FXstreet

I lived in Las Vegas for 5 years and played blackjack almost every day. I didn’t play for fun. It was strictly business. I never gambled by playing roulette or craps or slot machines. Every hand I played was based on the mathematics of it.



My guide (to begin with) was a book called Playing Blackjack As A Business which detailed card counting and a computer-tested basic strategy. It’s somewhat out-of-date these days. Better guides can be found now. But that’s what I started with.



I learned to take risks based on assessing probability correctly. Here are my thoughts:

1. When the probabilities are favorable and you’re sure of it, get the big bets out. Be fearless about it.

Do not be afraid to establish big positions when it all adds up. When the fat pitch comes into the strike zone, you want to hit it full force. Hesitate and you miss. This applies for skilled players only. I’m talking about risks being taken by someone who’s studied, practiced and played for a hundred hours at least. You won’t really be confident about probabilities until you’ve been at it for awhile.

Once you’re there, though, you won’t have time to think about it too much. Suddenly the true count is up there and suddenly, the dealer has a 6 and you’ve got a pair of tens — this is the time for the big stack of chips. Under-betting in those conditions keeps you from growing. It may not work — sometimes it won’t work. Keep going. That’s why it’s called “risk.” You have to develop a sense of fearlessness at these tables.

2. If you think you’re being cheated, get up and leave the table. Never play if you have any doubts about game integrity.

You probably won’t get cheated. It’s illegal. Casinos don’t need to cheat you — the games heavily favor the house already. Every once in awhile, though, you might begin to feel as though something is not quite right.

I wrote about the possibility of such an incident in The Day I Started Winning At Blackjack where a dealer had dealt himself 5 straight blackjacks – statistically, a highly unlikely event. It could happen independent of dealer intervention, but I decided not to stick around. That’s the thing. If you feel as if strangeness is unfolding, you’re automatically in the wrong frame of mind to continue. Take risk off the table, literally. Go for a walk.

3. Long losing streaks are ordinary and do not mean you need to alter the process. Keep playing correctly.

This can be tough, psychologically. A streak where you just can’t seem to win is challenging, especially to your sense of confidence. It’s important to continue to play. That’s the only way to allow the math to work.

4. During a losing streak — or draw down — adjust position-sizing relative to bankroll aka assets under management.

This one’s hard sometimes. You started with $100,000 and you played perfect basic strategy and you counted cards correctly and, after a few hours of play, you’re down to $80,000. This sort of thing can happen. In fact, it does happen — regularly. At this point, you have to put out less money per bet until the process kicks in again.

Plenty of formulas exist for this — and you could look them up on the Internet — but it’s not that complicated. If your maximum bet has been $1000/hand, you need to cut back to about $800/hand. If you decide to begin betting more in order to catch up, you’re dead. You might get lucky, but that’s not what this is about. Staying disciplined is what brings you back, eventually.

5. Seek out only the most favorable conditions. If you can’t find them, don’t play.

You learn a lot by walking past a table and examining the situation. For example, if a little sign says “Blackjack pays 6:5,” you do not want to sit down here. That’s not really a game of 21. That’s a similar game designed by a corporate MBA who wants to put your money into the “current assets” portion of his balance sheet.

A hand of blackjack should pay 3:2 — that’s what it’s always paid since Benny Binion moved to Las Vegas from Texas. You can find most of the “conditions” information you need on various 21 websites including this one.

I make it a point not to sit down at tables where I’ll obviously be distracted. This means no beautiful, sexually appealing dealers. If she’s wearing a bikini, this is good sign that you should NOT be sitting down there. I like ordinary, everyday people dealing out the cards.

The same thing goes for the people sitting at the table: I will not sit at a table where cleavage or leg or skin in general is on display. Card counting requires a high degree of concentration. Distractions can make risk taking tough. I don’t watch CNBC either.

6. To take risks is to step outside of the comfortable and secure.

Rock climbing is not for everyone and yet skilled climbers do it all their lives without serious error. The key is study and practice. A lot of it. You want a guide or mentor, too — someone’s who’s been there a few times.

7. When taking risks, stay clean and sober. It only works if you’re sharp and present.

When counting cards and playing basic strategy, I never had a drink containing alcohol. Sometimes I ordered a cranberry juice to make it look as if I had a serious drink, but that was camouflage for the benefit of any pit boss scrutiny. I never played stoned either.

The concentration required to keep up with the true count is immense. Then, again for camouflage, you have to make it look like you’re not concentrating because that would be the sign of a card counter. It’s the type of concentration that doesn’t look like concentration.

Meditation is recommended for anyone taking risks with money– as anyone working for Ray Dalio could tell you.

More...