I’m just getting back from my wonderful holiday..
you guys should try to go to madagascar and mauritius, those were my un-scheduled-extended trips.. amazing!!
So now, we are going to talk about risk management.. and here is my rules of risk managing:
Divide your capital into 20 and that’s equaly 5% for sure and you have to stick it only 5% risk of initial capital per shoe however it will be.
Assume (on average) sum of three streak is 9 per shoe, so 9/72 = 12,5%. That’s what you will lose for every shoe (on average).
Here we have 100% – 12,5% = 87,5% of winning rate
On every 5% of risk, you are expecting to have 1% of profit. But yet you have winning rate 87,5% : 12,5% isn’t it?
so that would be (87,5% * 1 %) – (12,5% * 5%) = 0,025 % * Capital
In the long run, should you have 0,025% of profit per shoe
For example :
Initial capital : 20.000 usd
Risk per shoe : 5% * 20.000usd = 1000 usd
Expected Winning per shoe : 1% * 20.000 = 200 usd
Your losing expected per shoe = 5% * 20.000 usd * 12,5% = 125 usd
Your winning expected per shoe = 1% * 20.000 usd * 87,5% = 175 usd
Therefore your 175 usd – 125 usd = 50 usd profit expected on average
When you are in
average bad luck you will lose = 125 usd
worse luck you will lose = 250 – 500 usd
worst luck you lose = 500 – 1000 usd
unbelievable worst luck, either a black cat running in front of you, or you are walking under a ladder, you will maximum lose = 1000 usd
average good luck, you’ll win = 175 usd
better luck, you’ll win = 500-1000 usd
best luck, you’ll win = 1000 – 2000 usd
Very amazing unbelievable best luck, in case a 20-something streak occurs, you can win = 3000 usd even more…!!
And why you should divide your balance into 20? It’s something back up for the worst case, let’s say if you play 10 shoes and you lose all the games worstly, those mean, in every shoe you lose 1000 usd. Then 10 shoes * 1000 usd = 10K usd. This is the signal you to stop gambling and even you’ll still have 50% of your initial capital.
Those called “don’t risk everything beyond you can’t afford to lose”
And if you follow all of my rules and you have a system like masterbaccarat which has 87,5% winning rate, are you still affraid to lose?