How I almost lost my money 💸| Infinite money glitch.

I was doing my mathematical project this week. It was about t-statistics 🤓.  A thought came to my mind about applying t-statistics to trend price of a stock and, in turn, make some sweet money🤑. Since I am going to have end semester exams soon in 2-3 days. It is on my bucket list for this summer.

Then this crazy idea hit me. Let’s assume there is a gambling🎲 game. The rules of the game are I can choose head or tail. More clearly, I can bet my money💲 on head or tail. Then a coin is tossed. If I get it right, then my money would double. If I lose, then my money would be gone.

This is my idea. I would bet, say, 100 in the head. If I win, I will take the 200, then I will bet 100 in head or tail according to my wish. Here is where things get a little interesting. If I lose, then I would bet 200 on the head again. Because the probability that I am going to get tail twice in succession is 1/4. Hence the probability of me winning is 3/4. Most probably, I will win now and go out with 400, that is 100 in profit.

Even if I lose the 2nd time. I would bet 800 on the head again. The probability of winning is 7/8 now. If I win now, I will walk away with 100 in profit in total. Even if I lose the 3rd time, I will double my bet as long as I want. In the end, I would always end up with 100 in profit. Cool!😎 Right? I found the infinite money glitch💸—no more worries for the rest of my life.

Now, I decided to test my theory, but I didn’t want to risk real money. I knew about the binary options in the Olymp trade📈. In which, you have to predict whether the price of a specific stock will be greaterup or less than the current price after a specific amount of time. If I win, I will get up to 82% to 10% of the money I have placed. To increase my chance of making a profit, since I wouldn’t get 100% of the money I placed. I decided to triple the betting amount If I lose. This would significantly increase my profit.

I downloaded the app📱. They have a demo account, where we can learn binary options trading using demo money. I started trading. Since stock price is set by everyday people like me who are trading. They would be random; they have an equal probability of going up or down (50-50 probability).

I started trading. I just started with 10 demo dollars. To my surprise, I doubled my money within 24 trades. Just kidding😜. I lost all my demo money which was 10,000, after trading 10-15 times. . This sounds wrong. Maybe the app is biased and just try to scam money from people.

I realised this is not app’s fault. It is my fault. I made an error in my calculations. I assumed that since the chance of something happening in succession is less, I have a good chance of winning. But when I do it over several times, the chance of me losing in succession (ex: getting tails in succession) at least once becomes larger. For example, the chance of getting two heads in succession in two throws is 1/4, but if I make four such throws, the chance of it happening at least one time is quite high. So, I would lose the second time, if I do that large number of times. Then you may say that just double the bet for the third time. If I lose again, then you would say, double the bet the fourth time.

But here is the problem. I assumed that there is no cap to the betting amount in reality, but I am wrong. Since I double or triple my bet amount every time I lose, the amount escalates quickly to a huge number. For example, if I started with 10 and tripled the bet amount every time. Then in the second bet, it would be 30, then 90,270,810, 2430, then 8290. If I lose that, I will lose all my money in my demo account. So, the max cap of money I have and the increasing probability when I do it many times say that I would lose all my money in the end. Luckily that was a demo account.

So, the takeaway for me is a small mistake in mathematics can cost you so much if you are not careful. I learned from my mistake. But I am going to apply t-statistic to the trend price of the stock in the summer.

If you have suggestions or want to get feedback on my posts. You can also contact me via email: sathishkannan6000@gmail.com. Follow me @ Twitter, Instagram, LinkedIn, Facebook for updates on my blog and my work.   Also, check out my Contact page for more information.

If you like my work, you can support me at Patreon. ☕