Risk of Ruin

[Lowrider]

Looking for a simple definition of ROR?

Using QFIT's fine CVCX, if I input various parameters and say start with a $10K bankroll and the ROR on CVCX comes up 5%, what does this mean exactly?

A 5% chance of doubling my bankroll before going bust?

A 5% chance of reaching N0 before going bust?

Something else?

Also, one thing I do not understand in CVCX is how the ranges of possible outcomes can show you a negative amount lower than your bankroll? This makes no sense? Example: "90% chance that your winnings will be between -$25,000 and $75,000"

How is this peven possible given a $10k bankroll?


Thanks .... Low

 

[kewljason]

Risk of Ruin looks at two possibilities. Doubling your bank vs losing your bank, so the answer is opposite of your first example: a 5% RoR means you have a 95% chance of doubling your bank vs a 5% chance of losing it all.

 

[blackjack avenger]

from cvcx online viewer

Risk of Ruin -The chance that you will lose the bankroll that you have set at the top of the page.

Generally when we talk about ror it is the chance of losing all before you play. If you play & win your ror is now lower. If you play and lose your ror is higher. The above is for fixed bets.

Why do we play with a ror, when we dont have to? In theory.

 

[Friendo]

Also, one thing I do not understand in CVCX is how the ranges of possible outcomes can show you a negative amount lower than your bankroll? This makes no sense? Example: "90% chance that your winnings will be between -$25,000 and $75,000"

IIRC, this field in the software assumes that you don't resize your bets as the trip goes well or badly. So, assuming you're spreading $25-$250, and that you continue to do so throughout a session of a particular length, no matter how much you win or lose, the 90% confidence interval lies between those two points.

 

[Mersenne Twister]

Looking for a simple definition of ROR?

>Looking for a simple definition of ROR?

In my amateur understanding, definition of ROR is
probability that bankroll hits zero in unlimited number of rounds.

when starting bankroll is X, and a < X < b,
first, thinking Prob=probability that bankroll hits b before a,
you can find its formula of continuous time approximation model somewhere.
then, taking limit of b=infinity, and a=0,
ROR=1-Prob

but, I want to hear math experts' opinion.

 

[blackjack avenger]

simple ror

For fixed bets:
5% ror is your chance of losing all
95% chance of not losing
before you play your first hand

For fixed bets:
As you play
If you win over time your %s improve
If you lose over time your %s get worse

Why does anyone play with an ror?

 

[blackjack avenger]

scary times

Also, one thing I do not understand in CVCX is how the ranges of possible outcomes can show you a negative amount lower than your bankroll? This makes no sense? Example: "90% chance that your winnings will be between -$25,000 and $75,000"

How is this peven possible given a $10k bankroll?

Thanks .... Low

Approximate normal distribution:
1SD 68% of possible outcomes
2SD 95% of possible outcomes
3SD 99.7% of possible outcomes, probably what you want to use.

You do have a chance of going broke. If you kept going you could lose $25k. If you had it.

 

[Mersenne Twister]

sorry for my bad English

For the purpose of usefulness and practicality,
I did some amateur calculations as below.
Sorry for my bad English.

Largest negative fluctuation of win-rate minus A times SD
(1), (2)

Perhaps, there may be mistake, I don't know.
or perhaps just nonsense.