Royal Panda roulette

Should you have a Stop Loss?

What is stop loss?

Stop loss is the absolute or relative (as percentage of some other parameter) limit you pose on your losses. After the specified amount of loss is reached you stop. The point of stop loss is to minimize your losses or (in special cases) to preserve your profits. There are various opinions about the use and value of the use of stop loss, ranging from that it is the secret to success to being totally useless. We present the main points of view so you can make up your mind.

use stop loss

Don’t use stop loss

Stop-loss is nonsense and shouldn’t be worked into a method/system.

Almost some sort of fallacy – If you’re in a relay race and you tell yourself that “if I get to 4th place in the race I’ll stop running” Then obviously you will never win that race. You theoretically could still have won – but you stopped running because some made up rule forced you to stop the race when you reached a certain place.

Investors may use it – because investing is not ‘random’. There is also not a house edge with investing – you don’t start in some uphill battle for profit. Anyway – laughs. No one wants to hear that.

It sounds better to call it some safety net that protects your bankroll – because that’s appealing
to someone who doesn’t want to lose what they have.

When you’re losing and hit that imaginary point and get up from the table – the next spin your “bet” would have won and put you into profit again… think to yourself how that ‘stop loss’ exit point helped. At least you’ll have something in your pocket ? That’s not how winners think.

To pick some predetermined point to stop and then starting again some other day does absolutely nothing to change the outcome, it just delays it – which might ‘seem’ like winning?

Advantage Play

Reasons for the stop loss in games where the player may have the advantage:

  1. The player perceives a change in the playing conditions that may effect his ability to win.
  2. The X factor, a change that may have an effect but that’s currently unknown. Stopping enables the player to step back, and track in order to see if the current draw down is the result of a physical change or possibly just variance.

In the random game where the player doesn’t have the edge:

  1. The stop loss has no value because there is no “right time to quit”
  2. Nothing happens in between sessions that will enable the player to magically return and win.
  3. It’s not possible to side step variance by watching on the sidelines.
  4. Money management/ stop losses don’t have an effect on the house edge.

Bankroll Stop loss

There are two types of bankroll related stop-loss:

  1. one that follows a trend in the “market”
  2. one that follows a trend in your “equity” (bankroll)

Long story short, for “stop loss” to make sense, you have to come up with trend following scenarios for roulette, or what might be called variance following scenarios. Either your opinion about direction has to change, or the size of your bet has to change in order for there to be a “stop loss”.

In flat-betting, you can only stop betting and observe what happens when you are stopped. Ideally then, changing conditions (triggers) might call for you to start flat-betting again. The main thing here is the size of your base-unit relative to your bankroll. You would be STOPPED if your base-unit size was too large to begin with. Otherwise, you would not really stop.

Determining a base-unit size depends on looking at a lot of data, and again, only makes sense if you somehow stand a chance over the long haul, somehow defying the house edge.

Again, determining stop loss limits depends on looking at a lot of data given a positive outcome scenario. I doubt the size of a stop loss could be the difference between winning and losing (a lot of data could determine that), but could well increase performance if you have a winning way of following trends (which may also include a winning way of leveraging or avoiding “chop”).

Experience

Out of experience and practice comes this: talking about average events (most frequent events that happen) before comes a certain loss there is a chance of recovering it during a session. After this limit is over, and you get loss again there is most likely no chance to recover it, you will go down deeper and deeper almost for sure. You have to figure it out with practice and experience, you have to get feeling of it to know. It takes time and patience. And you don’t always have to play real money.

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