Arimathea Posted June 19, 2010 Share Posted June 19, 2010 Hi there, Is anyone able to tell me what the probability of losing half your bank or going bust is if you have a 5% edge? Thanks Quote Link to comment Share on other sites More sharing options...
nkdz Posted June 19, 2010 Share Posted June 19, 2010 Re: Chances of going bust? Hi there, Is anyone able to tell me what the probability of losing half your bank or going bust is if you have a 5% edge? Thanks You mean edge over bookies? Don't get it... Quote Link to comment Share on other sites More sharing options...
Arimathea Posted June 19, 2010 Author Share Posted June 19, 2010 Re: Chances of going bust? Yep 5% over the best odds available bookies/exchange... I'm assuming it is still possible to go bust or lose half your bank but interested to know how possible? Quote Link to comment Share on other sites More sharing options...
Cramer Posted June 19, 2010 Share Posted June 19, 2010 Re: Chances of going bust? Ridiculous question. Need to know so many more things like staking strategy, types of prices, number of bets etc etc. Quote Link to comment Share on other sites More sharing options...
Arimathea Posted June 19, 2010 Author Share Posted June 19, 2010 Re: Chances of going bust? I guess all those things would make a difference... the price would vary, usually 1.01 - 10 tho and 150 to 200 bets a month... staking is level stakes - 2% of start bank Quote Link to comment Share on other sites More sharing options...
DM99 Posted June 19, 2010 Share Posted June 19, 2010 Re: Chances of going bust? We need to know your average odds of your back bets. If the average odds are 1.01, you are understaking. If 10.0, you are overstaking. Quote Link to comment Share on other sites More sharing options...
Arimathea Posted June 19, 2010 Author Share Posted June 19, 2010 Re: Chances of going bust? Well at the mo the average is 2.2 so lets go for that. Certainly would expect it to be higher than this on avergae in the long term. Quote Link to comment Share on other sites More sharing options...
Machine Posted June 25, 2010 Share Posted June 25, 2010 Re: Chances of going bust? your chance of going bust (risk of ruin) is worked out with this formula Risk of ruin = ((1 - edge) / (1 + edge)) ^ bet units ie You have a 5% edge and you have a 100pt bank and risk 2% per bet = 100/2 = 50 bet units. Risk of ruin = ((1 - 0.05) / (1 + 0.05)) ^ 50 Risk of ruin = ((0.95) / (1.05)) ^ 50 Risk of ruin = 0.9048 ^ 50 Risk of ruin = 0.0067 or 0.67% So if you can constantly beat the market (bookie) by 5% your chance of going bust will be 0.67% As your betting bank increases this will gradually move towards zero if the same stake of 2% of starting bank is used. Quote Link to comment Share on other sites More sharing options...
Arimathea Posted June 26, 2010 Author Share Posted June 26, 2010 Re: Chances of going bust? Thanks for this, that's some very good Maths... :clap Quote Link to comment Share on other sites More sharing options...
xchangeDollarz Posted July 15, 2010 Share Posted July 15, 2010 Re: Chances of going bust? if you have a 5% edge share it with me :ok Quote Link to comment Share on other sites More sharing options...
slapdash Posted July 15, 2010 Share Posted July 15, 2010 Re: Chances of going bust? your chance of going bust (risk of ruin) is worked out with this formula Risk of ruin = ((1 - edge) / (1 + edge)) ^ bet units That's if all bets are at odds of 2.0. If you bet at higher odds, the risk of ruin will be larger. If you have a 5% edge with bets at odds of 2.2, your risk of ruin if you start with a bank of N bet units and bet at level stakes is about 0.9202^N, compared to about 0.9048^N if your bets are at odds of 2.0. If N=50, this gives about 1.56% at odds of 2.2, compared to 0.67% at odds of 2.0. If your bets are at varying odds, it will be more complicated. It won't depend only on the average odds. Also, these figures assume you know your edge. In practice, the risk that you've overestimated your edge could be your most dangerous risk. Quote Link to comment Share on other sites More sharing options...
Datapunter Posted July 15, 2010 Share Posted July 15, 2010 Re: Chances of going bust? Also, these figures assume you know your edge. In practice, the risk that you've overestimated your edge could be your most dangerous risk. Just adding to that the fact that your edge will change over time. The problem is if it drops you won't actually know it does until you see the effects. So the question, "can my edge disappear ?" , is a substantial contributor to the risk of going bust. Quote Link to comment Share on other sites More sharing options...
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