Lesson 9 – Money Management – Part 3

Expectation and Standard Deviation

If you flip a coin 100 times, your expectation is to receive 50 heads and 50 tails. But the reality may well be different; the measurement of that reality is called “standard deviation”.

Standard deviation is a mathematical term used to predict the outcome of a situation. In our coin-flipping exercise, we expect 50 heads and 50 tails to occur, but two-thirds of the time the actual result will be somewhere between 45 and 55 either way. That is, a result of 55 heads and 45 tails or something in between is not unusual; it will happen 68.3% of the time. That measurement is for 1 standard deviation from the expectation and if we were to run hundreds of ‘trials’ of 100 flips, we could plot our results on a bell curve and the vast majority of results would fall between 55 and 45 either way. What would be unusual would be to have a lot of trials where the result was actually 50-50! Got that concept in your mind? Good. You’ll need to understand this in order to survive the mental turmoil caused by the losses which are inevitable in this game.

Nothing has caused counters to give up Blackjack more than a lack of understanding about normal, everyday standard deviation. Counters who have trained hard unrealistically expect to win each time they play, so when they have several losing sessions, they forget what they’ve learned. Next thing you know, they’re over betting their bankroll and fail to play their hands properly and when they wake from the daze, their money is gone.

PATIENCE AND SKILL WIN — HUNCHES AND WISHING WILL NOT WIN. PRAYER DOES NOT WORK AT BLACKJACK.

So, what can you expect — what’s the worst which can happen? Well, you can lose all your money, but if you establish a bankroll of at least 50 ‘top’ bets, play proper basic strategy at all times and don’t over bet, you stand a good chance of making some $$$ at Blackjack — if the game at your local casino is a game which can be beaten. Did I ever say this was easy?

The table below illustrates the possible results from varying hours of play at a fairly typical game. Shown with the expectation are the possible dollar results as measured by 1 standard deviation (68.3% of the time) and 2 standard deviations which covers what will happen 95% of the time. Three standard deviations cover what will happen 99.7% of the time.


Expected Win / Standard Deviation
Assumptions: $12 average bet, 50 hands per hour,
1.25% average advantage.

Results
TimeExpected Win68.3% of the time95% of the time
3 hours$22.50+$191 to -$147+$360 to -$316
12 hours$90.00+$428 to -$248+$766 to -$586
48 hours$360.00+$1,036 to -$316+$1,710 to -$992
90 hours$675.00+$1,600 to -$250+$2,525 to -$1,175

Let’s talk about this a bit. If you were to play several hundred ‘sessions’ of 3 hours each, the average win for those sessions would be about $22.50. (This comes from using a $5 to $60 betting spread which we discussed in previous lessons). But few sessions would result in a win of exactly $22.50; about two-thirds would be somewhere between a win of $191 and a loss of $147. Most of the other sessions could see you winning as much as $360 or losing as much as $316 and a few would see wins or losses even bigger than that!

Do you see now why it takes a bankroll of $3000 to support a $5 to $60 betting spread? In order to be successful, you must be able to absorb losses which are many times that of your ‘expectation’. These fluctuations are real; they will happen to you at one time or another and if you’re not prepared for them, you’ll either get frustrated and quit or lose your cool and blow your bankroll.

Now look at the results for 90 hours of play. Most of you will be — at worst — about breakeven after that many hours. A few might be up by $2500, but some of you could be down by $1175 or more. Boy, I’d hate to hear the names you’ll be calling the old GameMaster then! But it can happen and it won’t be unusual if it does, so ask yourself right now if you can deal with playing a disciplined game for 90 hours, still be at a loss and continue playing and betting as I’ve shown you. It’s sad, but most of you won’t be able to deal with that and you’ll be another victim of standard deviation. That’s why I’m not afraid of the casinos going out of business, even if every player in the world learns how to count cards — few have the patience to stick it out. I don’t want to be overly-negative, but that’s the reality. However, if you do stick it out, the percentages will eventually begin working in your favor. As I tell all my students, “the money comes in ‘chunks’ at Blackjack”. This is not a slow, consistent way to make money; your bankroll will, at times, resemble a roller coaster and it’s difficult to deal with that from an emotional point of view.

