While I am on the Betting Theory topic, let me share with you YOLO and lotto ticket parlay bettors why you are losing EV doing this. Not only those massive parlays, but any parlays going over +200 IMO are not optimal mathematically.
Variance is the devil. VARIANCE IS THE DEVIL!! Chant it with me my friends, until it is deeply embedded in your subconsiousness. Please allow me to illustrate you a simple example.
You have 100 dollars to invest for 10 years.
Option 1 is to gain 15% the first year, 5% the second, 15% the third, 5% the fourth, etc etc.
Option 2 is to get consistent 10% every year.
Which do you choose? Think bout it for a second.
Most people will think "well they are basically the same so its a matter of personal preference".
WRONG.
Option 2 is better. Why? BECAUSE VARIANCE IS THE DEVIL.
Lets do some back of the envelope math.
Option 1 is 100 x 1.05 x 1.15 x 1.05 x 1.15 etc etc.
Or, 100 x (1.05)^5 x (1.15)^5 = $256.71
Option 2 is 100 x (1.1)^10 = $259.37
Calculating simple interest the two are equal. But when compounding comes into effect, less variance is superior. And compounding definitely comes into play when betting because we are increasing and decreasing our unit amounts depending on our results.
Big odds parlays = variance = devil.
#QED