So I don’t gamble, and don’t ever indend to make it a habit.
But a friend told me to play roulette, and I would have a ~47% chance of doubling my money and , as long as I had enough money to keep doubling my stake, would have a ~95% break even if I kept going until I won and never played again.
So say I had $200k in the bank and always put my money on red
Spin 1 : $5K
Spin 2: $10K
Spin 3: $20K
Spin 4: $40k
Spin 5: $80K
Spin 6: $160k
In this scenario, I’d have a ~47% chance of winning $5k, and just a 2% chance of losing $160k?
EDIT: Although just working this out, I think I would probably put the 160k into a 4% savings account if I had it, or start off way smaller amounts e.g. $500 to reduce my chane of losing money significantly lol.
In: 8
Let’s assume you can make all those bets. Let’s look at the expected value:
First off: with $200K, you can only make 5 bets: having already bet $155K at that point, you only have $45K.
Over 5 bets, you have a (53%)^(5) chance of losing everything: about a 4% chance of losing $155K – an expected loss of $6.4K. Over the same 5 bets, your ~96% chance of winning $5K is less than that – so, on average, you will lose.
And that’s the problem of the “Martingale System” – it stops working as soon as you run out of money. In theory, if you have an infinite amount of money and time, and no limits to how much you can bet, it works – but in practice, there is a negative expected value and you will run out of money eventually.
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