roulette

The gambler's fallacy

By evannemo | crypto-general-posts | 18 Aug 2020


The Monte Carlo fallacy (or else the gambler's fallacy) is the wrong assumption humans make that a particular statistically-independent event is more likely to happen when in the past has not happened as frequently as expected. Understanding the nature of the fallacy can really help you stop gambling your money and start investing it!

To make the whole fallacy more clear, let's see an example. Joe flips a coin 20 times and the result is heads all of them. Now, Joe flips the coin again expecting that after this long streak of heads a tails should appear. But Joe is wrong. No matter of what the past events are, the probability of flipping a coin and getting heads or tails is always 50%-50%. Makes sense now, right?

So, if you (like many of us) have lost money on gambling your crypto online, it's time to stop. The fact that you lost the last 5 or 10 times, does not give you any better chance of winning next time. And considering the house edge casinos take, your money tends to grow less in the long run.

~ by Evan Nemo

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