No, martingales are not a new species spider venom. But do a little flashback before beginning the talk: we are Wednesday, June 23, it is 8am, the crumbs of cereal cookies that I have to swallow still litter the table and say to myself: "Come on, I watching an episode of The Simpsons and I go to work ".
I then open my favorite streaming site (not, for pity's sake do not tell on me) and like all the sites streaming I have to fourteen bear pop-up ads and various get up before my show. And there, as usual, I let out a chuckle when he saw an ad arrogant like "Earn 250 € per day without leaving home." Yet that day, my curiosity prompted me to click on just to see what scam they hope to feed me.
I came across a video shot by a charming young man named Jonathan, but who has a bad tendency to speak to the viewer as a moron. After an introduction where I suspect a phishing attempt , he presents his infallible technique (But as old as the world) to win at roulette martingale what the classic (though it does not mention the name). What's this?
The strategy is as follows. Consider a game of chance like roulette where you can bet on "even" or "odd." For example, if you put € 1 on "pair", it gains 2 € if the figure comes out even and you lose up otherwise. So we have a chance of winning. What he proposes is to always bet 1 € on "pair". When we win, we win our pockets and is replayed exactly the same way. When we lose, we double the bet until you win again.
The idea is that if one has lost € 1 and € 2 replays that we find ourselves in the following situation. If we win, we recovered € 4, a net gain of 1 € (4 € least two bets). If it loses again, the net loss is 3 €. We put then 4 €. If we win, we retrieve € 8, a net gain of 1 € (8 € - 4 € - 2 € € € -1 = 1). If we lose, we double up again. We put therefore 8 €. If we win, it cancels all previous losses and realizing a net gain of 1 € and if we lose, we have only to double down and continue. Intuition is that when we began to lose force replay, you end up necessarily win at least once and cancel all its losses. So ultimately, we can not lose!
What's wrong?
note several things:
* First, if the game actually gives us a chance of doubling our bet and a chance of losing our bet, then mathematically expectancy winning the game is zero. That means that if you play a very large number of times and no matter how you play or what strategy you adopt, your wins and losses will vanish in the long term. There is no strategy to average to earn money. In contrast, we see that there are strategies to lose for sure :-)
* Then we can see that with this strategy, the gains seem relatively safe but are very weak. It gets 1 € after another. So if you have a high probability of earning some money and as the hope of winning the game is zero, there is necessarily a small probability of losing a lot of money at once!
now dismantle the mechanical Let the game you start playing with 100 € in my pocket. What is the thing that makes the strategy outlined above does not work? Let's look more specifically how many times maximum you can afford to lose in a row.
- If you lose once, you have € 99 and you have bet 2 €.
- If you lose twice, you have € 97 and you must wager 4 €.
- If you lose three times, you have € 93 and you have to bet € 8.
- If you lose four times, you have 85 € and you have to bet € 16.
- If you lose five times, you still € 69 and you have to bet € 32.
- If you lose six times, you have 37 € and you have to bet € 64 but you do not have enough!
So if you lose six times in a row, you do not have enough money to continue and you will get lost in the final 63 €. What is the probability of losing six in a row? It's (half) sixth power, ie 1 chance in 64.
Conclusion, when you have 100 € in my pocket and you apply this strategy, every time you bet, your chances of winning are:
- 63 chance to win 1 of 64 €.
- a chance on losing 64 of 63 €.
You can check the average earnings is zero. But then you say, just come with more money! If we redo the calculation with 1500 € in my pocket at first, then you can afford to lose up to 10 times in a row. You play the next game:
- 1023 to 1024 chances to win 1 €.
- a chance of losing to 1024 € 1023.
Each time you increase the amount you have in your pocket, you reduce the chances of losing but you increase dramatically the amount of potential loss ! Some will perhaps scoff, saying only one chance in 1024 of losing is not much. Let's do another calculation. Say you you set a reasonable threshold gain, say 150 €. You will then repeat this strategy until winning this amount then stop. What are your chances of winning? Approximately 86.4%. That is to say that if you try to earn 150 € with this method, you have 13.6% chance of losing € 1023, which is far from being negligible!
So it's a gamble that may at any time you lose a large sum.
But even if you like the risk you're willing to assume, then you better put his money on a stock market portfolio. That's about the same thing: you risk losing a lot if there is a crack but it makes all the difference with gambling is that on average you earn money stock market *!
Earlier, I told you that there is no strategy to win money on average at roulette but there are strategies that allow 'in lose for sure. How is this possible if the expected gain is zero? In fact, you lose nothing in average if you have unlimited funds. But if like me you have a limited supply of money, by dint of playing, you will eventually need one time or another by having a big stroke of bad luck and lose everything. It can happen very early or very late, after 100 parts or 10000 or more, but to force, it will happen. So it's always a very bad idea to play this kind of game in order to earn money. Only playing for fun to play, hopefully without anything.
A final comment. If there were an easy way to win for sure a lot of money, it would long as people would have exploited. So what kind of pub is always a scam.
Well, I'll watch my episode of The Simpsons. But suddenly, I'll come much later work. Dirt pub.
* Note, I speak good investment, not speculation.
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