Risk of Ruin help
- Thread starter stevess75
- Start date
bj bob
Well-Known Member
Mr. Humble
Sonny, You're just too modest. Here I was trying to give you due credit for your analogy and you just pass it off to the Monkey. He already gets his fair share of bananas on this board.:laugh: :laugh:
Because in some crappy games with crappy spreads one may not have even reached N0 after 1000000 hands. So your EV hasn't even reached 1 stan dev yet and your roll is not yet expected to be doubled. In other games your EV might equal many standard deviations and your roll may have doubled a few times so the chances of losing it all are much smaller.
In other words picking a fixed number of hands isn't maybe really the best way to go lol.
moo321
Well-Known Member
Sounds good to me.
As long as you're happy lol.
God forbid you understand the word "lifetime" actually means infinite and deal with it as a theoretical concept like everyone else does.
But OK lol. Glad you're finally satisfied lol. Works for me lol.
Could we make it 15,000,000 hands just for me lol? Would that bother you?
But don't forget if we assume 1000000 hands as a "lifetime", since you are always saying nobody ever says how many hands are actually "played", remember we actually generally mean 1000000 hands "played or seen" rather than actually physically "played" to accomodate backcounters who may actually only physically "play" 10 hands out of every 100 they see.
Or, I guess, if you really wanted to, you could just assume backcounters live alot longer than playall guys lol.
Something to keep in mind when asking about trip bankrolls and their ROR.
Can I win any money by useing the method of 1000000 hands "played or seen" or do I have to actually physically play the hands by putting my money in the box ?
blackjack avenger
Well-Known Member
No Reason to Reinvent the Wheel
If you want to determine a lifetime a million hands, well that is what is covered by the ROR equation. If you want to call it half a million then again that is covered by the ROR equation.
If you want to talk about shorter periods of time; a weekend, then the trip ROR formula is appropriate.
If you want to talk about a longer trip say a month then it approaches the total ROR numbers.
The standard deviation is so so so high that you need a total bank to play for any length of time and a large portion even for a short time.
For a weekend's worth of play you need about half your bank.
It seems like you guys are trying to justify not betting optimally ie. you want to overbet. Optimal means optimal.
Let's say you have a Kelly fixed bank of 10g. However, you decide that you are not going to play millions of hands so you think you can overbet. Don't you realize that if you bet double what you should your ror goes up to about 36% but you only make about twice as much and that is if you don't go broke. You are making twice as much but trippling your risk? Does that sound like a good idea? A 36% chance of going broke means it can happen in the short term. So you don't get to play your 100,000 hands.
The fixed number for escape velocity is about .25 Kelly. At that point is when they cannot beat you down.
If you want to determine a lifetime a million hands, well that is what is covered by the ROR equation. If you want to call it half a million then again that is covered by the ROR equation.
If you want to talk about shorter periods of time; a weekend, then the trip ROR formula is appropriate.
If you want to talk about a longer trip say a month then it approaches the total ROR numbers.
The standard deviation is so so so high that you need a total bank to play for any length of time and a large portion even for a short time.
For a weekend's worth of play you need about half your bank.
It seems like you guys are trying to justify not betting optimally ie. you want to overbet. Optimal means optimal.
Let's say you have a Kelly fixed bank of 10g. However, you decide that you are not going to play millions of hands so you think you can overbet. Don't you realize that if you bet double what you should your ror goes up to about 36% but you only make about twice as much and that is if you don't go broke. You are making twice as much but trippling your risk? Does that sound like a good idea? A 36% chance of going broke means it can happen in the short term. So you don't get to play your 100,000 hands.
The fixed number for escape velocity is about .25 Kelly. At that point is when they cannot beat you down.
moo321
Well-Known Member
For ****'s sake, I've explained this three times, and I'm getting sick of explaining it. Whatever the hell formula you're using is wrong, because eternal risk of ruin is always infinite. ALWAYS. Nothing to argue about, because the chance of any sized negative fluctuation is 100% given an infinite number of hands.
The number you're quoting for "lifetime risk of ruin" is either based on a wrong formula, or it's assuming a number of hands that you aren't aware of. Has anyone even posted the formula they're using?
It's no different than trying to state the lifetime risk of ruin for General Motors. What are the odds that General Motors will ever go bankrupt? THERE'S NO WAY TO KNOW! You can guess, over the next year, next thirty years, next 100 years. But there's no magical number for eternity.
The number you're quoting for "lifetime risk of ruin" is either based on a wrong formula, or it's assuming a number of hands that you aren't aware of. Has anyone even posted the formula they're using?
It's no different than trying to state the lifetime risk of ruin for General Motors. What are the odds that General Motors will ever go bankrupt? THERE'S NO WAY TO KNOW! You can guess, over the next year, next thirty years, next 100 years. But there's no magical number for eternity.
Sonny
Well-Known Member
I think we've already explained why it's not...perhaps a few times. Go back through this thread and read some of the responses to your posts. If there is something that you disagree with I would be happy to discuss it.
-Sonny-
sagefr0g
Well-Known Member
Don Schlesinger posted one inhis book Blackjack Attack. well actually two formulas for lifetime ROR. they are on page 112 & 113.
i'll just reproduce the one on page 112 which was published originally by George C. in How toWin $1 Million Playing Casino Blackjack.
