Im still not fully able to wrap my head around how probability works.
So for a dice site that has a house advantage you can calculate the theoretical profit. Thats because of probability laws.
Though in fact the reality shows that its going above or lower than that often enough. Thats normal.
In theory the two lines should develop somewhat similar.
Though mathematically after a big drop or a big rise the real profit line should start new from the point where it is. Meaning, it doesnt know its past. It should follow the theoretical profit line now again, only +- the level where it is now.
So in fact its somewhat of a chart where you know a bit where the price will develop to.
See first graph at:
https://sites.google.com/site/justdicestats/dynamicThough when i watch these graphs then i wonder why a crash and a rise is often following. Its a bit like the probability is trying to push it back on its way.
Back with JD i tried to game that. Divest when profit is higher than theoretical and invest when its lower. And it worked. But it shouldnt.
So whats the story behind this? Is probability pushing it back? In theory it should not care about it when its higher or lower.
Can someone explain so that i see it?
