Monday, April 19, 2010

And now for a few words about stop-loss. Is it cowardice, or is it as sensible as a parachute (in which case, how long should the ripcord be)?

[Scroll down for a sports-book update for Tuesday and Wednesday, April 20 and 21]

I have probably had more knock-down, drag-out disagreements about the stop-loss concept than about any other aspect of progressive betting, maybe because I am so used to winning that I hate to be forced to admit defeat in mid-game!

There can be no argument that if you bet a flat or fixed amount every time, or if you select your bet values randomly, you are sure to lose in the end.

The truth of that hard fact can be easily demonstrated, and is accurately covered by the axiom Any amount bet against a negative expectation must always have a negative final outcome.

And never mind the math: It's simply logical that if the house has an overall edge in a game (and there are none in which it doesn't) you will over time lose more bets than you win; it therefore follows that if, by flat or random betting, you make your average win worth the same as or less than your average loss, you must also lose more money than you win.

Progressive betting in a manner that is neither as obvious nor as dangerous as a simple Martingale or double-up is, as we all know, the only way to win in the long run.

It works because it enables you to achieve an average win value that exceeds your average loss value by an amount sufficient to more than offset the expectation that your number of losses will be greater than your number of wins.

Luck can be useful, but it is never more than a short-term ally, and it has a nasty habit of siding with the house at least as often as it does with any player.

We then have to deal with the tricky question that asks how far you should be willing to go before you pull the plug on a progressive strategy, and its even thornier corollary that demands a number to cover the bankroll required.

I have always had to compromise when it comes to a stop-loss because although I can honestly claim not to have had a losing year in casinos in more than two decades, I have never had the million-dollar bankroll that years of research tells me would be pretty much bullet-proof.

Stop-loss came up again recently because of the hours I have spent playing Pinnacle's online table games (Bodog's too, but that's another story!) and patiently waiting for the dough I wired more than a week ago to show up in my account.

Stop-loss is what I have always referred to as a how long is a piece if string? question, especially when dealing with players who have far more money than I do, but far less tolerance for risk.

Confidence and consistency are far more critical to success in gambling than luck can ever be, but to be sure, lots and lots of money is a big help.

Years ago, I played alongside a foreign visitor at Harrahs Stateline, and he mentioned in passing that he never lost at blackjack because he had "too much money."

Nice, I thought.

My own real-play rule for as long as I can remember has been to try to stay away from blackjack and baccarat unless I have at least 500x my minimum bet in my back pocket.

So tackling a $5 game requires a $2,500 bankroll, assuming you are lucky enough to find a low-rent blackjack layout that is not crowded with partying punters who split 10s and stand on 16 (or less!) against a dealer up-card that spells near certain death.

I have always thought of 500x as less than ideal, and whenever would-be backers of target betting have come along, I have done my best to convince them that bravery (backed by big bucks) will trump an excess of caution every time.

Meanwhile, I keep plugging away with real money, content to walk away with a profit of less than $100 if I am pressed for time or if for whatever reason the game does not feel right.

The countless models I have created over the years to analyze the realities of progressive betting down to the mathematical equivalents of the last crossed t and dotted i tell me that any stop-loss is sure to be a bad idea eventually.

But that's because my models or "sims" churn their way through tens of thousands, even millions of bets, and do it at such blazing speed that reality can never get a look-in.

Anyone who has ever been a regular casino player knows that in real time, when real money is involved, all manner of factors affect the flow of wins and losses that cannot be programmed into a simulation.

The mythematicians of gambling dismiss those factors as absolute irrelevancies, and lecture us about the immutability of numbers and negative expectation.

But in the real world, it is wise to pay attention to gut feelings and to, for example, warnings from friendly dealers who want you to know before your first hand that they wiped out an entire table of players a few minutes earlier.

Dealers get hot, tables go cold.

Keep that in mind, but never let emotion or hunches prevent you from applying the rules of target betting, and of basic strategy at blackjack, strictly by the book.

A guy I know who's a regular at my closest casino is an immaculate basic strategy player, except when he's holding three or more cards adding up to 16.

He knows better, but he will tuck that 16 under his chips even against a dealer's 10 up, and more than half the time, those chips are swept away.

It is simplistic to assume that the dealer will always have a 10+ in the hole because the odds are 8 to 5 against it, but standing on 16 only makes sense against 2 through 6.

I try never to play to this guy's left because somehow, if I have a double-down out and he tucks a 16, I will catch "his" 4 or 5 instead of the 10 I need.

The flip-side of all this is that he hates to see me hit 13 against a dealer's 2, and sighs sadly whenever I catch a card that would have bust the house, even if that card gave me a winning hand.

There is no need to argue with anyone about basic strategy at blackjack. It's almost entirely black and white.

As far as a stop-loss ideal goes, none would be nifty, but real life tends not to cooperate with the over confident - just keep in mind that the lower your stop-loss, the more often you will lose it.

I know that in my regular rounds of local casinos, my greatest weakness is that I will often walk away with wins that are too small to build a reserve for the next time the cards don't fall according to plan.

In other words, I slow myself down with a "stop-win" that may not be greedy enough.

My rule has always been to keep the bankroll free as far as possible from such irritating demands as food and a roof overhead, and to add half of each session's win to it when the dealing's done.

It's a good policy, and I win less often than I would like, but far more often than most of the other players I know.

I really hate to lose, perhaps because I have never had a chance to get used to it.

One of these days, I will be able to stash enough cash to raise my loss limit to at least $5,000 and to play more in order to win more.

I must confess that if I had not applied a loss limit during the dozen or so hours that I have been playing pointlessly against the Pinnacle game, I would be bankrupt by now, rather than close to $30,000 ahead in funny-munny.

I logged every Pinnacle bet and will in a few days run them through a model and post the details. Betcha can't wait...

Tuesday, April 20 at 9:10am

Monday's dogs did well with a 53% win rate, but I felt like a break in the action and had a good day at local table games instead.

After a while, playing blackjack online with no real money at stake becomes both tedious and hard on the eyes.

Here's the latest sports-book info:

Wednesday, April 21 at 10:45am

There's no other way to say it: Tuesday was a flat-out disaster for both columns in the 7-dog trial.

Fact is, there hasn't been a worse day since I started the ball rolling on this experiment last November 1.

Even the 50x rules set is on the brink of insolvency, and that's a bad, bad state of affairs.

It's not much consolation that if the max had been higher when the going was great just a couple of weeks ago, we would still be at 80% of our best win to date.

Those who scoff at any systematic attempt to beat the odds pounce on information like that as proof that the only way to win is to keep betting more and more and more...until you eventually go broke, and didn't win after all.

I have said since I started this blog over a year ago that a wide spread (as wide as you can afford) is the key to long-term success at betting of any stripe, and that has been confirmed again and again by the 7-dog trial.

Here's the sad and sorry state of affairs after yesterday, with today's underdog selections in their usual spot.

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. One more piece of friendly advice: If you are inclined to use target betting with real money against online "casinos" such as Bodog, spend a few minutes and save a lot of money by reading this.