In Part I, I discussed the need for self-awareness in your wagering. You need to be constantly checking to make sure that you are not influenced neither by variance or by emotional betting, such as being motivated by fear or greed. You need to remain humble at all times — long-term trends tend to dominate and positive emotion can skew you off to the side.
I’d like to add a few more specific items which you need to be aware of in order to be a winning player at wagering. Here’s the list:
- Strength of own position: You need to have an accurate and realistic sense of where you stand at all time in whatever game you are playing. Overconfidence will lead you to make poor decisions, which while turning out okay in the short term, will bankrupt you in the long term. It is perfectly okay (and encouraged) to take longshot positions, but you need to be realistic on the edge that you actually possess.
- Playing Scared: The saying goes, “Scared money never wins,” and it’s true. A corollary to this statement is that playing to break even is playing to lose. When you are afraid of losing money, that is exactly what happens — you lose money. The fear begins a risk-averse thought process that leads to poor long-term (and usually short-term) decisions. You need to be aware if you are cutting corners to save money and playing less than needed for the situation. Or whether you are making a bet that you can’t see lose. Much money at the end of budgets is lost from playing scared.
- Gambler’s Fallacy: There is an overwhelming belief among gamblers that after a series of loses — especially close ones — that they are due for a win. This is a fallacy because you are never due — each bet (for the most part) is an independent event and its resolution has no effect on others. Those earlier losses have no effect on the next bet and there is no added probability to it because of them.