Risk averse strategies.

[Brick]

Hello gang, looks like a good BJ website for card counters. Let me introduce myself. I've been working the casinos(as a card countersince 1992 and have become successful at beating them. It actually took me 3 years(1992-95)of exculsive card counting at casinos to build up the confidence and assurance I needed before being convinced that I can indeed beat the casinos at their own game. My overall lifetime edge is very small,slightly less than 1%, but I still prevail to this day.

I've recently taken an interest in possibly using risk averse strategies. There seems to be little and conflicting information as well as differences in opinions from the past and present that makes one wonder if RA has anything significant to offer or worth using. I'm getting the vibe that RA does not seem to be a very popular or common strategy.

I have a few questions:

Does anyone here use risk averse and have you noticed better results?

How many RA indices do you use and what are the index numbers?

Is the ev of risk averse more significant when a lower bet spread with higher valued units are being used?

If no one here uses RA but still has an understanding of it's theory and applications,can you explain why you choose not to use RA?

I'll be hanging around for a while feel free to ask me any questions and I'll try to be helpful.

Thanks,
Brick

 

[Rob McGarvey]

Risk Aversion is Reward Aversion

Hey Brick

Risk aversion is also reward aversion when you are playing onland BJ.

"I have a few questions:

"Does anyone here use risk averse and have you noticed better results?

Yes, I do use them when I am playing online.

"How many RA indices do you use and what are the index numbers?

See below......

"Is the ev of risk averse more significant when a lower bet spread with higher valued units are being used?

Don't follow you here....

"If no one here uses RA but still has an understanding of it's theory and applications,can you explain why you choose not to use RA?

I would say again because it effects your overall reward. Here is a little something I wrote in a recent newsletter of mine. I hope you enjoy it. This is how I see RA......roll'em!

Semi Risk Aversive Basic Strategy

Aversion is defined as "the avoidance of a thing, situation, or behaviour because it has been associated with an unpleasant or painful stimulus." Risk aversion is simply the avoidance of risk. Why would a blackjack player who is constantly risking money be interested in avoiding risk? That would be similar to a person who is afraid of heights becoming a skydiver. Risk aversion in this case is the avoidance of adding extra risk to a hand that will not produce a substantial gain in reward for doing so. Would a skydiver pay an extra 100% to drop from 4050' instead of from 4000'? I don't think so. Increasing your bet by 100% for a small extra edge will pay off over the next 1,000,000 hands, but over the course of a few hundred hands will have little to no effect. Since the majority of our advantage comes from the deposit bonus, not from the perfect play of each and every hand, we can avoid risk at certain times and still come out way ahead.

Which hands add risk to the game of blackjack? We have to place our bet to get our two cards. We always hope that we will get a blackjack, or a pair of ten value cards, or possibly a hand of 18 or 19, and the dealer will show a 5 or 6 as an up card. The extra risk that Basic Strategy will call for is found in the doubling and splitting of hands. Double 11 vs 2-10. Double 10 vs 2-9. Double 9 vs 3-6. Always split 8,8 and A,A. Split 9,9 vs 2-9 but not against a 7. All of these hands call for you to double your bet to get an extra edge. Risk Aversive Basic Strategy asks the question "is the risk worth the extra reward?" And the answer is? Maybe. Let's look at a few examples.

At casino A we buy in for $20 and get a $20 bonus. At casino B we bought in for $20 and were given a $50 bonus. We play each casino and end up losing $20 at both sites. We now have $20 at casino A and $50 at casino B. We are more likely to avoid risk with the $20 left at casino A than we would be at casino B. Quite often when we don't double a hand we will get another chance to pull a card and will often win that hand, although only winning the beginning bet, not the doubled one. The individual casino bankroll can have an effect on your risk aversion.

We are working over a casino that gave us a generous 200% bonus. We have $100 of our own money invested, a $200 bonus, we have won another $100, and carry a casino bankroll of $400. We have been using a progression and we have a whopping $40 bet on the line. 10% of our bankroll. We end up getting 6,4 vs a dealer 9 up. Basic Strategy says we have a 1.6% edge if we double. If we hit we have a 1.14% edge. The difference of adding $40 to your hand for an extra .46% is the difference between Basic Strategy and Risk Aversive Basic Strategy. Are you willing to risk $40, 20% of your casino bankroll, for an extra 20 cents? You are already working with a 5% edge over the casino due to the bonus and play requirements. It's your call.

