I have written a simple RiskSimulator for level stakes betting that I will be presenting in a future issue of Smart Sigger magazine. The application permits up to 100,000 bets to be simulated with graphical outputs. The user enters fair and bookmaker/exchange odds, a Monte Carlo simulation handles the rest.
When the simulation is complete the yield, risk of no profit and risk of ruin are output. Also, two charts are output; a time series progression for the bankroll and a histogram of variance.
Although using standard statistical methods such as binomial distribution will provide more accurate results the simulator provides a more easy to understand visual representation. Also, a binomial distribution is based on an infinite number of trials. As nobody bets an infinite number of times a Monte Carlo simulation can show the user the wide variation from what is expected with any betting system.
Future work will include a StakingSimulator for users to investigate the worth of various staking systems, including level stakes, proportional stakes, Kelly Criterion and guaranteed losers such as Martingale and Fibonacci.