Does martingale really works?

[BigMac]

Who's Kelly?

Please read my post right above you for details.

[1714798450]

1714798450

[1714798450]

1714798450

[a1choi]

If you wanna get to the bottom of it, read the wikipedia article.  It's pretty good.

Overall, the key to defeating martingale (if you are the house) is to place a bet limit.  Once there's a highest bet possible, the martingale player has to lose as soon as their local loss streak takes them to the point of butting up against the bet limit.

Note that if you consider a player with a non-finite amount of fundage and no bet limit the martingale is going to clean out the house eventually.  However, these conditions aren't met in real life

That's not why there are betting limits.  It's because of Kelly and in person, because of status.

This.

At 1% house edge, the Kelly criterion is exactly 1%, and there is the original max win for JD.
You could check the wiki page about it for details. http://en.wikipedia.org/wiki/Kelly_criterion

the original kelly bet also had a very high risk of bankruptcy.  Something like 8% was what i calculated...  Kelly is the path to quickest riches but also EXTREMELY risky.

[dooglus]

the original kelly bet also had a very high risk of bankruptcy.  Something like 8% was what i calculated...  Kelly is the path to quickest riches but also EXTREMELY risky.

Are you bearing in mind that the max profit per bet is *always* 1% of the total bankroll, and so it decreases as the bankroll decreases?

I don't think you can really put a number on "risk of bankruptcy" in such a situation.  You can work out the chance of someone taking half the bankroll - say it's 10%.  But then the chance of them taking half of what's left, taking it down to 25% of the starting roll is another 10%, making it 1% overall.  And so on.  The chance of halving it again to 12.5% is another 10%, for a 0.1% chance overall, etc.

At which point do you consider "bankruptcy" when all they can do is keep halving the bankroll?

(Note that the 10% here is completely made up - I've no idea what the real number is.  But nakowa was incredibly lucky and "only" took us down 14% one week and 12% the next.  I expect your 8% is far too high).

[dooglus]

That's not why there are betting limits.  It's because of Kelly and in person, because of status.

There are betting limits because we live in a finite universe, and the house has a finite bankroll.

Kelly tells us how to set those limits, but they exist for bigger reasons.

[dooglus]

you should make a thread with graphs like these...I could read their stories/battles with the investors/site for hours!

People will be more aware of the risk and failure of martingales.
That would probably not bring the best result to the site lol.

I would prefer that everybody understand the risks before they play.  If someone knows the risks, knows that there's a small edge in the house's favour and still decides to play, that's fine with me.  If they think they've somehow found a "system", and then are surprised when they lose, that's not so fine.

I've never tried to convince anyone that gambling is a good idea, and always try to explain the odds to anyone who is interested.

If the whole community one day decides that gambling is stupid and stops playing, that would be a good result for me.  Some of the people bankrolling the site may disagree, and that's OK too.

[cp1]

In person, because of status?  I don't think this is right.

In a Brick and Mortar casinos there are betting limits because rich people don't like to sit with poor people.

[ondratra]

The martingale system doesn't work.

As time passes , you risk an ever increasing amount while having a chance to win only 1 unit.

So , if you've lost 27 bets in a row , your next bet will have a 50% (actually 49.5% chance) of winning , while costing you 1.342 BTC and may win you 1 satoshi on total.

Now , you will realise that you will win 1/134,200,000 of your input , but having a very very low chance of losing till then.

TLDR ; Martingale is a slow system. You basically increase the input continually to reduce your chance of losing everything. It doesn't really ever make you win , the house always wins.

Well I said that like 3 times before in different threads, but once again: Martingle absolutely works!!! It is false to call it not working as it is flawless. Unfortunately it actually does something different that people except when first approaching it.

Long story short betting strategy just changes odds of winning in long run(multiple rounds instead of 1). E.g. that means using some betting strategy on unrelated rounds you might turn your 49.5% in 1 round to 1% in 101 rounds etc.

In equation are always three variables: odds of winning, your starting capital, your starting bet. More starting capital you have the more lost rounds you can survive. Higher is your starting bet the fewer rounds you can survive. And winning odds are obvious...

And finally: assuming positive house edge there is higher probability to lose everything than doubling your starting capital using Martingle(and maybe every other strategy, but I can't say that for sure right now).

Hope it clarified the phenomena.

[zimmah]

Everyone who has been a part of any gambling site must have tried martingale. so i just wanted to know your experience that have u ever gained profit from martingale? or its name should be changed to martinfail?

I never tried it, but by using math I can tell you it will not work. Simply because martingale would only theoretically work if the following conditions are true:

1: the amount of money you have available to bet is infinite
2: the amount of money the house has available to pay you is infinite.

Since there's no such thing as infinite money (maybe the Feds disagree) martingale will not work. At some point you will reach the limits of your finite supply or the finite limits of the house (whichever comes first) and you will lose a fortune.

