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On 2003-10-21 21:37, Fryingpan wrote:
You take the risk in order to make a profit.
* Criminals take the risk in order to make a profit.
* You buy an investment house to take a risk in order to make a profit.
Let's talk profit and then risk will come into the discussion.
I haven't heard risk yet.
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Risk is relative.
Would you risk 100% of your bank to make 1% profit?
The discussion has been criticized for tilting towards staking, yet surely the staking is key to both the profit and risk element.
In my opinion there are various criteria to be considered before manging risk and staking to arrive at a determined or undetermined profit.
a)Does your method show a level stakes profit and if so over how many bets?
b)Does all the profit come from one or two outsiders or is it consistant?
c)What is your average dividend?
d)What is your strike rate?
e)What is your current longest run of outs and what is the mathematical expectation for same?
From here you can calculate the level stakes risk.
Perhaps this is the time to mention measuring whether or not your method ,
should hold up in the future.
Obviously nobody can predict the future, but risk can be minimized by having the greatest amount of data available to arrive at a reasonable conclusion.
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* Short odds less risk versus long odds high risk.
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It depends entirely on how the selections are staked (oops that word again).
Short odds are not necessarily less risk, the expectation is that one would have a shorter run of outs and level staked less chance of ruin.
But do you have more or less of a chance of actually making a profit?
It again depends entirely on how we are defining risk (Risk of ruin or maximum drawdown or something else).
Level staked the risk of ruin is far less on the shorter the odds are.
But applying Target betting or even Kelly the risk of ruin is much higher than longshots because you are effectively chasing on short prices.
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* High strike rate less risk versus low strike rate high risk.
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SEE ABOVE
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* Calculated run of outs before loss of bank versus Stop strategies to loss of bank.
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One can calculate the maximum run of outs and calculate a stop loss procedure similar to Stockmarket strategies.
What to do then once you've reached your stop loss?
Start from square one and cop the loss or modify the method or staking again.
I do not hold too much with stop loss strategies in general because this game only enables a very small relative POT, and to regain losses either now or in the future involves delving into unchartered territory.
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* What are the 'what ifs' that are never considered that make up risk.
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What if my internet connection dies in the middle of placing a bet, something happens to distract you and you miss the one bet that would have made a profit for the month?
What if the power goes out, the ISP packs it in, you have to reboot (MacroHard), the family needs you attention for the day etc etc etc.
Over to someone else...