The Perfect Bet

I have just finished reading The Perfect Bet by Adam Kucharski, a history of betting in the past, present and future. The book starts with the familiar early days of probability theory, driven by Blaise Pascal and Pierre de Fermat. The theory of probability owes much to the world of gambling. Next, the book shows how brute force methods have been used by syndicates to win lotteries and that not all scratchcards are equal.

After the Second World War Monte Carlo methods were developed as a way in which to model how neutrons would behave in a hydrogen bomb. Such methods were then used to simulate millions of games of blackjack in order to find the optimal winning strategy.

The financial world is now rife with "rocket scientists" using physics to crack open the markets. One such scientist is Doyne Farmer who intially applied his knowledge to creating an edge in the casino game of roulette. Farmer then went on to use his skills to set up a fund in the financial markets.

William Benter gets a mention for his modelling of Hong Kong horse racing and making millions of dollars from his betting. Dixon and Coles and their initial work on modelling soccer games is detailed.

For those interested in bot trading there is a lot to digest. Mostly financial trading and poker playing bots are covered but there is a lot to be read between the lines. Whilst doing so I have thought of a few new approaches that I will apply to my bots. There is a lot you can learn from financial algo-trading. Much of it has nothing to do with the underlying financial instrument being traded.

Although only 200 pages long the book is very interesting and I highly recommend it.

Amazon - The Perfect Bet

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