Make Money While Cruising - List

[Certeza]

Originally Posted by denverd0n

Yep. Just like with gamblers. My mother in law will come home from the casino and say, "I made $60 on the slot machines!"

Translation: "I spent about $100 on the slots, and got back about $60 of it."

Speculators (being just another form of gambler) do exactly the same thing.

I can agree with that statement if it says "most" speculators...

Most people don't understand why visiting a casino is gambling and how trading differs. It all has to do with the house edge (expectancy ratio). Every bet in every game in a casino has a house edge that provides positive expectancy for the casino, and thus negative expectancy for the player. That is why casino patrons are gamblers. But I think a simple illustration might better demonstrate the difference.

Imagine I presented a weighted coin that would favor one side 55% to 45% instead of the usual 50/50. The payout is 1:1.

In the first case, imagine that I inform you up front that the coin is rigged, but I don't tell you which side it is rigged toward. You call "heads" on the first toss and win. Were you gambling? Yes, because regardless of the outcome, you had no idea if the coin was weighted in your favor or not. You don't have a positive statistical expectancy going into the bet.

Secondly, imagine that I told you it is weighted to favor "heads". The payout is still 1:1. You call "heads" and lose. Were you gambling? No, because even though on that particular toss you can't be certain of the outcome, over the course of 1,000 tosses you have a statistical expectancy of 10%. Over 1,000 tosses, you are going to make very close to $100. You don't need to be able to accurately predict every toss.

Third, imagine that the coin still favors heads, but the payout for a win is $1.25. If you call "heads" you're still not gambling right, because the coin favors heads? Wrong! Because of the payout change, calling the most likely outcome results in a negative expectancy of 1.25%. Meaning that over 1,000 tosses, you're going to lose $12.50. In this case, the non-gambling bet is for the less likely outcome.

Gambling has nothing to do with 100% certainty of any single outcome. It has everything to do with knowing your edge before starting the transaction. That's why the casino isn't ever accused of gambling with its money. It knows that it has a positive edge against the player on every bet in every game. Same goes for "speculation". If the trader can demonstrate an accurate and quantifiable edge before any transaction, they aren't necessarily gambling, provided they don't bet the farm on a single transaction. If not, they most certainly are gamblers.

[ArtM]

Originally Posted by Certeza

Same goes for "speculation". If the trader can demonstrate an accurate and quantifiable edge before any transaction, they aren't necessarily gambling, provided they don't bet the farm on a single transaction. If not, they most certainly are gamblers.

This is not entirely true.

In gambling, it is possible to create a positive edge through betting systems. Betting systems are the direct equivalent of cash management in speculation systems.

Example:
Find a roulette wheel and bet $5 on black. Every spin, double the bet. Eventually that wheel WILL hit black, and when it does you WILL make $5.

Where does this fail? It fails after 7 spins when you hit the table limit. You can move to a higher limit table and try another 7 spins, but eventually you will hit the house limit.

What is the likelihood of hitting 14 reds in a row (by which time you have put out $163,000 protecting a 5 bet)? The answer is that it is "finite". No matter how long you can protect your bet, no matter how high the house limit, there is always a "finite" possibility that you will get some many reds in a row that you will lose all your money.

Speculative gambling systems that are based on narrow statistical margins also have a "finite" possibility of failing so many times in a row that it wipes out your cash. The more you try to apply cash preservation techniques, the more you limit your potential profits until you are finally sitting behind a screen 8 hours a day scratching for pennies.

As an example, I used a speculative system that depended on the market not declining more than 25% in 9 months. A reasonable bet, except that the market that year fell 50% in about 6 months, and I was wiped out just before the market rebounded. This is just as though I had put a million dollars into my roulette system, then the wheel hit "black" on the very next spin after I lost all my cash.

A better system (IMO) is to show up every week with all my spare money and make a single bet - whether on options or on a roulette.

If I lose, I spend that week watching TV and scratching up part time work.

If I win, I spend that week having a great time and treating all my friends at the bar.

[Coops]

I tried a system that somebody told me for roulette. You wait until you get one colour in a row for seven times, then you bet on the other colour. You have to triple the bet if you lose to come out ahead. You also have to hope that the colour comes up before the house bet limit.

This system worked as long as you stated what you wanted to win, say $100, for the day, then walk.

Next day same again. I did this for 5 days to prove the point, then could not stand the boredom anymore. Have you any idea how long you have to wait for the same colour to come up seven times in a row?

I am not a gambler( This was a one off to prove a point) so did not even like being in the casino, but you watch the mentality, or rather mindset, of some gamblers and you just think, born loser. Even if they get a decent win, they plough it all back in looking for the "big one".

