest dilemma I face with this project.

How can I reconcile my deep distrust of runaway sims with the need to know the effects of different tactics against more outcomes than I could hope to encounter in a lifetime?

Along with that comes what might be described as a "sub-dilemma": Should I offer a strategy that works most of the time, or one that works all of the time?

Against a game with a 1.0% NE (blackjack comes to mind!), a simple Martingale has favorable odds of around 4,000 to 1, assuming a $50,000 bankroll and the (unlikely) absence of any interference by casino personnel.

Target betting comes through hundreds of thousands of actual and simulated rounds with a win rate of 99.9919%, which equates to favorable odds that are better than 12,000 to 1.

The author of the above comment wants me to provide him with a betting method that will reduce his exposure while guaranteeing steady profits, and is angry with me for supplying mathematical models that show it can't be done.

I guess he wants to be able to blame me when he loses, when the more likely culprit in his failure will be his own refusal to follow any set of rules when a temporary negative trend threatens his bankroll.

Target betting is, in a way, like an elephant gun taken on a duck hunt.

You won't needed it 99.9% of the time because it does not require much fire-power to bring down a duck.

But you had better have that big gun locked and loaded, so that if a rare flying elephant swoops down and tries to make off with all that you own, you can blast it out of the sky and recover what's yours.

I was about to say that the unfortunate truth is that target betting does best when the pressure is on, but the truth is not unfortunate at all: the money you rake in each time you achieve turnaround, which happens on average in six rounds or fewer, adds up pretty fast.

But the big bucks really pile up when your LTD+ bet has several zeroes in it, and you pull a natural or a winning double-down.

In other words, the bigger the threat, the more important it is that you stick with the program and come out on the sunny side of a rough spot with more money than you started with.

To resurrect a favorite analogy, the author of the comment above is like the guy who knows that he has to drill to 5,000ft to strike oil but would rather keep drilling 500ft wells because they are cheaper.

Never mind that a dry well will never pay for itself.

Every change that is made to the target betting rules in the name of safety or economy will almost certainly prove to be more dangerous, rather than less so.

Years ago I listened patiently while a student of target betting suggested that session limits or loss limits should be incorporated into the strategy to control exposure.

I explained that because bet spread is the key to my method's success, the narrower the gap between min and max, the more likely it is that losses will exceed wins and that negative expectation will therefore prevail.

If you were to decide, for example, that NB can never be more than PBx2 in response to a mid-recovery win (limiting the next bet value to a parlay), then most of the time, that will not be a problem.

But when a prolonged threat pushes up the LTD, you need to recover prior losses in as few consecutive wins as possible, keeping in mind that three-win streaks are statistically half as frequent as paired wins, that pairs occur half as often as isolated wins, and so on.

Trust me, halving your chances of recovery will not help you to be a long-term winner!

High as the recommended bankroll requirement for target betting may seem, it becomes a diminishing concern as time goes by.

That is because if the rules are followed with disciplined confidence, the bankroll will keep growing rapidly until the original exposure is paid down and the strategy becomes self-supporting.

Over the years I have generated models which show target betting racking up huge profits without ever risking more than 10% of its BR.

But because I have applied a $5 to $25,000 spread and a $1 million bust limit, I prefer to honor and accept the very long odds that at some point the strategy will crash and burn, and warn everyone that a $1,000,000 BR might be needed.

My long-running victory over Ken Smith's BST simulation, and now the iPod blackjack game (right now I am $82,150 ahead against an AV of -4.67%), shows that in real time play, a monster bankroll may never be necessary.

But I am not willing to defy what statistical analysis tells me and advise anyone to tackle casino house games without enough money in hand to soundly thrash them.

The core principles brought to light by target betting can help any player who has a BR that is at least 40x his maximum bet value, especially the proof that fixed sum or random betting will always fail in the end.

Spreading as wide as you can afford does not increase risk. It has precisely the opposite effect.

But most people, like my friend quoted above, assume that the more you bet, the more you will lose.

Those models or simulations that he scorns say that a spread of less than 1 to 1,000 (the range permitted by the iPod app) is sure to lose eventually, and that 1 to 2,500 is a far safer bet.

BST has a 1 to 200 limit, meaning that once in a while, a large session loss can only be turned around when the relevant outcomes are keyed into a model and a more realistic spread is applied.

The blog archives cover this topic in far greater detail, with summaries from simulations (oh, no!) attached.

I'm sorry, but it is simply not possible to win without risk. Even a casino owner cannot hope to do that.

Target betting enables a player to do what "the house" does, which is to build up a BR that far exceeds the original investment, so that when a crash and burn eventually comes along, it will be fully covered by prior winnings and will represent overhead rather than ruin.

An important reminder: The only person likely to make money out of this blog is you, Dear Reader. There's nothing to buy, ever, and your soul is safe (from me, at least). Test my ideas and use them or don't. It's up to you.
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