If this was futures trading, does it look like I have a (+) expectancy?

Discussion in 'Trading' started by Fonzy66, Oct 31, 2012.

  1. you sure about that? With a rigged coin that on a 100 tosses flips heads 60 vs tails 40, you sure there is no advantage to bet sizing? Many mathmaticians have tried to explain this to me, but it defies my simple common sense.

    especially like I said, when it comes up tails 40 times in a row.
    #21     Nov 2, 2012
  2. FJMcC


    Getting an exploting an edge at gambling is unfathomably easier than doing the same in trading.

    Any idiot can put out a slot machine with a Negative EV pay structure and make consistent money as long as he has players and a bankroll.

    Any highly intelligent, quick thinking, well capitalized black jack player can create scenarios, depending on house rules, that are considerably +EV.

    Very well connected Sports Bettors with good consultants and the ability to shop for lines and move real volume are so devastating to LV sportsbooks that the casinos have passed laws making it harder for them to get their plays down. Just try making a 2-4 dime play on a NCAA game in Vegas, if you are considered the least bit sharp. If you spread it out over several casinos, they just start calling each other and you are chasing the number before you know it. Basically, if they let you move real volume in LV, over 10K college hoops/football, over 25K NFL, it is because you are a sucker and they know it. In fact, when I worked for some of these groups, we used to try to find/get friendly with bigger gamblers who played pit games, so that we could have them get down action for us.

    In comparison to trading, where the distributions are infinite, gambling is child's play.
    #22     Nov 2, 2012
  3. Your simple common sense doesn't make sense statistically.

    The issue is - "Can bet sizing change a negative expectation to a positive expectation?" and the answer is NO.

    As to 40 in a row - the statistical term is clumping and is a pehenomenon that can be seen in tests that are not of adequate sample size.

    Even with 40 winning hands in a row in a BJ game w/o counting you will still wind up a loser once you have played enough hands to normalize the data.

    It is just like at the wheel or the crap table - nobody ever makes a long term living at either because every bet carries a negative expectation and no manner of bet sizing will change that.

    The logic is in the posts below. As your simple common sense is not getting the job done, maybe you should do the math instead.


    #23     Nov 2, 2012
  4. yeah, you still don't get it. The coin is rigged, it comes up heads 60 times out of 100.
    #24     Nov 2, 2012
  5. CT10Gov


    So what? that probability doesn't change every time you toss a coin. There's an optimal amount you are supposed to bet everything time, unvaryingly. This is one of the easiest problem to solve in statistics beyond 101-level.

    Why do you think your 'common-sense' is better than an actual proveable mathematically result?

    #25     Nov 2, 2012
  6. because most traders are not so sure about their 60% "edge" and don't bet the optimum amount hoping their backtested statistics prove true.
    #26     Nov 2, 2012
  7. at anyrate, you all bet on your coin tosses, I'm about tired of it all, argue all you want, I'll bet on whether I think you are going to bet on heads or tails

    and I'll adjust my bet size depending on how right or how wrong I was
    #27     Nov 2, 2012
  8. Fonzy66


    But there is no such thing as a "trend" in a series of outcomes in a card game. We gamblers call them "streaks" and many believe that they can ride on them.

    It is a negative expectancy game in theory. However, in the real world, some gamblers can just defy the odds consistently.
    #28     Nov 2, 2012
  9. In that particular case - the greater the bet size, the greater the win. The is a manifestation of a positive expectation.

    The OP was about using bet size alone to convert a negative expectation to a positive expectation - which is, of course, impossible.

    #29     Nov 2, 2012
  10. CT10Gov


    ... we are talking about coin tosses, not trading, right?

    Are you shifting the subject because you realize that you can't really defend your position anymore?

    You specifically talked about a coin toss with 60% advantage. Not traders wondering if there's an edge upon seeing a 60% win rate.

    Are you yet another dishonest and scummy poster who has no integrity whatsoever?

    #30     Nov 2, 2012