Does martingale really works?

[PacoMartin]

The mathematics of Martingale are actually well understood. A typical brick and mortar casino will often have a $10 minimum and $500 maximum or a ratio of 50 to 1.
$10 first bet
$20 2nd bet
$40 3rd bet
$80 4th bet
$160 5th bet
$320 6th bet
$630 minimum required bankroll to play Martingale.

So if you are playing Martingale the minimum number of plays to double your $630 bankroll is 63 plays (at which point you will be kicking yourself for playing only $10 each time). The maximum number of plays required is  6*63=378 plays.

Now this is the important point that people forget to calculate. What is the average number of plays to give you a streak of six losses in a row? It is 126 plays for coin flipping, 120 plays for Just Dice, 110 plays for European roulette, and 97 plays for American roulette.

So choose your game, and ask how many units you will be ahead in the expected number of plays. How likely are you to double your bankroll?

[jagallout]

In case anyone is interested in living vicariously; here is a powershell script that simulates martingale betting.

Code:

#Run Variables
$bankRoll = 100 #starting bankroll
$bet = 1          #starting bet

$multiplier = 2 #Calculates Payout

#Three Variables Calculating Percentage accuracy and win threshold
$minBound = 0
$winThreshold = 50
$maxBound = 100

#Counters
$maxProfit = 0
$seedDuplicates = 0
$i = 0 

$seeds = @() #for tracking seeds to make sure they are always different

Clear-Host #clear the screen

while ($true)
{
    #better random seeds (check seed history: generate new seed if history matches)
    $seed = ($(Get-Random) + $(Get-Random)) * .001 #Must be a valid INT number so reduce a couple decimal places
    while($seeds -match $seed)
    {
        $seed = ($(Get-Random) + $(Get-Random)) * .001
        $seedDuplicates++
    }

    $seeds += $seed #add seed to history

    if ($($bankRoll - $bet) -ge 0)
    {
        $bankroll = $($bankroll - $bet) #Deduct next bet from Bankroll
    }
    else #BUST
    {
        Write-Host -ForegroundColor Red "BUSTED"-NoNewline; Write-Host " After $i Rounds"
        Write-Host -NoNewline "Max Profit was "; Write-host -ForegroundColor Green "`$" -NoNewline; Write-host -ForegroundColor Green $("{0:N2}" -f $maxProfit)
        Write-Host "$seedDuplicates Duplicate Seeds"
        Break
    }

    #Keep track of tests profit cap - Remeber you would have had to cash out here
    if ($bankroll -gt $maxProfit) {$maxProfit = $bankRoll} 
    
    #Roll the dice...
    $r = Get-Random -Minimum $minBound -Maximum $maxBound -SetSeed $seed

    if ($r -gt $winThreshold) #Win Condition
    {
        #Write-Host -NoNewline "Seed($seed)=$r "
        Write-Host "BET: `$$bet -- " -NoNewline
        Write-host -ForegroundColor Green "WIN  : " -NoNewline
        $bankRoll = $bankRoll + $($bet * $multiplier)
        $bet = 1
        Write-Host "Bank = `$" -NoNewline; "{0:N2}" -f  $bankroll
    }
    else #Loss
    {
        #Write-Host -NoNewline "Seed($seed)=$r "
        Write-Host "BET: `$$bet -- " -NoNewline
        Write-Host -ForegroundColor Red "LOSE : " -NoNewline
        $bet = $bet * 2 #martingale doubles every loss
        Write-Host "Bank = `$" -NoNewline; "{0:N2}" -f $bankroll
    }
    $i++ #loop counter
}

[Wardrick]

The mathematics of Martingale are actually well understood. A typical brick and mortar casino will often have a $10 minimum and $500 maximum or a ratio of 50 to 1.
$10 first bet
$20 2nd bet
$40 3rd bet
$80 4th bet
$160 5th bet
$320 6th bet
$630 minimum required bankroll to play Martingale.

So if you are playing Martingale the minimum number of plays to double your $630 bankroll is 63 plays (at which point you will be kicking yourself for playing only $10 each time). The maximum number of plays required is  6*63=378 plays.

Now this is the important point that people forget to calculate. What is the average number of plays to give you a streak of six losses in a row? It is 126 plays for coin flipping, 120 plays for Just Dice, 110 plays for European roulette, and 97 plays for American roulette.

So choose your game, and ask how many units you will be ahead in the expected number of plays. How likely are you to double your bankroll?

Also in the end using the martingale system you end up risking $340, and all previous bets to make $10. I think you mentioned that. You'll  be continuously risking $100's of dollars just to make $10, in the end the odds and the edge will always screw you over.

