The Gambler's Fallacy that always gets you busted

[skywallkee]

Hello stakers, I'd like to tell you why whenever you do some maths and calculations and check out all the probabilities you always fail because something goes off of your table. Whenever you count that there can't be 5 loses in a row but then there are 8 and you get surprised as it can't be possible, it wasn't in your calculations and it's out of reality, have you ever asked why this thing happen? It's because of the gambler's fallacy.

What is gambler's fallacy or also named as Monte Carlo fallacy? It's the belief that if something happened before much more or less frequently than it is normal, then it will get to its normal state or change its state in the near future. When it comes to gambling, the most known example is Roullete. People think that if there were 9 reds in a row previously, then the chances of it being again red are very small and it should be black. This isn't the case at all. This isn't how probabilities are made. I will explain what do gamblers mix up and I hope you'll never do the same mistake as before.

How can you check the probability of it being red/black/green?

At stake, the roulette has 37 numbers (18 red, 18 black and 1 green). The chances of it being black/red/even/odd are 18/37 - 48.(648)%.

The chances of it being green are 1/37 - 2.(702)%.

How can you check the probability of it being red/black/green x times in a row?

To find out the chances of it being red/black/even/odd x times in a row, just do a simple math calculation: (probability/100)^x*100.

For example, if we want to see what are the chances of it being red 14 times in a row, we have to do: (48.648/100)^14*100 which is 0.004158243%.

The chances of it being green two times in a row are (2.702/100)^2*100 which is 0.07300804.

So it's less likely to be red/black/even/odd 14 times in a row than it is green 2 times in a row. But now that's where gambler's fallacy comes. If I hit red 13 times in a row, then I'd think that it is very less likely for it to be red again and the chances are 0.004158243%. False. The chances are 48.(648)% to be red again. Because roulette isn't dependent on the previous bet. If it hits red and it gets 14 times red in a row, it means that we went on the 14 red streak of 0.004% rate, and the chance of every bet was 48.6% to hit red. The more reds have come, the less lucky you were, but it doesn't mean that with every red that has come there are smaller chances to come again. 

I hope that I've been clear enough and you understood that the outcome of the current bet has the same chances as the previous ones, the only difference is that the chances of a big sequence to happen are different than the ones of a single bet.

Next time watch out and try not to mix these two. Being able to make a difference can bring you a big profit. Good luck and watch out!

[barbaris]

I like you so much you know interesting about gambling, I become your constant reader and learn constantly something new. Thank you for the interesting and useful information.

[wilberthh]

Interesting explanation, I always believed that if I hit more than 5 reds on roulette, then the next one must be black.. 

But then boom, 12 times red in a row. Again, nice explanation, at least I won't thinking the same way as before anymore.

[akki785]

few.. that's quite some information you shared here @skywallkee

Thanks for sharing..

[maverick528]

@skywallkee Im sorry to tell you this, but this is wrong.

The gamblers fallacy applies to real random events, like a perfectly random coin, or a perfectly random roulette wheel.

In real life nothing is perfect, so some people win, and this is impossible according to the gamblers fallacy.

"At the Ritz London casino in March 2004, two Serbs and a Hungarian used a laser scanner hidden inside a mobile phone linked to a computer to predict the sector of the wheel where the ball was most likely to drop. They netted £1.3m in two nights. They were arrested and kept on police bail for nine months, but eventually released and allowed to keep their winnings as they had not interfered with the casino equipment."

Now, speaking more specifically about Stake, the numbers used for generating the roll events in all games are NOT random, they are generated by a well-known computer algorithm, and only appear to be random, but they are really pseudo-random.

If you dont do a seed change, there actually is a certain relationship between a roll and the next one, but is sooooo complex that nobody can solve it, at least yet.

Because the core technology used is the SHA crypto hash function, which was created for doing very secure transactions, and the idea is that it is impossible or almost impossible to do several things, like being able to generate at will two strings that give as a result the same SHA hash, or being able to say the original (or originals) string(s) that generated a certain SHA hash, or being able to predict how a SHA hash will change if there is a very tiny change in the original generating string.