Here is a graph generated by a slick little program I ran across on a site called ev++. They have a page with a number of tools including a variance simulator. This graph shows the frequency and size of downswings I can expect given my current win rate and sample size.
What it shows is that EVERYONE winning at the rate I am right now can expect to have a 180 big bet downswing at some point. At 4/8 that's around $1400, about half my bankroll. Isn't that amazing? So, basically it's inevitable that I will loose half my bank roll at some point in one sustained losing streak. Want to know something else?
About half the time I can expect a downswing twice as large!
Bottom line is it's about 50/50 that I'll go broke.
Here's something really scary:
I've got a 20% chance of a downswing as large as 700 big bets. 1 time in 5 I will just keep losing and losing, no matter how much money I put in, until I've lost $5700!
Depressing and fascinating at the same time!
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