Why are you not willing to put up more? Doesn't that imply that the expected value of this game isn't quite what it seems?
Because I'm worried about your financial health. You should thank me for that. The expected value is 0, as you already showed us. The fact that you owe me such large sum of money is due to pure luck. However, maybe you already have a new (fifth?) explanation for the "fallacy" of my system. Maybe you thought out new formulas for calculating expected values?
If you're referring to the raw coin flip game, you're right. However, sambian's strategy structures it further using the Kelly bit, the parameters of which he can tweak at will. That makes sure he doesn't get into the whole "gambler's suicide" trap.
I have already admitted in an earlier post that I was wrong and apologized. This is an interesting subject and I am trying to help myself understand it. If you don't want to, it's fine with me.
this only ensures his bet size is altered after each discrete time step which does not prevent him from losing more when trends really go against him. It does not happen often, obviously, but it does thats why LTCM went bust, thats why 100 year old investment banks in 2008 went bust, thats why numerous smart (smart in the sense to maximize their own benefits not the ones of their employers) traders get fired each year and re-hired elsewhere. I admit I did not read a lot of posts in between this thread and also did not bother much with his doc links, i guess thats why I am on his ignore, but the point is if an asset trades persistently against you (which may be the one path out of your 1,000,000+ random walk ones) you are either fully hedged in which case you dont lose or make anything (which I think is not the point here) or you have exposure and in this case you lose more than you make no matter which notional you employ. All you are hoping is a reversion. How long do you stay in the game, when do you reset and move on, many unanswered questions which hugely impact your bottom line. Thats why your question about wage size was very relevant.