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Old 10-21-2003, 01:48 AM
Angel Angel is offline
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Join Date: Aug 2003
Posts: 25
Default Standard deviations

I am trying to better understand standard deviation. In particular, what it can mean to me besides a troublesome exercise. I understand most people don't work it out - I also understand it can be helpful to do so - I would prefer to be one of the ones then who work it out. I've picked a recent period of time to work with (52 hrs) and while I don't believe that it is a significant number and realize I'll need more hrs to give me meaningful data - 52 session hours ago marked a period of game change for me and the mixing the results of previous hours would not be helpful. So, despite these numbers giving a relatively valueless result, I would like to practice on these because these are the numbers I'll be adding to as time goes on.
I've calculated my hourly SD at $213. I've calculated my hourly rate at this point to be $126.9. There are 13 sessions in question. These numbers don't compute. If my average win is calculated as 52*$126.9/sqrt52*213 =6599/1536 or 4.3 SD then I am looking at $915 average win for 13 sessions. This is clearly not the case, though I can't find my error. Is it simply that my true standard deviation is not $213 as I thought? Was this mathematical sloppiness on my part or am I misunderstanding something conceptually?

I've seen in another post where BruceZ has said, "When your average win becomes exactly equal to your standard deviation, you will be ahead more than 84% of the time." I'm embarressed to say I couldn't make heads or tails out of this. Is 84% a probability constant? How about 68%? I've also read, "When your average win becomes exactly equal to your standard deviation..." This sounds like a given. Must this occur?

Any light you could shed on these questions would be appreciated. Thank you.
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