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Importance of BankRoll in GamePlay

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Jo
Traffic Value: $8,649,585.93592 Spain
1 like this post 0 people
20/03/2014 13:30
An example of Poor BankRoll management in Gameplay:

This is a simplified, and exagerrated example, just to highlight the point. But it applies to 99% of players to one degree or another. And this is why casinos make so much money; with even the smallest of advantages (in fact; they'd likely make money without any advantage - as my extreme example demonstrates):

Lets assume a coin flip game, with 0% house edge.
Thereby 50/50 event. Pays 1:1 (double your money if you win)

If you have an unlimited bankroll. And play 100,000x betting the same amount. You statistically should break even. Thereby the house will make nothing, and you will lose nothing.

However... let's say you have a $100 bankroll.
And you place bets equalling half your bankroll every bet. eg. $50 to start with. If you win the first bet your bankroll goes up to $150, for which you then bet $75. And if you win again, your bankroll goes to $200; for which you bet $100 (50% every time)

The odds of you losing twice in row at 0.5*0.5 = 0.25 (1 in 4) So straight away; you've got a 1/4 chance of losing everything.

So if you make 8 bets like that; statistically you should lose everything twice!

And let's say after losing, you deposit another $100. And repeat. And again, within 8plays, you statistically should lose everything again!

Even though overall, your wins and losses are going to average out to 50/50. The fact that every time you have a negative swing of two losses in a row; it'll wipe you out... So just through lack of bankroll; you're losing in a game that is 100% fair and has 0% advantage! You're literally guaranteed to lose like that.

LL-- = 100% loss
WLL- = 100% loss
WWLL = 100% loss
WWWWWWWLL = 100% loss
WLWLWLWWWWLL = 100% loss

The only thing bankrupting you; is your bankroll.
As every single negative swing; which are inevitable! They'll happen every 4 plays on average. Wipes you out. Any and all winning streaks, are completed negated with any 2x losing streak.

And every single time you lose a couple bets in a row; you lose everything.

So like this.. you can keep depositing $100 however many times you like. And you'll keep losing $100 almost every single time! Until those 100 losses have amounted to tens of thousands in losses!

So now... you've played hundreds of thousands of times. You've had winning streaks. And losing streaks. And overall you should have broken even. But somehow you've managed to lose tens of thousands of dollars. When statistically you shouldn't have lost a single dollar given the quantity of bets you've placed.

---

Betting 50% of your bankroll every bet; isn't realistic. But the same applies to whatever value you put in there;

Lets say you bet 10% of bankroll every bet... Thereby everytime you lose 10 in a row; you bankrupt yourself... The odds of this are lower / less frequent. But they still apply, and they affect your payout ratio.

----

So tips to take away from this;

1) You need sufficient bankroll whenever playing any casino game... So that no matter what the losing streak; you can keep on playing the exact same amount to let the averages pan out.

2) Don't climb your bet amounts up.
You may start out sensible; with $1 bets on a $100 roll. But after a while you start doubling up or whatever. And before you know it you're placing $50 bets with a $100 roll. Now your only 2 losses away from bankruptcy again. And that's as good as inevitable... And completely negates all your initial sensible play.

----

If you look at todays play logs:
http://mytrafficvalue.com/gameplay/2014-03-20.html

Compare GroFinTags with thiagopompeu - that's the difference between disciplined gameplay and wreckless (no bankroll mangement)

Both placed a few hundred in total bets. The first did that via 800+ bets of $0.25. Whereas the second did that via just 8 bets of $25-50... The averages panned out for the first guy; and he even made money! But the one without bankroll management; inevitably lost it all.

Because 8 bets; there's no averages possible there!

---

Anyway, just something i'd share with you. As I find it fascinating. How you can lose a ridiculous amount of money in game where you should about break even. And you've got nobody to blame other than yourself! It's genius // almost defies the rules of the universe on first impression - but completely plausible when you think about it.
Jo
Traffic Value: $8,649,585.93592 Spain
0 like this post 0 people
20/03/2014 13:51
And here is another thing i've observed; slightly contradictory to the first point - but similar theme:

You start out with $100 bankroll.
You place some big bets.. say $10 each. Win/Lose. And after a while you end up losing half your money; so now you're down to $50 bankroll.

And from this point forward; you decide to play "sensibly" (or in fear of losing everything) and make your bets real small again.

At this point, it's pretty much impossible to win your money back. As if you're playing coin flip for example; with $1 bets... you've got to win 50x more than you lose. Just to break even.... So now you've got odds of 0.00000000000008% just to get your money back (125trillion to 1)

Needless to say; you're going to lose!

Whereas in this situation; if you keep placing $10 bets... You only need 5 wins in a row to get back up; which is still long odds; but far more likely at 1/32

Or if you go big... you've got 50/50 odds at doubling your $50 up to $100. 1 in 2 of breaking even.

But with all of the above examples; you can see that your battling long odds just to get your money back... As through some initial wreckless play that you couldn't really afford to sustain; you've put yourself in a corner.

So there again, you're going to lose. Even in a fair game without any house edge.
Jo
Traffic Value: $8,649,585.93592 Spain
0 like this post 0 people
20/03/2014 13:59
ps. The odds of doubling up $50 to $100 in coinflip aren't 125trillion to 1. That's the odds of winning 50x in a row.

Whatever the odds actually are; with few wins, lose one, few wins, lose one etc... still an un-necessary long shot!
slosumo - Administrator
Traffic Value: $28,438.4426 Slovenia
0 like this post 0 people
20/03/2014 14:09
Yeh it's amazing how this works yet so many people do it exactly like you described - increase their bets when on a winning streak. If anything, you should cut your bets after a big win.

Just be careful though when cutting your bets if you ever play at casinos with bonuses offered, that have play through requirements. As many casinos use the "improper game play" excuse to void you of your winnings if you suddenly cut your bets after a big win, while playing with bonus cash, because as in Jo's nice example it's much easier to wage a lot using small bets relative to your bankroll. Personally when I sometimes play at casinos I make bets never more than 1/100th of my initial bankroll.

Depends what you are playing for though. If you're looking at hitting a jackpot/clearing bonuses and possibly making some money then low bets are the way to go. But if you're there just for the rush and using money you can easily be without, then I can understand the heavy betters ^^  
tupko
Traffic Value: $32,122.18249 Croatia (LOCAL Name: Hrvatska)
0 like this post 0 people
20/03/2014 20:21
exactly, it's very simple, losers increase their bets when winning and winners increase their bets when losing considering their initial bet is at least 1/100 of bankroll or lower
tupko
Traffic Value: $32,122.18249 Croatia (LOCAL Name: Hrvatska)
0 like this post 0 people
20/03/2014 20:25
and the amount of bet increase depends on payout ratio, bigger payout ratio = less bet increase, pure math
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