Minimal return and I have a hard time believing

Discussion in 'Risk Management' started by r-in, Aug 27, 2010.

  1. r-in


    Not sure I hit the right thread, but interesting more or less trading money management story. A friend who trades using IBD and position trading decided to try an experiment with the lottery. He has been playing for the last 3 months, and is ahead $300+ . He is charting numbers and spent some time going through historical number draws, and is playing based on most common occurences of numbers. He also maintains recent draws and does some kind of discount(not sure if that would be correct term) based on recent history to account for when numbers were drawn.
    He obviously isn't getting rich, but at the same time would this qualify as statistcally significant, as he is ahead.
    To me it is intersesting as for no other reason as does it make lotto land predictable?
    I'll try to update, but he is not real keen on sharing as he feels it may change how the lottery people operate.
    I found it fasicnating.
  2. clacy


    The guy is $300 ahead and thinks the Lotto operators will change how they do things?

    Awesome story, bro.
  3. nLepwa


    You should get a good book on statistics and read it.
  4. r-in


    I have a fair education in stats, and I relearned it while my wife was going through her Masters. The guy never spends more than $10 a week, and as I stated he is $300 to the positive. No claims of amazing returns, but he has been consistent, and not a one time win to get there. I need to double check with him, but I'm fairly certain he said he has won cash 11 times in the last 3 months. I think they draw twice a week in the lotto he is using, so roughly 24 drawings and he has won 11 times and is ahead.
    I will try to get more info from him and post if it keeps up. I will also double check he means he is +$300 over cost and not just +$300 in winnings. I am fairly sure he meant he was +$300 over his costs. Ie he made back cost +$300.
  5. 300 be a lot of dough
  6. He is just on a lucky winning streak. It is Probability you should read, not Statistics. This is why you do not udnerstand it, because you read the wrong subject. Any finite sequence of coin tosses has a non-zero probability to end up all heads or all tails. Only at the limit of infinity this breaks down and you have at least one of the other.

    He will ne out of luck soon. Keep in mind that there has been extensive research and development to redisign lotetry and casino equipment to remove any bias. Every new drawing is a new experiment in Probability sense.
  7. While it is mathematically senseless to analyze the lottery, strangely enough, I have heard stories of people that do statistical analysis on the lottery and win.

    However, the people I have heard of do not go after the most common numbers. Instead they go after the numbers that still need to "catch up."
  8. pspr


    There is only one way to beat the lottery. Get very very lucky. :D
  9. r-in


    No I don't have a degree in Mathematics, or Statistics, Probablity, or whatever,and I'm not trying to make the point I do. I have had classes involved in all the above, but it has been quite a few years also. At the same time, I'm not the one playing. I know my friend has a better back ground in Math and programming, but I'm not implying he has a holy grail for the lottery either. As I said I don't know exactly what he is doing, but that part of it does involve frequency of draw, beyond that he really won't give more detail. I will say he won another $17 this week and says it netted him $12.
    I agree with the idea it can't last, but at what point does he have a valid model, even if only making small amounts week after week. Is he getting rich like everyone on ET, no, but he is coming out ahead in a system that isn't set up to come out ahead.
    I will update as I can, or I'll steal his computer. :D
    #10     Aug 28, 2010