In blackjack you can actually have an advantage as the player by using counting cards and employing high-low strategies.

Famous mathematician Edward Thorp was the first to devise this strategy for gaining a statistical edge in blackjack. Thorp later rose to fame as a legendary fund manager who closed his fund after compounding returns of over 20 percent for more than ten years.

What led Thorp to believe that, after defeating the casino at blackjack, he may also outperform the market? Most probably because he saw that there are many parallels between the market and the game of blackjack.

There are three lessons to take away from Edward Thorp’s victory over the casino at blackjack that also apply to the stock market.

• Establish your edge. What determines your chances of winning in the long run?
• The mere fact that your return is higher than the market’s does not prove that you have outperformed it. 
  One is founded on chance, but the other is founded on an advantage.
• Money is important. In order to succeed over the long run, your financial situation is crucial.

You give yourself a chance to outperform the market if you pay attention to these three principles. If this essay piqued your interest, you should also read Edward Thorp’s book “A Man for All Markets.”

1. Establish your Edge

One of the most perplexing ideas in the world of investing is edge. Let’s begin by considering this from the angle of probability.

Edge in probability refers to any situation in which the long-term expected value is positive. For instance, the green bet in roulette is what gives the casino the advantage over time. The casino would not have an advantage in the game of roulette if the green bet wasn’t there and the only options were black and red.

Edge is a statistical advantage that, over the long term, produces abnormally high returns.

The fact that the casino draws last gives it an advantage in blackjack. Before the casino plays, you’ll probably bust yourself. However, if you use the high-low method of card counting and adjust your stake size in accordance with the count, this advantage will vanish.

If you’re interested, you can look up blackjack card counting on YouTube and find plenty of videos that explain it. The casino’s edge can be reduced and you can gain an advantage over time by using card counting and adjusting wager sizes. The same principles apply to both trading and investing in the market. Your competitive edge needs to be clear and understandable. Do you possess a knowledge advantage? Do you have a statistical advantage when employing your own model? 

2. Beating the market and outperforming the market in terms of return are not the same.

Many people spend their weekends or travel to Vegas to gamble and win a few hundred dollars. Do they now play cards professionally? Unlikely because they ultimately won due to randomness. Due to volatility, you can occasionally win in a game where you have no advantage.

Does it suggest that the head has an advantage over the tail if you toss a coin and receive seven heads?  No, it was just chance. Blackjack is the same. In the short term, you might succeed, but it is solely due to chance.

The market is the same. Although your returns were higher than the market for a few years, that does not always mean you outperformed it. Where did you get your excess return? Possibly as a result of leverage – if so, you were simply increasing your risk with no edge.

Only when you have a clearly defined edge can you assert that you have outperformed the market.

3. Your financial situation

In blackjack, your financial situation plays a significant role. Despite having an edge, you could lose early if you lack the necessary funds. That is if you keep getting bad cards and run out of money before the card count is in your favor and you start upping your stake size.

Many traders also disregard this variance principle. Despite having a successful strategy and the correct attitude, you could nevertheless lose for a period of time as a result of variances in your performance.

Do you have enough cash to get through these droughts? For long-term success in blackjack and the stock market; you must have adequate cash.

The post What Do Blackjack and the Stock Market Have in Common? appeared first on greedyhog-blackjack.com.

Buster Blackjack

In Buster Blackjack, players have the chance to make a side wager and win if the dealer loses money (goes bust). 

Although the standard blackjack rules still apply, this variation features a side bet that pays 2:1 if the dealer busts with three or more cards. The odds of winning are 4:1 if the dealer goes bust with more than four cards. If the player gets blackjack and the dealer busts with eight or more cards, the player has a chance to win a significant payment of 2,000:1.

Cashback Blackjack

This is an innovative variation of the game that combines blackjack with the popular TV game show Deal or No Deal. The ability to place bonus bets distinguishes regular blackjack from the standard game. If the first three cards dealt in the game result in a ranking poker hand, such as three of a kind, players can bet on 21+3 and cash in. Additionally, there is a pair bet that pays up to 25:1 if you are given two identical cards. The main novelty is the possibility for players to choose the cashback button after receiving their cards. This will result in a cashback incentive.

Live Majority Rules Speed Blackjack

In another example of one of the variations of blackjack, players pool their chips and vote by a majority whether to hit, stand, or double. Players can wager on one or two hands, and when it’s time to choose, they just make their selection. Then they just wait to see what the majority of other players have determined to be the best move is.

Quantum Live Blackjack

While Live Quantum Blackjack adheres to the standard blackjack rules, the game also features multiplier cards as an unique feature. On the upper right of the screen, one to three multiplier cards are displayed prior to the start of each round. Your wins may be multiplied by 3, 5, or 10 times with the multiplier cards. Earnings are multiplied by the stated amount if the hand you are dealt includes the same card as a multiplier card. Your prize will be boosted by multiplying both multiplier cards, for instance, 3X10, if your winning hand matches more than one multiplier card. Payment will increase by 1,000X if you have a winning hand that matches all three multiplier cards.

Now that you know how some of the newest blackjack variations operate, you should be able to choose which one is best for you. As more are developed in the fiercely competitive online casino market, new blackjack innovations keep popping up. You can be sure, though, that the usual goal of reaching as close to 21 as you can without going bankrupt will always be the game’s major focus.

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