If you want to gamble you may be better of making an educated guess on stocks or commodities and either long or short them. This will give you much better odds than gambling.

[dooglus]

I never tried it, but by using math I can tell you it will not work.

It can work for quite a long time if you're lucky enough.  If you keep doing it long enough you'll lose, just like with any other strategy.  But you can't say it will never work.

If you want to gamble you may be better of making an educated guess on stocks or commodities and either long or short them. This will give you much better odds than gambling.

I'm not sure that's true.  When you take into account the fees that your broker takes, and the fact that you're effectively competing against people with inside knowledge, you might find that you get better odds playing at a low edge casino than taking on the sharks at the stock exchange.  I would say that for an inexperienced player the odds are worse picking stocks than they are rolling dice.

But you said "educated".  In that case it depends what kind of education you have.  If you know which stock is about to move where, then sure...

[kingscrown]

wit hmartinagle you always loose in the end

[boumalo]

I never tried it, but by using math I can tell you it will not work.

It can work for quite a long time if you're lucky enough.  If you keep doing it long enough you'll lose, just like with any other strategy.  But you can't say it will never work.

If you want to gamble you may be better of making an educated guess on stocks or commodities and either long or short them. This will give you much better odds than gambling.

I'm not sure that's true.  When you take into account the fees that your broker takes, and the fact that you're effectively competing against people with inside knowledge, you might find that you get better odds playing at a low edge casino than taking on the sharks at the stock exchange.  I would say that for an inexperienced player the odds are worse picking stocks than they are rolling dice.

But you said "educated".  In that case it depends what kind of education you have.  If you know which stock is about to move where, then sure...

I think you are totally right for day trading or even monthly trading but if you pick a few high dividend stocks and hold them being able to get compounded interests and low or no taxes on your earnings you can get easily a positive expected return

[ubercool]

I tried so many strategy but nothing work in longer run.

[boumalo]

I tried so many strategy but nothing work in longer run.

Mathematics don't fail, you can alway get lucky and win though; the important thing is to have fun playing and gamble responsably

[dwdoc]

wit hmartinagle you always loose in the end

"always lose"

[adaseb]

Basically unless you have infinite money supply, you will lose.

However the chances of getting 10-15 consecutive losses is rare.

So basically the less you play the better are your odds.


Basically get in and get out asap.

[Light]

Basically unless you have infinite money supply, you will lose.

Even with infinite money - the house betting limit will stop your run if you get unlucky enough to reach it.

However the chances of getting 10-15 consecutive losses is rare.

Not that rare, the chance of losing 10 times in a row is 1 in 1024 and that only applies to future bets, it doesn't take into account your previous bet history (probability ignores the past). So don't go thinking at 9 losses in a row you still have a 1 in 1024 chance of losing.

[dooglus]

Not that rare, the chance of losing 10 times in a row is 1 in 1024

... and that's only if you're betting at 50% chance to win.

People typically play with a slightly lower chance to win, like 49.5%, to cover the house edge and still get paid out 2x on win.

The chance of losing 10 times in a row at 49.5% is 1 in 927

[Phildo]

the original kelly bet also had a very high risk of bankruptcy.  Something like 8% was what i calculated...  Kelly is the path to quickest riches but also EXTREMELY risky.

Are you bearing in mind that the max profit per bet is *always* 1% of the total bankroll, and so it decreases as the bankroll decreases?

I don't think you can really put a number on "risk of bankruptcy" in such a situation.  You can work out the chance of someone taking half the bankroll - say it's 10%.  But then the chance of them taking half of what's left, taking it down to 25% of the starting roll is another 10%, making it 1% overall.  And so on.  The chance of halving it again to 12.5% is another 10%, for a 0.1% chance overall, etc.

At which point do you consider "bankruptcy" when all they can do is keep halving the bankroll?

(Note that the 10% here is completely made up - I've no idea what the real number is.  But nakowa was incredibly lucky and "only" took us down 14% one week and 12% the next.  I expect your 8% is far too high).

You bankroll can never hit 0, but if you are super super super super super ..... super super unlucky the bankroll can get so small, and therefore the max bet so small that no one will play and then you aren't bankrupt according to the rules of monopoly, but you also aren't making any moey.

[Phildo]

Basically unless you have infinite money supply, you will lose.

However the chances of getting 10-15 consecutive losses is rare.

So basically the less you play the better are your odds.


Basically get in and get out asap.

The problem isn't that it's hard to get 10 to 15 losses in a row. The problem is that if you hit that streak you lose way more money than you made along the way.

[dooglus]

You bankroll can never hit 0, but if you are super super super super super ..... super super unlucky the bankroll can get so small, and therefore the max bet so small that no one will play and then you aren't bankrupt according to the rules of monopoly, but you also aren't making any moey.

This is true, but the greater threat is that once the bankroll has halved a few times nobody trusts that the site is ever going to recover its losses and so the remaining bankroll evaporates as people pull out.