[boumalo]

The mathematics of Martingale are actually well understood. A typical brick and mortar casino will often have a $10 minimum and $500 maximum or a ratio of 50 to 1.
$10 first bet
$20 2nd bet
$40 3rd bet
$80 4th bet
$160 5th bet
$320 6th bet
$630 minimum required bankroll to play Martingale.

So if you are playing Martingale the minimum number of plays to double your $630 bankroll is 63 plays (at which point you will be kicking yourself for playing only $10 each time). The maximum number of plays required is  6*63=378 plays.

Now this is the important point that people forget to calculate. What is the average number of plays to give you a streak of six losses in a row? It is 126 plays for coin flipping, 120 plays for Just Dice, 110 plays for European roulette, and 97 plays for American roulette.

So choose your game, and ask how many units you will be ahead in the expected number of plays. How likely are you to double your bankroll?

You have better odds if you play 500$ to get 630$ in one bet It may be less fun because you will play less but mathematically speaking your expected loss is lower

[PacoMartin]

You have better odds if you play 500$ to get 630$ in one bet It may be less fun because you will play less but mathematically speaking your expected loss is lower

There was an phrase for simple casinos in Old Las Vegas. They were called "grind houses" because people were said to grind away their money by making repeated bets, where the house edge works it magic on the entire group of players. But I think many people understand that. The Wizard of Odds describes the house edge as a kind of entertainment tax. He encourages people that if they are paying an entertainment tax, to look for games where the tax rate is low. It doesn't get any lower than Just Dice.

If you enjoy Martingale, then by all means play it. It doesn't increase the house edge, but it's danger is that you break up your goal (for example doubling your money) into smaller and smaller units. The more units of betting you have, the more the house edge grinds away your money.

And there is a an average number of plays before you get a streak of length k. Any discussion of Martingale without mentioning this average is woefully inadequate.  For coin tosses (no house edge) with even money payback the average is 2^(k+1)-2. So for 6 losses in a row, it is 126 plays. If you add a house edge that average is lower. For JD it only drops to 120. There is a lot of variation on that average in real life, but if you are playing 6 loss Martingale, and you've won 200 cycles, then you have beaten the odds.

If you need to see a simulation then here is a simple one on a spreadsheet for two losses in a row for a coin
https://docs.google.com/spreadsheet/ccc?key=0Aor7l039-pqHdDR1SXNONV9KQW1Id3F6cGQ0bUdPblE&usp=drive_web#gid=0
Theoretically the average number of plays for a streak of two losses should be 6 (=2^3-2).


Personally, I think JD compared to "boxcars" in craps is a good bet. Throwing boxcars in a craps games has odds of you winning 1/36=2.77778% . The payout is 31X. In comparison in JD you can play odds of winning of 3% and have a payout of 33X. In most casino games if you want a jackpot, then you must play a bigger house edge (i.e. bigger thrill, bigger tax). But not in JD.

[Icardi09]

You have better odds if you play 500$ to get 630$ in one bet It may be less fun because you will play less but mathematically speaking your expected loss is lower

i've tried this method and lose (90% chance to win)
i think casino knows my method and make me lose
no, house edges works and 10% chance to loss show itself to me

[zimmah]

Yes, just dice is a great website with low house edge but eventually you'll still lose money on average, just not as many as with regular casinos.

And the chance to beat the odds against just dice is higher.

In fact justdice players had 100.05% luck up until now so the actual house edge (historically) was 0.95%

[boumalo]

Yes, just dice is a great website with low house edge but eventually you'll still lose money on average, just not as many as with regular casinos.

And the chance to beat the odds against just dice is higher.

In fact justdice players had 100.05% luck up until now so the actual house edge (historically) was 0.95%

Yes and the site profit is only 0.35% of the amount wagered (Because of Nakowa...)

You have better odds if you play 500$ to get 630$ in one bet It may be less fun because you will play less but mathematically speaking your expected loss is lower

i've tried this method and lose (90% chance to win)
i think casino knows my method and make me lose
no, house edges works and 10% chance to loss show itself to me

I bet you didn't only bet once @ 90% on JD since you first registered...

[SnakePlisken]

My bank account will tell you that no, it most certainly does not 

[leex1528]

My bank account will tell you that no, it most certainly does not 

I don't think you have the right to say a strat doesn't work unless you have tested it and found it has mathematically worse odds then say, just gambling...