Just try to understand the concept of standard deviation and continue ‘calibrating’ your eyes by doing deck estimation exercises with six decks. As I’ve said before, you need to be accurate within a half-deck for computing the true count.

Homework

Have a look around the blackjack knowledge base at this site. With over 200,000 posts about blackjack, that should keep you busy. 🙂



All material in the Blackjack School is © Copyright 2007 The GameMaster Online, Inc.

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Cnyguy
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Cnyguy

Did you say that I could play for hours and make $22.50 if all goes well? I can go get a part-time job at the mall and make more than that

LV Bear
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LV Bear

Please post your question on our message board forum for replies. Thanks.

luis
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luis

Ken,

Expected Win / Standard Deviation. Assumptions: $12 average bet, 50 hands per hour, 1.25% average advantage, using be $5 to $60.
Under these conditions I could take a trip to play 90 hours with only 1,175 dollars. In the worst of the hypotheses would lose only 1,175, with good chances of winning back. Is that so?
Casino Rules:
8 decks, H17 , DAS, Late Surrender , Peek , 70 % penetration.

luis
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luis

Ken, I’m playing 8 decks, H17 , DAS, Late Surrender , Peek , 75 % penetration. I threw 200 boxes, 20 boxes a day. 80 % of the time I played alone, just me and the dealer , the other 20 % at the maximum with another player . My bets are fixed : $ 5 in true negative score or = 2. I use also the top ten and leave the table when the true count is too low. The result so far is an average US 495.25 a day, I’m making 4925.50 in total. I’m lucky? I am… Read more »

luis
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luis

Please do not consider.

Jose
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Jose

Hi ken I’m playing in a casino where the rule are:
6 decks, h17, double any two cards, double after split, surrender allowed.
And: the casino have 2 jokers inside the 6 decks, and if in your hand, you have a joker, you win immediately, and the hand end.
I think with this I have pretty great advantage to my side, don’t you think.

Luis
Guest
Luis

Ken,

Expected Win / Standard Deviation. Assumptions: $12 average bet, 50 hands per hour, 1.25% average advantage, using be $5 to $60.
Under these conditions I could take a trip to play 90 hours with only 1,175 dollars. In the worst of the hypotheses would lose only 1,175, with good chances of winning back. Is that so?
Casino Rules:
8 decks, H17 , DAS, Late Surrender , Peek , 70 % penetration.

stefan
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stefan

ken the general rule that your total br must be min 100 times your max bet and the trip br must be 20 times your max bet finds you ok?

and one crusial question !!!!! if my TOTAL br reduces at 50% by the bad variance should I resize my betting or continue like I still have all the money?

Carlos
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Carlos

Ken, I’m having trouble understanding the chart of standard deviation/ expected win. I am not sure if I’m getting this right. So after 3 hours of play, 68% of the time you will be either making $191 or losing $147, and 95% of the time making $360 and losing $316. I am not sure if this means that during the game, your net result can vary from 360 to -316, 95% of the time (ending with a profit of 22.5$) OR that after you finish a game you could either be at +360 or -316. So if you play 150… Read more »

Stefan
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Stefan

Here i am again ken!!! ? Great forum for once again.in the top of this page i see that in 90 hours the money goes from plus 2.500 to minus 1175. Here is my guestion ….. is it possible the bad variance to win the maths and general to loose slowly slowly your bank roll entire?or the spread the correct count are suppurior than all the bad luck of the world.i cant imagine a player loosing 4000 dollars in a 3hours sessions slowly and in the end to fight with his last 1000. Before some times you had told me… Read more »

stefan
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stefan

ken please inform us when your new project will be ready !i wish all the best !

