Simply put, the Gambler’s Fallacy is the incorrect assumption made by gamblers that a random outcome that occurs a lot more often than anticipated over a certain amount of time will be less likely to appear again in the future.
However, and this may be fairly obvious to those with a decent knowledge of gambling, the laws of randomness simply don’t work that way, and there is no way to truly determine the outcome of something like a coin toss based on the number of heads or tails that have occurred just before.
Understanding the Fallacy
When it comes to understanding all there is to know about the Gambler’s Fallacy, it is important to start simply by getting to know what it is and the possible problems that it can cause.
Having a decent knowledge of this misleading theory will not only help those of you wanting to fulfil your dreams of being a successful gambler but will also prevent you from making the same small mistakes that many gamblers make before they find themselves with considerably empty wallets.
The Coin Toss Explanation
One of the easiest and most common ways to understand the Gambler’s Fallacy a little better is to consider a coin toss and the possible outcomes that come with it.
If we are talking about a normal coin being tossed, that has absolutely no way of manipulating any results, then the outcome of each toss will be entirely random and the result can be one of two things – heads or tails. Each result has an equal opportunity at winning, but this does not necessarily mean that each result will win an equal number of times.
Some believe that if heads comes up 10 times, then the next toss is likely to result in tails, and while this may seem believable to many, there will always be a 50/50 chance.
Probability is Key
It is a good idea for you to have a good understanding of how probability works if you want to truly be in the know when it comes to the Gambler’s Fallacy. In fact, it is a good idea if you so much as dabble in pretty much any form of gambling.
To put it as simply as possible, probability basically refers to just how likely something is to happen, which makes it a lot easier to see why you are more likely to see success in your gambling experiences if you have a good knowledge of it.
Thus, should you toss a coin up for a number of times, the expectation you would develop would be that the number of tails would be around the same as the number of heads tossed, but this is simply because the probability of 50% makes us think that the outcomes are shared 50/50.
One of the biggest reasons for gamblers all around the world turning to negative-progression betting systems that involve upping the stakes once a loss has taken place.
The most famous of these is the Martingale system, which ultimately works by putting even money down on red when playing at a roulette table, for example, and then doubling your stake each time one of your wagers loses. The idea here is that eventually the wagers you make will win and the losses that you made in the process will then be recovered.
Systems like this, however, are destined to fail and this is because of the fact that it is exceptionally hard for a player to predict whether they will experience the win they are waiting for before the stakes become too high.