I think Martingale is the best strat you can do to make money...Yes, you will lose if you keep playing.  Knowing when to quit and quitting is not what makes a good/bad strategy

[sandykho47]

I think it's imposibble, expect :
- You have very big luck 
- You have very much $/BTC to start
- Gambling place/site allowed to bet with very small amount
- Gambling system is stupid


If martiangle works, all gambling sites/place already gone 
and I think gambling never make profit in first place 

[boumalo]

My bank account will tell you that no, it most certainly does not 

I don't think you have the right to say a strat doesn't work unless you have tested it and found it has mathematically worse odds then say, just gambling...

I think Martingale is the best strat you can do to make money...Yes, you will lose if you keep playing.  Knowing when to quit and quitting is not what makes a good/bad strategy

You don't change the odds of the house thus you have a negative expectation and in average if you want to win for exemple 50% on your money you will bet more to win the same amount as you would in a single bet so your expectation is worse

[dooglus]

Yes, just dice is a great website with low house edge but eventually you'll still lose money on average, just not as many as with regular casinos.

For most players I think it's more like:

You lose the same amount, but it lasts much longer at JD.

People tend to keep playing until they lose their deposit.  It's just a matter of time.

Sometimes they manage to withdraw while they're ahead.  And sometimes they even manage not to re-deposit it!

[trand]

martingale only work in sort term but if you use it for long term please think twice

[PacoMartin]

People tend to keep playing until they lose their deposit.  It's just a matter of time.

This point is often made about discussing house edge. Many people believe that a casino doesn't really need a house edge, since the majority of people tend to gamble away their money. Most people dream of turning their stake into a 100X jackpot, and basically would rather keep risking it all instead of winning just a little.

What do you (somebody besides dooglus) think about the need for a house edge?

[chaosPT]

Yes, just dice is a great website with low house edge but eventually you'll still lose money on average, just not as many as with regular casinos.

For most players I think it's more like:

You lose the same amount, but it lasts much longer at JD.

People tend to keep playing until they lose their deposit.  It's just a matter of time.

Sometimes they manage to withdraw while they're ahead.  And sometimes they even manage not to re-deposit it!

I like the last word " they even manage not to re-deposit "

But i am always the opposite LOL

[boumalo]

Yes, just dice is a great website with low house edge but eventually you'll still lose money on average, just not as many as with regular casinos.

For most players I think it's more like:

You lose the same amount, but it lasts much longer at JD.

People tend to keep playing until they lose their deposit.  It's just a matter of time.

Sometimes they manage to withdraw while they're ahead.  And sometimes they even manage not to re-deposit it!

If you lose you are not going to stop playing what you have left and if you are winning why not keep playing a bit?

[Phildo]

People tend to keep playing until they lose their deposit.  It's just a matter of time.

This point is often made about discussing house edge. Many people believe that a casino doesn't really need a house edge, since the majority of people tend to gamble away their money. Most people dream of turning their stake into a 100X jackpot, and basically would rather keep risking it all instead of winning just a little.

What do you (somebody besides dooglus) think about the need for a house edge?

Why rely on luck? If someone will play a game with a house edge, why offer a better game and hope for luck or something else to make you money?

[qxzn]

People tend to keep playing until they lose their deposit.  It's just a matter of time.

This point is often made about discussing house edge. Many people believe that a casino doesn't really need a house edge, since the majority of people tend to gamble away their money. Most people dream of turning their stake into a 100X jackpot, and basically would rather keep risking it all instead of winning just a little.

What do you (somebody besides dooglus) think about the need for a house edge?

I think you'd be hard pressed to find any rational investors. The house edge is the source of all the returns, the rest is just variance/luck.

You're basically saying that you'd rely on the fact that the house has a bigger bankroll, to ensure that you win rather than lose. What's to stop a whale with a bankroll as big as the house from coming in and taking everything?

If there's 10k BTC sitting in the house, what's to stop a group from pooling together 30k BTC to go and nab that 10k?

It won't work without an edge.

But if you'd like to try it and see for yourself, by all means.

[dooglus]

This point is often made about discussing house edge. Many people believe that a casino doesn't really need a house edge, since the majority of people tend to gamble away their money. Most people dream of turning their stake into a 100X jackpot, and basically would rather keep risking it all instead of winning just a little.

What do you (somebody besides dooglus) think about the need for a house edge?

There was a whole thread about this recently.  OP basically was saying he was thinking of opening a 0% edge casino because "players play until they lose" and that aspect of player psychology would give his 0% edge casino an effective edge.

I think I managed to convince him (via simulation, ultimately) that it was a bad idea. Random walks without an edge pulling you down often go very high. You can have 5 players who play until they lose their $100 deposit, but if the 6th player gets lucky he can easily turn his $100 deposit into several thousand.

I'll see if I can dig up the old thread.

Edit: here it is -- https://bitcointalk.org/index.php?topic=639787