UNDERSTANDING RISK by Bill Channels
Note: By permission from the author, this is an excerpt on "Understanding Risk" from Channel’s excellent new book,
Part F. Understanding Risk If you flip a coin 100 times, your
This chart is expressed in terms of standard deviations that range from 0 to 4, with 0 representing no deviation from expectation (or an exact result of 50-50 in a coin-flipping contest), with 4 being a result roughly equal to 70-30. Notice that the numbers to the left are minus and the ones to the right are plus. That’s because we can experience a "minus 1" standard deviation or a "plus 1" standard deviation but not both at the same time. I labeled one side Heads and the other side Tails in order to represent the fact that we might see a shortage of one, which would cause an "excess" of the other. If we were to experience a 100-flip trial where Heads came up only 30 times and Tails came up 70 times, it would be a 4-SD event on the right side; in other words a "win" by Tails that is far in excess of what we would normally expect.
Nothing has caused counters to give up Blackjack more than a lack of understanding about normal, everyday variance; what most people call "luck." By the way, standard deviation is the square root of variance, but don't sweat the technical stuff; all you need to know is in the chart below, which is expressed in terms of dollars. It’s easy for counters who have trained hard to (unrealistically) expect to win each time they play, so when they have several losing sessions they might forget what they've learned. The next thing you know, they're over-betting their bankroll, fail to play their hands properly - like not doubling when they should - and when they wake up from the daze, their money is gone.
So, what can you expect? What's the worst that can happen? Well, you can lose all your $$$, but if you establish a bankroll of at least 50 "top" bets, play proper basic strategy at all times and don't over-bet, you stand a good chance of making a profit at Blackjack assuming the game at your local casino is one that can be beaten. (Hey, if it were easy everybody would be doing it.) The table below illustrates the possible results from varying hours of play at a fairly typical game. Shown with the expectation are the possible dollar results as measured by one standard deviation (68.3% of the time) and two standard deviations, which cover what will happen 95% of the time. Three standard deviations cover what will happen 99.7% of the time but I do not show that here.
Let's talk about this a bit. If you were to play several hundred "sessions" of 3 hours each (about 150 hands in each session), the Note: You can order a copy of Channel’s book at a discount by clicking here.
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