The house edge is defined as the ratio of the average reduction to the first wager. The house edge isn’t the ratio of money lost to money wagered. In some games the beginning bet is not necessarily the end wager. For example in blackjack, let it ride, and Caribbean stud poker, the player might boost their bet once the odds favor doing so. In such situations the extra money wagered isn’t figured into the denominator for the purpose of determining the home advantage, thus raising the measure of risk.
The reason the house edge is comparative to the original wager, not the ordinary bet, is that it makes it easier for the player to estimate just how much they could lose. For instance if a player knows the house advantage in blackjack is 0.6percent he could assume that for every $10 wager first wager he makes he’ll shed 6 cents on the average. Most gamers are not likely to know how much their average wager will be in games such as blackjack relative to the original wager, hence any statistic based on the average wager would be hard to apply to real life questions.
The traditional definition can be helpful for players determine just how much it will cost them to perform, given the information they already understand. No matter how the statistic is quite biased as a measure of danger. In Caribbean stud poker, for example, the house advantage is 5.22%, that is close to that of double zero roulette at 5.26%. However the proportion of average money lost to ordinary cash wagered in Caribbean stud is simply 2.56%. The participant only looking at the house edge could possibly be indifferent between roulette and Caribbean stud poker, predicated only the house advantage. If one needs to compare 1 match against another I believe it is much better to look at the ratio of money lost to money wagered, which would reveal Caribbean stud poker for a much greater bet than roulette.
A number of different sources do not rely ties from the home edge calculation, especially for the Don’t Pass bet in craps and the banker and player bets in baccarat. The reason is that if a bet isn’t resolved then it needs to be ignored. Personally, I opt to incorporate ties although I admire another definition.
Element of Risk
For purposes of comparing a single match to another I would like to suggest another dimension of danger, which I call the”element of danger.” This measurement is described as the average reduction divided by total money bet. For bets in which the first bet is always the final bet there would be no difference between this statistic and the house edge. Bets in which there is a gap are given below.
The standard deviation is a measure of just how volatile the bankroll is playing a given game. This statistic is often used to calculate the probability that the final result of a session of a defined variety of bets are going to be within certain bounds.
The standard deviation of the last outcome over n stakes is that the product of the standard deviation for one wager (see table) and the square root of the amount of initial bets created from the session. This presumes that all bets made are of equal size. The probability that the session outcome will be within a standard deviation is 68.26%. The probability that the session result will be within two standard deviations will be 95.46 percent. The probability that the session result will probably be over three standard deviations will be 99.74 percent. The next table indicates the likelihood that a session outcome will come in various quantities of standard deviations.
I understand that this explanation might not make much sense to someone who is not well versed in the basics of data. If this is the case I would advise enriching yourself with a good introductory statistics publication.
Read more here: http://institutosantiago.cl/?p=7920