Coops.

[jeanathon]

Yawn. Are we still talking about the market?
What about pirating? Worked for the mouse.

[Certeza]

Originally Posted by ArtM

This is not entirely true.

In gambling, it is possible to create a positive edge through betting systems. Betting systems are the direct equivalent of cash management in speculation systems.

Example:
Find a roulette wheel and bet $5 on black. Every spin, double the bet. Eventually that wheel WILL hit black, and when it does you WILL make $5.

Where does this fail? It fails after 7 spins when you hit the table limit. You can move to a higher limit table and try another 7 spins, but eventually you will hit the house limit.

What is the likelihood of hitting 14 reds in a row (by which time you have put out $163,000 protecting a 5 bet)? The answer is that it is "finite". No matter how long you can protect your bet, no matter how high the house limit, there is always a "finite" possibility that you will get some many reds in a row that you will lose all your money.

Speculative gambling systems that are based on narrow statistical margins also have a "finite" possibility of failing so many times in a row that it wipes out your cash. The more you try to apply cash preservation techniques, the more you limit your potential profits until you are finally sitting behind a screen 8 hours a day scratching for pennies.

As an example, I used a speculative system that depended on the market not declining more than 25% in 9 months. A reasonable bet, except that the market that year fell 50% in about 6 months, and I was wiped out just before the market rebounded. This is just as though I had put a million dollars into my roulette system, then the wheel hit "black" on the very next spin after I lost all my cash.

A better system (IMO) is to show up every week with all my spare money and make a single bet - whether on options or on a roulette.

If I lose, I spend that week watching TV and scratching up part time work.

If I win, I spend that week having a great time and treating all my friends at the bar.

You are referring to martingale systems. They have been statistically proven as losing systems countless times in both trading and gambling, but that doesn't seem to prevent unwary novices from trying it, to their detriment.

Positive expectancy cannot be created through martingale or any similar betting system. It either exists or it doesn't. They simply change the speed of losses.

The table limit is not there to prevent you from creating positive expectancy, it is there as a money management measure by the casino. It ensures that they don't have to endure large losses while they wait for their ever present expectancy to be realized through the law of large numbers.

[Certeza]

Originally Posted by Coops

I tried a system that somebody told me for roulette. You wait until you get one colour in a row for seven times, then you bet on the other colour. You have to triple the bet if you lose to come out ahead. You also have to hope that the colour comes up before the house bet limit.



This system worked as long as you stated what you wanted to win, say $100, for the day, then walk.



Next day same again. I did this for 5 days to prove the point, then could not stand the boredom anymore. Have you any idea how long you have to wait for the same colour to come up seven times in a row?



I am not a gambler( This was a one off to prove a point) so did not even like being in the casino, but you watch the mentality, or rather mindset, of some gamblers and you just think, born loser. Even if they get a decent win, they plough it all back in looking for the "big one".



Coops.

Anyone thinking about trying this, lookup "gamblers fallacy". Waiting for a string of reds has absolutely zero effect on the next spin. It DOES NOT increase the odd of success. The only thing it succeeds in is wasting time.

[Coops]

Originally Posted by Certeza

Anyone thinking about trying this, lookup "gamblers fallacy". Waiting for a string of reds has absolutely zero effect on the next spin. It DOES NOT increase the odd of success. The only thing it succeeds in is wasting time.

Oh I cannot agree more. I was merely putting to the test what was said to me. It did work for the few days, and I completely understand that the next number is a 50/50 bet. I also agree that it was a totally boring waste of time.

Coops.

[Certeza]

Originally Posted by Coops

Oh I cannot agree more. I was merely putting to the test what was said to me. It did work for the few days, and I completely understand that the next number is a 50/50 bet. I also agree that it was a totally boring waste of time.



Coops.

😄👍 nice

[Coops]

One more thing, as always. I am quite obviously not cut out to be a gambler. $5 becomes $15, becomes $45, becomes$105, then I started to get jittery and wanted to pull out. When it got to $945 once, and once only, I knew that if it did not win I was not going again. That is another reason that I stopped.

PS I won. Phew!

Coops.

[Sondor]

Certeza, I don't have a lot to offer this discussion, but you stole my Martingale thunder, so I'll simply respond with my 100% effective gambling strategy*

Drink booze (realizing it's gonna be the most expensive "free" drink you've ever received):

Play Craps since you should have your wits about you when playing this game. Use the first of three parcels of stash (I use $50x3) money until gone (trivia: Only game in the casino where the player can have a statistical edge over the casino w/o card-counting? Craps)

Lose that first stash

Drink more:

Play Blackjack until you make a basic error or two and realize you may be getting a bit inebriated

Drink:

Lose the second of your three stashes

Drink:

Play Roulette (single zero (euro-style table) only as the odds against you are 2.73% instead of the 5.26% found in American tables w/ 0 and 00)) until the spinning wheel makes YOUR head spin too...

