Ok Duritz....

I have whipped up a quick application and run some numbers....

I have done 5,000 separate tests of a run of 2,000 bets. I didn't bother going out to 1,000,000 bets unlike others, as I don't expect to ever have 1,000,000 bets for any one of my strategies.... I can fully expect to have 2,000 bets though, so it's a little more realistic.

I calculated Longest Run of Outs and Maximum drawdown based upon the original 22% Strike Rate and $4.80 dividend. I then averaged these over the 5,000 separate tests. For the "average" I used the arithmetic mean. The simulation isn't ideal as we don't have a spread of dividends, but it's probably close enough.

The average Longest Run of Outs for 2000 bets was 26.47.
The average Maximum Drawdown for 2000 bets was 73.20 units.

The ratio of Maximum Drawdown to LRO averaged out to 2.77. Therefore, Bhagwan's ratio of 3.5 is not too far from the mark. If you expect to have a LRO of 30, then you should expect your MaxDD to be around 100.

What does this mean for staking????? Simply calculate your MaxDD and then structure your betting bank to withstand that drawdown. For a 100 unit MaxDD, then you should only be betting 1% of your bank if you decide to bet flat stakes.

Following on from your most recent post, if your plan is to accumulate a bank, then I would recommend that you bet 1% of your bank non-reducing. This means that as your bank increases you increase your bets, but when it decreases you do NOT decrease your bet. I have been using this method of staking for quite a long period of time now, and it has stood me in good stead.

Cheers,
Chris.

__________________
Permanence is an illusion