Simple Profitable Method - Take 2

[Allaces]

http://en.allexperts.com/q/Probability-Statistics-2077/Probabilities.htm


Expert: Ellis Godard
Date: 10/6/2004
Subject: Probabilities

Question
I want to know how i can work out probabilities for example, heads and tails a 50% chance of either, however once one head has come up how do you work out what the probabilities of getting another head (or tail) becomes. and if you have had 3 heads in a row how do you work out the probability of next head / next tail. i am sure that there is a mathematical formula for working this out but i haven't got a clue were to start, i hope you can help me, this problem is driving me nuts.

Thank you in anticipation

Steve


Answer
The chances of the outcome (heads or tails) remain 50% on each flip, regardless of what happened on earlier flips. Each outcome is (or should be, unless the coin is altered by or after each flip) independent of whatever happened earlier. Gamblers (esp slot machine players) dont seem to understand this, but it's "true"

 

[version77]

I think this thread has gotten off topic. But who cares...

 

[Allaces]

Quote from version77:

I think this thread has gotten off topic. But who cares...

SPM should never have taken 2 threads and 400+ pages.. I mean for fucks sake the very first word is SIMPLE

 

[GTS]

Quote from JSSPMK:
I think it's reasonable to say that any single coin toss carries a 50/50 chance

Yes

but due to overall statistics of 50/50 eventually you'd get tails

I don't think statistics is the correct word but I know what you mean - in any case each coin toss is separate event. The fact that you've gotten heads 100 times in a row does not change the chance that the next toss has a 50-50 chance of being heads or tails.

and because of that undisputed fact probability increases, it sure doesn't decrease.

No one said it decreases, it just doesn't increase - it stays the same each and every time. As you yourself said, any single coin toss carries a 50/50 chance - even after tossing a 100 heads or a 100 tails.

The fact that over a large enough sample set you would expect to see a 50/50 distribution of heads/tails does not change the probability of any given toss.

The flaw in your logic is that you seem to think the expected long-term heads/tails distribution influences an individual toss. In other words you think the tail wags the dog when it is the other way around.

 

[nove]

An important thing about analogies to trading that used coin tosses is that coin tosses are statistically independent events but trades are not.

The probability of the second rejection from resistance is different to the first. And the third is different to the second. And so on. Not so the 1st, 2nd and 3rd coin tosses.

 

[version77]

Near the end of the trading day on Monday I was reading this thread
about the coin tossing.

So... I pulled out a quarter to do some real time testing.

At first, it was heads, tails, heads, tails kind of thing.

Then I had my first 3 heads. A little while later, 3 tails in a row.

Then just a little later, 4 heads in a row. Little later 4 tails in a row.

Just a little later I had a 5 tails in a row. I stopped at that point.

The strings of heads and tails were getting bigger!

Seemed kind of odd to me.

I think if you toss enough coins, you will get a random outcome
over time when it comes to streaks. But if you throw enough, you
will get a balance of 50/50.

 

[JSSPMK]

Quote from Allaces:


Each outcome is independent of whatever happened earlier.

Theoretically, yes.

 

[Allaces]

Quote from JSSPMK:

Theoretically, yes.

Just accept it.. the mathematicians say you are wrong.. the statisticians say you are wrong.. the casino says you are wrong..

It's a fair bet you are wrong

 

[JimmyJam]

Quote from Allaces:

Just accept it.. the mathematicians say you are wrong.. the statisticians say you are wrong.. the casino says you are wrong..

It's a fair bet you are wrong

It's a great system, with a few additions, it's pretty much damn near bullet proof.

JJ

 

[JSSPMK]

Quote from Allaces:

Just accept it.. the mathematicians say you are wrong.. the statisticians say you are wrong.. the casino says you are wrong..

It's a fair bet you are wrong

But assuming 50/50 chance what is, in your opinion, the absolute highest consecutive amount of tails you may get? Would you say any amount is possible?

BTW casinos do employ a maximum bet in most games, do they not? And statistics favours both at 50/50, so it's an equal chance, my opinion is based on a practical inability for streaks to last, therefore probaility rises even though every next toss is an independant event.