Drink:

Somehow break even!

Drink:

Stumble over to the slots... Keep drinking and inserting coins at random until you fall off the stool. Three times.

Drink:

Call it a night...

100% guaranteed "WIN!"

*Assuming your goal isn't to win money...

[ArtM]

Originally Posted by Certeza

You are referring to martingale systems. They have been statistically proven as losing systems countless times in both trading and gambling, but that doesn't seem to prevent unwary novices from trying it, to their detriment.

Positive expectancy cannot be created through martingale or any similar betting system. It either exists or it doesn't. They simply change the speed of losses.

The table limit is not there to prevent you from creating positive expectancy, it is there as a money management measure by the casino. It ensures that they don't have to endure large losses while they wait for their ever present expectancy to be realized through the law of large numbers.

I disagree on both points.

First, the Martingale system is a guaranteed winning system, regardless of expectancy, if you have infinite resources.

Secondly, positive expectancy doesn't alter that result, except to change the rate at which you are at risk for loss. The only way you can guarantee a winning result is again to have infinite resources.

Positive expectancy decreases the likelihood of total failure, but doesn't solve it. Unless the positive expectancy > 100%, there is always a finite possibility of making any number of losing trades/bets in a row.

Even if you have a 75% odds of winning at roulette or in options trading on every turn, it is still possible to miss your bet enough times in a row as to eliminate your reserves.

When your reserves are out, you are out.

When your reserves are up, you will keep playing until you are out. The only thing that will stop you is closing the table (expiry of your options), death, or being banned. If the casino could be sure of this behavior in every gambler, they would be happy to give up their tiny edge.

[ArtM]

Originally Posted by Certeza

Anyone thinking about trying this, lookup "gamblers fallacy". Waiting for a string of reds has absolutely zero effect on the next spin. It DOES NOT increase the odd of success. The only thing it succeeds in is wasting time.

It also succeeds in slowing down the rate of loss!

[Sondor]

Anyone who argues against the fallacy of the Martingale system is missing a beat...

[ImaginaryNumber]

Originally Posted by Certeza

...Imagine I presented a weighted coin that would favor one side 55% to 45% instead of the usual 50/50. The payout is 1:1.

In the first case, imagine that I inform you up front that the coin is rigged, but I don't tell you which side it is rigged toward. You call "heads" on the first toss and win. Were you gambling? Yes, because regardless of the outcome, you had no idea if the coin was weighted in your favor or not. You don't have a positive statistical expectancy going into the bet.

Secondly, imagine that I told you it is weighted to favor "heads". The payout is still 1:1. You call "heads" and lose. Were you gambling? No, because even though on that particular toss you can't be certain of the outcome, over the course of 1,000 tosses you have a statistical expectancy of 10%. Over 1,000 tosses, you are going to make very close to $100. You don't need to be able to accurately predict every toss.

Third, imagine that the coin still favors heads, but the payout for a win is $1.25. If you call "heads" you're still not gambling right, because the coin favors heads? Wrong! Because of the payout change, calling the most likely outcome results in a negative expectancy of 1.25%. Meaning that over 1,000 tosses, you're going to lose $12.50. In this case, the non-gambling bet is for the less likely outcome...

I'm having trouble understanding example #3.

1000 tosses of a weighted coin. Expectation that 550 will be heads and 450 will be tails.

Credit of $1.25 for win, debit of $1.00 for loss.

Always call 'heads'

(550x$1.25) - (450x$1.00) = +$237.50

What am I missing?

(Just to keep this somewhat boating related, is this anything like the capsized monohull vs multihull debate? )

[Vino the Dog]

Thank you folks for explaining why stock market, futures, and all other names you call it, are without question, gambling... and nothing more.

Just like blackjack, craps, and poker, there are "systems", and for each system, proponents who can string a pseudo-logical sequence of statistics that prove the system player is not gambling.

This thread has been pretty much taken over by gamblers, and I wonder how many of them even have a boat, and of those who do, how many leave the dock for more than a couple weeks at a time?

I liked the thread better when there were cruising sailors thinking about how to make a few bucks to keep cruising, than now, when it seems like mostly fairly affluent business men hoping some day to strike it rich enough to buy a boat.