RUIN = [(1-W/sd)/(1+w/sd)]^bank/sd
where:
W = hourly winrate
sd = hourly standard deviation
bank = bankroll in units
If you have the Spanish 21 book by Katarina Walker she explains it on page 77 RISK OF RUIN. Then jump to page 98 RISK OF RUIN CALCULATION. I hope this helps you.
moo321
Well-Known Member
Well, then that formula is clearly flawed. According to this formula, if you play one hand for the rest of your life, or 100 billion, you have the same risk of losing your whole bank. There's no way that your lifetime risk of ruin can be the same for two people who are playing different numbers of hands. It's a logical fallacy, and a mathematical fallacy.
sagefr0g
Well-Known Member
truly i don't know the derivation or understand the reasoning behind the formula. i just know that it is one of two formulas ( there may be more) that are meant to give you an idea of basically you take a hundred players using the same exact betting and playing method, playing the same exact game that have the same exact bankroll and the formula basically is what it does is tells you how many of those one hundred players will lose their entire bankroll whereas the others are expected to be able to play and not lose their entire bankroll (perhaps even come out ahead) over a life time of play. so what you end up with is an idea of your odds of losing your entre bankroll over a lifetime of play.
the formula is not meant to tell you anything about what would happen if you just play one hand or about what would be considered a statistically short term amount of play.
moo321
Well-Known Member
The derivation of the formula involves calculus, because it's based on a number that is theoretically always going up, but could be wiped out at any time by a negative fluctuation.
Probably my biggest complaint is that the formula being used doesn't really tell you anything, because its assumptions are absurd. No bet resizing, never removing or adding money, always playing the exact same game, spread, pen, rules. From a finance perspective, it doesn't really tell us anything.
sagefr0g
Well-Known Member
calculus huh, that's interesting. about 35 years ago i might have been able to follow that. lol
the reason i kind of like the concept is that well for me i'm a really one dimensional player. same crappy games over and over ad nauseum. so to me it just gives me an idea if my bet scheme is going overboard or if i'm hopefully betting with in a reasonable framework. but yeah i can see where it is a limited concept information wise.
Again, the two players are playing an infinite of hands. So maybe "lifetime", implying as it does, a limitation of some kind is a bit of a misnomer lol.
And, you're right, as soon as you put a number on the number of hands, it becomes a different question. Like what is the chance I will go broke in the next 1000000 hands. Or 1000 hands. The larger the number the more the answer will be real, real close to the infinite ROR.
Then's there's other questions like what are the chances I will reach a certain goal, say doubling roll, vs going broke with no time constraint. Or the same goal but with a time/hand constraint like in the next 50 hours or whatever. Perhaps questions like these are the more practical ones after all.
As far as always losing playing infinitely maybe it would help to think of it from the casinos' point of view who are playing a +EV game just like the counter. Probably they've played billions and billions of hands by now and it's pretty hard to imagine encountering a bad enough losing streak that will wipe out every dime they ever made playing BJ lol. In other words they will make money "forever" as you'd expect to be at least possible from a +EV game.
Well if you know your EV per hand in units and SD per hand in units almost all of it flows from there. That's probably the hardest part.
If you're waiting for one formula that will accomodate all games, well, don't hold your breath lol.
That's why people get sims - to see what changes if they bet this way or that way, if the pen changes, if I change how I bet after a win or not, if I use indices or not, etc. Each change of course will effect your EV and SD.
It's just a convention so a back-counter, or anyone who does not play every hand, can compare his hourly win rate to other bj games since he stands around so much counting but not playing. Also useful for people who play every hand and wonder if they can make more money per hour if they back-count.
But if you just want to make it hands physically played, you can do that.
Apparently you don't bother comparing hourly win rates for diff games.
Sonny
Well-Known Member
The difference between 100 billion hands and infinity is insignificant in this case. The formula is raised to the power of Bank/SD so it moves very rapidly. As your bankroll shrinks, your risk increases exponentially. This means that you will likely go broke in the beginning when your bankroll is small, especially if it continues to get smaller. Similarly, as your bankroll grows, your risk decreases exponentially. The more you win, the bigger the negative swing has to be and the less likely it is to happen. You are getting double protection. If you are betting properly then your bankroll will increase faster than the probability of hitting a big enough losing streak. Essentially you are trying to “outrun” the ruin. In this case the results from 100 billion hands will very nearly approach infinity because the exponential movement is so fast.
You’re right, and that’s why we have the short-term RoR formulas. If you want to look at risk for only a certain number of hands then you have to adjust the formula a bit. But, as I explained, you have to be careful when looking at risk from such a shortsighted perspective. You have to know which formula is more relevant to your situation but you often want to know the “big picture” as well. If the players don't have a specific number of hands they plan to play before quitting, or if that number is big enough as in the case above, then Lifetime RoR is a good place to start.
The formula above assumes that you reinvest all winnings back into the bankroll. If you want to add more money periodically then you should use the Renewable Bankrol RoR formula. If you rely on your winnings to pay your bills and cannot reinvest all winnings then you should use a Proportional Reinvestment RoR formula. If you plan on resizing your bets at a certain bankroll size then you can adjust the Lifetime number based on what level you plan on raising/lowering your bets (this is covered in BJA).
There are literally dozens of different RoR formulas for just about any situation. I agree that the Lifetime formula isn’t always applicable, but it is a good place to start. It will give you a general idea of what you’re up against. Once you have a very specific game plan you can start playing with the more specific formulas that will suit your needs. However, as you said, those formulas require more information than simple EV, SD and BR. That is why the Lifetime formula is often used to give ballpark figures in books and on message boards.
-Sonny-