[Pokey]

This post is much more important than people seem to realize.

I'm sure most of us have heard of the "Gambler's Fallacy." It basically means that a little bit of statistics is a dangerous thing. People know that a "fair coin" will flip heads as often as tails. So when they watch a coin flip heads-heads-heads-heads-heads they KNOW that the coin is "overdue" for tails, and they begin to expect that tails will come more often for awhile to "catch up," because that's what coins do. As savvy gamblers we should know that coins, dice, and cards have no memory. They don't know that they've cheated you the last six times, and they don't feel that they owe you a win now. They ALSO don't know that they've let you suck out the last six times, so they're not going to punish you this time. Each coin flip is an independent event, and should be judged on its own merits, rather than on the past history.

Luckily, ordinary gamblers are NOT savvy about statistics. Case in point: several years ago, casinos began adding a counter to their roulette wheels that showed the last dozen or so spins of that particular wheel: what the number was and whether it was red or black. After putting in those counters, the casino profits from the roulette tables increased over 25% basically overnight, as people began betting on the roulette wheels that were "due" to hit a particular number or color.

Another point is that we, as human beings, have VERY little idea of what a "random" process actually looks like. We see streaks of 5 or 6 or 7 or 8 heads (or tails) in a row and immediately assume that something odd is happening:

- Raptor Christ hates me, because NOBODY could be this unlucky
- the casino is rigged, because I couldn't POSSIBLY lose this many coin flips in a row
- someone is cheating or has figured out the RNG for the casino, because they run MUCH hotter than is possible

etc.

Take a real look at the numbers Nielsio posted. Look at those streaks! Nobody would consider that truly random, but that's what random REALLY looks like. I remember hearing about a statistics professor that used to do an experiment in class: he'd select two teams of students. One would take an actual coin and flip it 100 times, writing the results in order on the board. The other team would invent their OWN series of 100 random-looking coinflip results on a different board. The professor would leave the room while they did their experiment, then would return to the room and tell them which list was which. He has never been wrong. When asked how he did it, he said it was quite easy: people making what they think are random lists actually put WAY too much volatility into it; rarely would a group of students have a streak more than four heads or tails long in their invented list. The coin, on the other hand, will USUALLY have a streak of seven or eight in a row at one point or another.

So, the lessons to be learned from this:


1. Cards have no memory.
2. Random doesn't mean what you think it means.
3. Just because you've won/lost the last xxx coin flips doesn't mean youre going to lose/win this one.
4. CARDS HAVE NO FREAKIN' MEMORY.
5. The long run is longer than you think.
6. Yes, it really is possible that you are running that hot/cold. No, you haven't necessarily discovered some secret coin-flipping theory that's giving you an edge. Yes, starting from now you're most likely to have a break-even outcome on your break-even bets.