RTM

for the newbies,

who want to understand,

what is RTM,

and VARIANCE,

let me try to explain in simple example.

=======================

RTM=regression toward mean.

Variance =the losing hit keep coming,

while the winning seem stubborn to hit.

==========

RTM.

oversimplified example..

lets play a game.

Say, inside a bag,

there 50red and 50black

ping-pong balls.

You take out,draw,

one ball at a time,

and NOT putting back the ball,

into the bag.

You cast the ball away.

u set aside the ball.

Then, everytime u take a ball out,

u note down, the color of the ball,

on a piece of paper.

After 100th ball ,

taken out,

you will see that,

if red value=1,

black=-1,

simply mean,

red, u win,

black , u lose.

At the 100th ball,

the result,

win/lose =ZERO value,

no win, no lose,

and

the probability of,

WORST VARIANCE,

=-50 NEGATIVE,

streak of 50losses.

OR,

=+50 POSITIVE...variance...

streak of 50wins...

No matter, whether,

you win,

best profit=+50,

or lose ,

worst losses=-50,

at the end, the 100th ball,

the value will,

return to mean=0.

The 50red/50black balls-in-bag,

is a 'FIXED' with no EDGE game.

The best win possible=+50,

and worst possible=-50,

if you CHART the profit/loss,

as a single LINE chart,

from 1st ball, to the 100th ball,

and after many sets of games,

u will see the line move up and down,

and the LAST profit/loss=0value,

that REGRESSION TO MEAN.

RCTM,

mean ,

regression CLOSER to mean,

the end line of profit loss,

due to unlimited 'balls',

and EDGE, and variance,

and unlimited spins,

only come close to zero,

as a probability.