Math Professor
Posted 03/20/06 at 05:32 PM
John Patrick's forum board.

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Someone quoted John Patrick as saying I don't win much but I don't lose much either.
Now he was critical of this statement but there is a reason for it.

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We who have lived with gambling all our lives understand the relationship between what we win and what we lose.
The Equation is simple enough .

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Magnitude of profit is usually a function of magnitude of wagering.
One of the most common failures in gambling is progressive betting.
Several small wins are satisfying but  when the next small win does not happen and it turns into a progression which often recovers the day but sometimes results in ruination.
Giving up on a progression is hard because losing can mean the erosion of several days work.
The gambling flaw is inherent in this.

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Christopher Pawlicki highlighted this fact.
The equation for winning small returns often calls for a progression .
The progression  ultimately however snatches away the prevous wins.

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For example 20 + 20 +20 +20 +20 has been achieved with 50 + 100 + 80 + 120 + 100  The final destructive act is a 100  that does not recover .Even without a progression 100 absorbs the 5  sets of 20 + wins.

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I call this the 20/100 flaw.
20 is therefore 20% of 100. A good result by any standards.
In order to control the erosion of previous wins the ratio of win to wager
needs to be as close to parity as possible.

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Say 80 + 80 +80 +80 + 80  with 100 + 100 + 100 + 100 + 100
If the 100 goes then we still have nearly 4 days work intact.
We can walk away and get them again another day.
Not many gamblers can achieve 80%.
This is the flaw.

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There must be plenty of gamblers here who understand this but any replies should be better than 3 and out .
The math does not work.

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The answer to the 20/100 Flaw is Brett Morton's MM.
It is based upon safety nets and when to push with flexibility win targets.

So a week might be +80 +50 +40 +60 +40 = 270 where the risk could been around 100, so you would be ahead, overall +170 ...



Now try to rap you mind around this ...

Personally i have to think in new ways as the money management is cruel with no errors.

Now what amount make me happy - i would say 50 Euro would make me feel great.
So that should be my Happy-Point.

Loss-Limit should not be more then my Happy-Point so now i have the Loss-Limit of 50 Euro.
That was easy to set up does guide lines based upon this money management strategy.

50 Loss-Limit
50 Happy-Point

Now when or if i reach Happy-Point and want to continue to next win target Gold-Top - then i can't lose it all as there is a Bottom Line Target - "safety net" - that stops me from losing it all.
I set the BTL 10 Euro as i want as much money i can get to continue for next win target and in the same time not go home with a empty wallet.

50 Loss-Limit
10 Bottom-Line-Target
50 Happy-Point

Now i don't want to rush things so i aim for 70 as Gold-Top - the second win target.

50 Loss-Limit
10 Bottom-Line Target
50 Happy-Point
70 Gold-Top

Lets assume i don't stopp at Happy-Point or stopp at Gold-Top and continue for Jackpot.
Then i can only use the money between Happy-Point and Gold-Top to grind out profits.
Then Happy-Point is my secound safety net.

50 Loss-Limit
10 Bottom-Line-Target
50 Happy-Point
70 Gold-Top
?? Jackpot

You can adjust this strategy as you feel like.
Thump of rule is that you should have Loss-Limit around the same amount as Happy-Point.
Bottom-Line-Target you can set to minimum so you have more money to fight whit as you play for next win target - if you do.

This is also a MM based upon the same principals.

100 Loss-Limit
10 Bottom-Line-Target
70 Happy-Point
100 Gold-Top
? Jackpot

Conclusion is that you can skip one big or huge bankroll and go all in for a small % as noting is due to happen and you will sooner or later lose your bankroll.

This way you can base the methods or session upon your strike ratio.

Win two sessions out of three sessions
Win three sessions out of four sessions
Win four sessions out five sessions

Also know that this strategy set limits how many units you have to play with - so there is no room for any kind of sloppy or fuzzy games.   
 
Explore and find out your own variance ...

Lets say you cut the targets around 33% you might succeed and from that point as you gain experience tight up your game plan.
So the MM could look like this if you win more sessions then you lose.

MM with units ...

100 Loss-Limit
10 Bottom-Line-Target
50 Happy-Point
70 Gold-Top
?? Jackpot

I will from now on only test all my bet selections based upon this MM with different staking plans.
As i remember ND aim to win two session out of three - i guess he use some kind of MM to succeed with he's hit ratio.