The first important step starts with determining the feasibility of your plan before you venture into the unknown. The secret of all gambling is to identify a good bet, which is when your mathematical expectations are positive. It is your overall long-term results that are important whether you can still win.
To begin, let’s start with something familiar, coin toss. We all know that there are only 2 possible outcomes: head or tail with the probability of each occurring is 0.5. Intuitively, if you bet $ 1 on the word head, you will end up not hoping to lose or win. In fact, these results can be summarized mathematically as follows Online Slot Gambling Site Slot Online Terpercaya:
Expectations = (Possible Result 1) * (Profit / Loss if result 1 occurs) + (Possible Result 2) * (Profit / Loss if result 2 occurs)
where the probabilities of both results amount to up to 1.
For this particular example, we have Expectations = (0.5) * 1 + (0.5) * (- 1) = 0 because you get $ 1 if the head appears with a probability of 0.5 and you lose $ 1 if the tail appears with a probability of 0.5.
Now what does this mean? This means that in the long run, this is a fair game that does not offer an advantage for gamblers. Because most people resist risk, they will most likely avoid this bet. Now let us consider the following scenario:
Suppose a friend of mine wants to make money from the horse trade. He believes that he has found a fooling system to profit from betting on horses. I have decided to place a horse that only has a 0.01 chance of winning (1%). He claimed that these horses would be guaranteed a loss and thus he could collect money 99% of the time. Sounds too good to be true? Let’s assume he can collect $ 100 if the horse really loses. However, if the dark horse really wins, I have to suffer a loss of $ 10,000. Is this a winning proposal? This question can be answered using mathematical expectations.
Expectation = 0.99 * (100) + 0.01 * (- 10,000) = -1
In fact, the expectations are negative! Thus, in the long run, my good friend is expected to lose even though he hopes to win most of the time. What is wrong here? The logic is that in the end, given enough games, the dark horse finally has to win. For our example here, the dark horse must win 1 in 100 matches. The losses suffered by the gambler as a result of the victory of the black horse are too large to be offset by the many winners of the gambler. So, after all, this is not a winning formula!
Practice: A successful trader makes $ 3 20% of the time, $ 5 30% of the time and $ 8 10% of the time. I have $ 4.50 for the remaining 40%. What is his hope?
E = 0.2 * (3) + 0.3 * (5) + 0.1 * (8) + 0.4 * (- 4.50) = + 0.82
As you can see from this example, without doing the necessary calculations, it is very difficult to measure the profitability of the system. One can avoid the risk of capital that does not need to test the system by only calculating expectations to determine the feasibility of the plan.
Gabriel Khoo holds an honorary degree in Economics from the National University of Singapore. He is trained in gambling theory, game theory, and applied econometrics. He is currently a full-time sports trader who is also researching football statistical forecasting models. The Tradenexis website offers you the world’s leading source of free online sports trading. Here you will find a large collection of articles dedicated to trading systems on betting exchanges, sports arbitration strategies on popular bookies, laying out betting strategies to make you successful in sports trading. Visit now and start gaining profits on your journey to becoming a professional sports trader.