What is the Gambler’s fallacy in betting? How do I avoid it?
2 weeks ago Ambex 0
If you’ve been gambling or betting, then you might be aware of the term ‘Gambler’s Fallacy or the Monte Carlo Fallacy. What is it anyway? It is the belief that something is more likely or less likely to happen based on a series of previous events that, in themselves, were entirely random. The fallacy in this is the ability to spot a pattern in random events despite that being an oxymoron. Past occurrences are incapable of determining the probability of specific events occurring in the future.
There are various industries where this theory takes place that include gambling and investing. In the latter, it happens when investors sell their shares when the market is bullish with the assumption that the said trend is likely to change, despite having evidence that the same is true. Another example in betting is when a person using Bitcoin Dice betting platform and continues to play blackjack despite having a losing streak believing that, according to probability, the tide will change in their favor.
What a person needs to understand is that each event is independent of each other. An example is a coin toss. However many times a coin gets flipped and no matter the accumulative outcome of heads or tails, the chances of the coin landing on heads or tails is always 50/50. The fallacy is in believing that should there be more tails then it is likely that the next coin tosses will produce more tails than heads. The fundamental idea is this: you cannot predict the outcome of random events.
The reason for the name is because this phenomenon was observed on August 18, 1913, at the Le Grande Casino. The color black happened 29 times consecutively, and afterward, people began placing their bets on the 30th landing on red. As with the coin, the wheel had no memory. That was the trend after the 10th black came up; with every bet, people placed their money on red assuming that there was no chance that the color black would come up again. By the end of the night, Le Grande was extremely wealth with 10 million francs, leaving gamblers broke.
With that idea in mind then a person is betting, the assumption that one can predict the outcome of a bet should be given up altogether. The reasonable approach is to use betting systems that increase your chances of winning despite what the odds may be. Therefore, the way to avoid the Gambler’s fallacy when playing any betting game such as blackjack is to always go with the mathematical probability and not an unfounded bias of what the outcome should be. Machines and other lifeless objects have no emotions and are therefore not going to be dictated by emotions to do any differently.