John Grochowski writes about money management.

[Alan Mendelson]

Alan, the ER is established by the odds on EVERY hand you play. If you play multiple hands then the ER is the sum of the individual ERs divided by the number of hands. Simple math. If you are playing the same machine then, ER*n/n = ER. So, it turns out the ER also pertains to every hand you play. Darn that math.

This has nothing to do with winning and losing. It's simply a statement of statistical averages. However, ER and variance are the tools that allow you to compute probabilities for your chances of winning/losing. And, if you paid attention they is nothing in any of the computations that cares when the hands are played.

I'm scratching my head here... aren't we saying the same thing? The only other thing that I said is that the ER does not impact whether or not you will win or lose. And now you wrote "this has nothing to do with winning and losing." Well, that's right. So why so much criticism for those who play on negative expectation games? They can and do win, ya know.

[arcimede$]

I'm scratching my head here... aren't we saying the same thing? The only other thing that I said is that the ER does not impact whether or not you will win or lose. And now you wrote "this has nothing to do with winning and losing." Well, that's right. So why so much criticism for those who play on negative expectation games? They can and do win, ya know.

Why did you stop without getting into the probabilities? What you appear to be saying is similar to the old joke that your chances of winning the lottery are 50-50. Either you win or you don't. Of course, that is just a silly joke. No one has a 50% chance of winning the lottery.

The same logic applies here. You can win or lose and both are possible. However, that says nothing about your REAL chances of winning. This is where the ER and variance come into play. They can be used to compute your chances of winning any session and/or your chances of being ahead at any point in time in the future.

The results turn out of be more interesting because we can use that calculation to understand what approach will give us the best chance of winning in the future. Understand?