Thread: Risk of ruin View Single Post
#3
12-25-2005, 09:29 PM
 BruceZ Senior Member Join Date: Sep 2002 Posts: 1,636
Re: Huh ?

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A 3BB/100 win rate with a SD of EIGHTY BIG BETS PER 100 HANDS ?To answer your question . . .

There is no realistic chance that a 3BB/100 winner could ever go through 2,500 big bets even with an SD this large.

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False. ROR = exp(-2*3*2500/80^2) =~ 9.6%.

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Your ROR with this WR and SD would be negligible with a stake of ONE thousand dollars

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False. ROR = exp(-2*3*500/80^2) = 62.6%.

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and bear in mind mutiplying your stake by 5 does not reduce your ROR by 80%; it reduces it by upwards of 99%.

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It raises it to the 5th power to (62.6%)^5 = 9.6%, which is a reduction of about 85% from 62.6%.

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If this is merely an academic question I'll let someone else explain the formula for calculating ROR.

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