The perfect strategy

If you wanted to just read what I think the perfect strategy is for something like trading or poker just skip to the second to last paragraph! I find the term strategy cropping up too often and used falsely and I actually dislike the word more and more these days. If I go back to when I played Warcraft 3 on PC, I was pretty decent at this game but not until my mind was opened by a friend of mine. We ended up making a team together, I was fast on the keyboard and had been playing a while and he was a top half life player who was a great thinker. He showed me that the best strategy is the most flexible strategy, one that is ready to counter whatever your opponent does. Now I always make sure I try to adapt to the situation in everything I try to master now.

I can understand that in trading a strategy can be your niche something that you focus on to obtain an edge but there is so much talk on the internet about strategies, sure some of these are just written by people who are trying to scam you out of some money because they know to well their best strategy doesn't work but people are still too focussed on a set of rules to obtain a profit. This is crazy, it is interesting to me to understand what these strategies are and why some people are fooling for them. I have had some really smart people talk to me about strategies they have discovered for house casino games and I have had to explain why they are not profitable. Roulette is one game which is just definately not beatable, not unless you change something, i.e the spin of the wheel. The most commonly spoken about strategy appears to me to be the martingale strategy, although it's not really a strategy and more of a system. This system is simply where each time you lose you double your bets, therefore it is sold to people that you will have to eventually hit, how could you keep missing? and when you do your bet would have been bigger enough to pay off all your previous losses and still give you a profit. This is all true but unfortunately it just doesn't work, for one there are normally limits on the maximum bet you can make and I believe they are placed in relation to the smallest bet, which helps ensure the casino's make a steady profit perhaps, just a guess. Normally you can double your bet 15 times or so before you reach your maximum bet so it's very likely you will make small wins all night. Unfortunately for anyone trying this strategy there is a very small chance of losing a lot of money and this happens when you run out of room to double your bet, due to lack of money or hitting the maximum bet etc. When this happens your losses will cover all your potential wins that would happen on average before you reached this point this is because each bet is slightly in favour of the house. In theory without a maximum bet you could make this system work but you would also need an unlimited budget and unlimited time because there is always a chance you will just carry on losing repeatedly until you bust whether it be £1 million or £1 billion, when this happens it will always cover any previous wins mathematically speaking. If you managed to set up a betting structure using the martingale system so that you would only lose 1 in a million times using this system, that one time would be a huge loss (especially as the bets increase rapidly) and any chance however low is possible.

I noticed intrestingly that the complete opposite of the martingale system would be a system that gives lots of small losses and 1 or a few really big wins, i.e the lottery. It seems gambling systems that are at the extreme ends appeal to humans quite a bit. I believe it's not so appealing to bet a medium amount and win back a slightly less amount most the time, it's much more appealing to make small wins regularly and try avoid that big loss or repeatedly make small losses with a chance of being very rich. Therefore these systems are quite a good way of hiding the truth that you will lose to some people and for others that know they will lose, it hides just how bad the odds are.

Going back to strategies rather than just systems, there are real strategies to counter something or to exploit a situation for example in zero sum games, strategy games etc. The important thing is these strategies can be countered themselves or they only work in certain environments. It's not to say that they aren't affective it's just that why would you want to work towards implementing a strategy that doesn't utilize all necessary information. If it does then to me it's more a skill than a strategy, for example in trading, some strategies are effective in markets that trade between a range and our range bound. I think the perfect strategy is more of a combination of your ability to master a skill and allows you to constantly change how you utilize your ability to understand information. It may incorporate strategies but I read and hear a lot of talk on people wanting to hear strategies that work, asking do any work. What there looking for is a strategy that can be passed on to someone who hasn't mastered the needed skill, and what that is, is just a strategy that works only in a certain environment, which is not ideal. Therefore the perfect strategy would have to move in real time and be constantly changing and would just be impossible to be perfect. This is why I don't really like the word strategy, I just like to say becoming better at using information and understanding. In poker, players try to plug their leaks but a player playing sub-optimum can create an opportunity to create an edge something that wouldn't have existed had they played 'flawlessly'. It can be the case that you play sub-optimally to exploit a weakness it doesn't really matter that it will not work every time or against everyone, if people aren't going to exploit you who cares. It is really about capitalizing as much as you can on each situation. Ideal 'strategies' change just as situations change and windows of opportunity do not stay around forever. This took me a while to really understand through my own experience. A few years back in poker, you could have made easy money by understanding that people call re raises out of position often but will fold when they miss the flop. This is because when you bet on the flop you show a lot of strength and players were playing their cards rather than the situation. If you played your cards you would be folding about two-third's of the time as you generally hit the flop one-third of the time. Nowadays players will play back before the flop and rarely call when they lack both positional advantage (last or late to act in the hand) and card advantage (not so great cards). This strategy of re raising and betting almost every flop was a strategy and one that could infact be passed on although you would have to at least mastered basic abc poker so that you were not terrible elsewhere in the game. The fact is this strategy had huge flaws but was highly profitable at the time, these easy opportunities decrease as players play better and information is more readily distributed, but sometimes you just have to work harder for your money and learn to master the trade.

Also it may seem obvious but always keen an open mind and try and think why the strategy could exist and why someone is revealing it to you! and if you want to know one great way to double your chance of winning the lottery, I'll give you this one for free buy a second ticket :D