There are two main forms of Risk Aversive Basic Strategy.

Full Risk Aversive Basic Strategy
FRA-BS is very easy to define. No doubling or splitting of any hand. Ever.

Semi Risk Aversive Basic Strategy
SRA-BS is a little bit more complex. Doubling and splitting of hands is determined by the amount of edge that particular play will add to your advantage. SRA6-BS gives you the plays that come in at over 6% player advantage. I will include the SRA-BS plays all the way down to the 2% advantage level.

SRA6-BS
A,A 5-6
11 5-6

SRA5-BS
A,A 3-6
11 5-6
10 5-6

SRA4-BS
A,A 2-7
9,9 6
8,8 6
11 2-7
10 3-7

SRA3-BS
A,A 2-8
9,9 4-6
8,8 5-7
11 2-8
10 2-7
9 6
A,7 5-6

SRA2-BS
A,A 2-9
9,9 3-8x7
8,8 4-7
7,7 6
3,3 6
11 2-9
10 2-8
9 5-6
A,7 4-6
A,6 6

 

[CanKen]

I'm not sure whether the term "risk-averse strategy" includes more than the use of risk-averse indices, but as far as I know, the best explanation and evaluation of R-A indices can be found in Schlesinger's BJA2ed., Ch. 12, PartII.
He concludes that R-A indices will increase SCORE values by reducing risk more than enough to offset the reduction in EV. The improvement isn't a lot, but it's an easy change to make, and it can't hurt.
He lists the seven most useful R-A indices on P.317. Personally, I use those except that, in effect, I never double 10 vs 10 because the R-A index is so high. And, for various reasons, including the high indices, I never split tens anyway.
There's a new BJA3ed. due out in March; maybe it will have more on this topic .

CK

 

[Automatic Monkey]

I also don't fully understand "risk averse" strategies. The non-risk averse indices are simply the ones that will produce the maximum profit over time, regardless of bankroll. The risk averse ones, as I am reckoning, 1) eliminate throwing extra money in the pot with doubles and splits when your stake is high due to your spread and the increased profit is minimal and 2) place a little more value on pushes when the dealer has a decent card showing (from the dealer's perspective). I can understand why someone with a limited bankroll would find this appealing. But in the end, one play provides the maximum profit, and all the rest do not.

It's a tough call. Losing EV is losing EV, no matter how you slice it. But on the other hand, losing bankroll means lowering your stake, and lowering your stake means lowering your absolute EV. So this is my compromise: if you play for a living and losing bankroll is the equivalent of losing your job, reduce your risk. But if you are a guy like me who is only one real-world paycheck away from getting a new bankroll, play for maximum EV.

 

[CanKen]

There is also good information to be found at "sba21.com".
It says in there somewhere too that BJA3 will have more on RA indices.

CK

 

[Brick]

Risk averse is actually suppose to increase EV not reduce it. The theory behind this is that by not risking additional bets on doubling or splitting where the gain is very small,it allows you to bet more at other opportunities and the risk of ruin still remains the same.

I'm interested in EV gain,but not sure of calculating how much more money I can put into action when using RA. This is what I'm concerned about,the correct betting strategies while maintaining the same risk of ruin.

Thanks to everyone for the information.

Brick

 

[Brick]

Re: Risk Aversion is Reward Aversion

Good post Rob. I play blackjack exclusively at brick casinos and under totally different conditions as you do. Of course it would be nice if everytime I walked in a casino and bought in for $1000, they gave me an additional $2000 in chips, but this is not the case. If it was I'd be a millionaireIf I had an edge as huge as you do, using RA would seem to be insignificant and not necessary. However since you're in the risky world of internet gambling,you made a wise choice using risk averse.

Good luck,
Brick

 

[Rob McGarvey]

U R

most welcome. RA is a field that needs more study. And you are right, with my edge, I can fan my nose and still come out ahead. ;> My RA is coupled with my progression McGarvey's Grind, (I know, no progression crap here, tho it does have merit under the circumstances in which I use it, for cover, and against a finite series of events for the mathematically inclined, with a limited bankroll and unlimited possiblity of gain) so it's like putting a rubber on a smart bomb and firing it at point blank range at my favorite online palace of chance.