Stefan
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Stefan

Ok ken i understand.thanks again for all your answers and hope to follow u in something new!!

Stefan
Guest
Stefan

Ok maybe i am the only idiot person in here but can u please give me in simple words the diffrence betwinn the meaning of the “standard deviation ” and the “variance”.and also the safety bankroll of the 3000dollars for spread of 5/60dollars make zero the percent of everything goes wrong and u loose all tour money or no?and if no what is the safety bankroll u need for never run out of money with 5/60spread

GP
Guest
GP

Hey Ken i am counting card for almost a year and i always prefer to play alone with the dealer. Lets assume that the true count is +4 and i would bet 40 pounds. Is it better to open 2 or 3 boxes instead of playing in one box? Will i reduce the standard deviation? And will i have more or less profit in the long run?

Jose
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Jose

I’m in Brazil, where casinos are forbidden. So, I need to play in online casinos, using the live blackjack mode. The rules of the casino are: 8-deck game, cut off in the 50% of the shoe, stand on S17, double any 2 cards, double after split allowed, except for the double Aces (only one addition card). Blackjack pays 3:2.

My question is: With these conditions, is it possible to beat the dealer?

max
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max

Sorry Ken, one more question, so you can answer them at once.

You said in previous replies in this topic that someone should stand on a true count 4 and 15 vs dealer’s 10? That’s not what basic strategy says. I mean, basic strategy doesn’t correlate to counting in any way. So I am wondering, what do you actually mean? I didn’t read whole “GameMaster’s school ” yet, so i suppose these are some of the advanced strategies?

Best regards man, and i apologize for being boring.

max
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max

Hello Ken. My casino rules are : surrender(im not sure if it’s early or late), 6-deck game, stand on S17(not sure either), 3 splits allowed, double any 2 cards, double after split allowed. Blackjack pay 3:2. AND: Blackjack with the same symbol of the cards (hearts for example) pays 2:1. If the box has value of “21” with 7 cards in the box, it pays 5:1. If there are three sevens with the same symbol in the box, it pays 5:1. I think those are pretty good rules. Maybe even slight edge is on my side? Can you tell me… Read more »

one2few
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one2few

First, do you have the numbers for the 99.7% of the time for 3 standard deviations, just out of curiosity? What I’m really curious about for this lesson is how you would manage multiple sessions. Since in practice we’ll have to break for sleep, a 90 hour session isn’t realistic, so let’s use the 3 hours sessions as an example. If I save up $3000 and hit the casino per the rules in this example and after 3 hours I’m one of the unlucky ones that’s down $316, then I quit for the night and come back tomorrow. Do you… Read more »

Ra
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Ra

I played DD hit S17 or S17 any casinos but i won a little and down a lot of money.I dont know whats going on i played basic strategy counting cards Hi Low counts.But the problem the positive counts i cant get my big bets and my cards is always bad,
Iam thinking to stay away from the casino.Do i need not to stay my hard 14 or hard 15 against the dealer 20 if the count is +4TC
which remaning 2decks?or less?And how much do i need money to play $50 minimum bet in 1 session?thanks

luis
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luis

Ken ,
They are not 200 hands but 200 shoes.

My balance is too loud ?
This above standard deviation ?

Luis
Guest
Luis

Ken, I’m playing 8 decks, H17 , DAS, Late Surrender , Peek , 75 % penetration. I threw 200 boxes, 20 boxes a day. 80 % of the time I played alone, just me and the dealer , the other 20 % at the maximum with another player . My bets are fixed : $ 5 in true negative score or = 2. I use also the top ten and leave the table when the true count is too low. The result so far is an average US 495.25 a day, I’m making 4925.50 in total. I’m lucky? I am… Read more »

Luis
Guest
Luis

sorry , when the true count and more than 2 I bet $ 50 .