You want to see how I make $ 245 in under 5 minutes. This will take long and will probably change the way you make money for ever. This is not some get rich, quick scheme. This is what they want.
This is currently again at auction. I want to talk about before we get into the specifics throughout this course. In the section on entering trades, just talked about our kind of logic in and thought process of how we go about making trades and again just ten thousand foot view of what we’re trying to do. So it’s obviously a game of numbers and out and say I have often said that when it comes to options trading, we should run our business much like a casino does, and we all know the casinos make money.
They make money hand over fist, but it’s sometimes hard to step back and find out exactly where their edges. I mean. We know that you know casinos make money and they haven’t had, and they want us to play Rainbow. Let’S quantify that, what does that look like him and what are the mechanics and logistics behind that? Because there’s much more to it than just the percentage that they’re gon na win or lose on a given trade or or table game?
It comes down to sizing table and its number of times people play online pokies or roll the dice there’s a lot that goes into it and we should act much like a casino does, but we often do the complete opposite and you’ll see why. So how does a casino really make money again, what’s their age that they have over? How do we quantify that? So, let’s start with the relay and admittedly relied is one of the worst odds games. But it’s actually one of my favorite ones to play and go figure. But I like playing – and I don’t go there to make money.
But when I go I like to play online pokies, follow all the things with online pokies and the different players. I’d like to play online pokies on the different numbers and spaces when it comes to relax, and we know that came with the wheel that spins and the marble that falls most often people will bet on number, and it’s it’s pretty normal for some. Somebody go into a casino and just you know, put all the black whatever the cases, but here’s the exact way that it’s paid out. So you can see the Paris one to 10 mins. If you bet on online pokies a dollar bill, pay you a dollar. If you bet on online pokies a dollar and you lose, you lose a dollar.
That’S how the parent works. It’s pretty fair! As far as risk and reward you put up fifty dollars, you could make $ 50 or lose $ 50. But here’s where the casinos and comes into play and their student from one. So there’s the European probability which European roulette wheels only have 130, and so they do a little bit better source probability as Americans we get hammered and we have to double zeros on our roulette wheel.
And so that means our probability is even lower. But you can see that the probability of this happening either one of these red or black, is just about 48 47 percent. So, even though you’re making a dollar for every dollar you put at risk the likelihood of you keeping that is 47 %, which means that, because she knows edge is somewhere around two and a half to three percent. Ok, and so that’s how we can find out what the casinos edges, because every time that we make this trade theoretically we’re losing about two and a half to three percent. Now it’s not a lot right.
It’S not like the casino is robbing you of your money. Immediately, but over time you can see how this really gross and again you can see the number of times it can happen in the colors and everything the numbers that are covered in this. So, as we go down on the rule at odds, you can see again that probability, red or black. You know about 46 47 percent. Depending on how you calculated, you look at a number of occurrences that you can see that the odds of that happening, even with just even numbers, 121 payouts are pretty much the same right again.
The casinos not gonna recuse over the coals and take all your money at once. They want you to stay longer and they want you to play online pokies longer and then obviously, as you get further and further down the probability of hitting kind of anyone number on the roulette wheel decreases dramatically, but the payout is obviously a lot higher. So, instead of being 121 no payout, 35 21.
So if you put up $ 1 in money to bed – and you hit your gonna make about $ 35 for every dollar that you put up so big payout, but it’s kind of very small likelihood of actually happening now. Why table in its so you’ve often heard that when you go to a casino, have a little sign posted there? That says that this stabilize the table and a $ 50 $ 100 will having table and increases. The number of course plays that a person will make which does increases the house edge back to the casino.
So the longer you play the more you stand to lose and that’s period and his story there’s no debating so casinos deliberately want you to make lots of place and play a lot and they want you to do with the small amount of money. So I often say – and I’ve done a podcast always do that if you walked in and you told the casino manager hey, I wan na bet $ 1,000,000 on red right now, one bad one million dollars on red one roll one spin and that’s it and they Would absolutely hands-down say no way right, most 99 % absolutely no way because they are one-time probability of losing on that bad is about 47 %. They’Re gon na lose to you. So it’s too big of a bed in one fell swoop. What they would want to see if they want to see you spread that million dollars over thousands of different best, so they they limit the number of the amount of money that you can bet on any one role or anyone play because they know that the more You spend the more you roll, the more behind that you become so here’s a great ride. They’Re really shows that this is with roulette again the odds of going with a black or red or even and odd numbers.
So just one spin baby spin it one time and then goes around one time, you’re likely to be behind. On average about 51 percent now remember you’re getting paid fifty 50. If you went to your risk is almost exactly the same as your reward was over the course of a hundred spends the percentage they you get behind his about 64 %, so you still kind of in the game here. You’Ve been playing for a while, but now you’re starting to lose more and more of that edge to the casino and again over a thousand spend and then over 10,000 spoons.
You can see that on a given night over 10,000 spins, you have no chance of keeping any of the money that you say so, the longer you play them less consistent you become, in fact, consistency drops exponentially the longer they play, because that small house said that We looked at before two and a half to three percent. Slowly goes back to the casino and look. This is why they want us to play longer and longer. This is why they have great deals on casino trips and they offer you free rooms and free food, because the longer you play the more money that’s going to get sucked so, having all are having said all this as traders and, more importantly, as options traders need To follow the same logic with how we run our business and you have to think of it as a business to begin this isn’t a hobby. This isn’t something you do on the side. You have to run this thing later business, and that means that you have 21 make high probability trades when you go to a casino you’re, not making any high probability trades as well edge to the house in treating me know how to make high probability trades, and We can do that number two is: we’ve got to keep our position size, small we’ve got a set table limits for yourself right.
We can’t go in there like a house and say like a rodeo, cowboy, just slinging money around left and right. You got ta go in there and you got ta make small bets based on your positions. I got a great guy inside option in the guys and checklist section that helps you determine your positions based on bunch of different accounts and number three. We have to understand that consistency is what leads to profits so being able to make high probability trades with small positions over a long stretch of time right and going back to the online pokies example. They didn’t really have a hundred percent chance of success in winning until they had a ten thousand spends. That doesn’t mean we’ve got ta make 10,000 trees, but that does mean that one or even a hundred trades over the course of the year may not get us to that consistency level that we want.
But we’re assured that if we keep making high probability trades and keep setting table and its first cells that we will see success the longer and longer we stay and that’s why guys in this business you’ve been in it five years and 10 years become more and More successful they just made more treats and they stay consistent and persistent. It will lead to profits. So hopefully, this has been a really good tutorial, just to kind of again get you started before we get into a lot of the logistics of entering trades and how kind of managing this entry points.
Looking for trades, it’s important to take a step back and understand kind of the ten thousand foot view of what we’re trying to do here. So, as always, if you guys enjoyed this video, please share it online on Twitter on Facebook. Add a comment below this video and lessen page. If you have any questions or make sure I get back to all this and happy trading,