Winning and Losing Streaks…

Following the last posting about Probability and Price, it’s probably wise to consider winning and losing streaks.

Winning streaks are good, yet the caution is – every winning streak comes to an end. You see, it’s tempting to believe a winning streak will continue, and as a result of this belief the undisciplined punter will parlay larger amounts in an effort to win big.

I ran a test simulation several times to see if 1,000 bets over time would yield an encouraging winning, or discouraging losing streak.

Why does it matter?

Because, for one, I am certain that I love winning streaks more than losing ones. I am also certain there are professional punters out there who are not discouraged by long losing streaks so long as they know their system is statistically expected to return a profit over the long haul.

Three different sets of Prices and Strike Rates for each test follow:

Test Price, Strike Rate, Max. Win Streak, Max. Losing Streak

1. $4.00, 25%, 5, 35

2. $2.00, 50%, 11, 11

3. $1.33, 75%, 35, 5

Note: The price and S/R relate to a 0% Profit on turnover – a break-even situation. In a future posting I’ll explore what different prices do to POT.

If you love winning streaks then you’ll love the 75% strike rate test.

Does the 50% S/R and Max. Losing Streak of 11 sound right?

If you’ve ever observed a roulette session, or know of a roulette player, I’m sure they’ll tell you of even bigger win / losing streaks on the red / black or odd / even.

The perception of the ultimate outcome, in my opinion, rests with how great or devastating the game was – hence the biased view of the player.

When considering any strategy where chance is involved (and can be qualified, eg. 20% or 60%) it’s important to look also at the potential for winning and losing streaks, and especially your ability to withstand them.

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