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the trade. That money is already written off. Because

then if you take a valid losing trade, you know that that loss

individual trades. Trying to predict the outcome of

doing the exact same thing over and over again. You're focused

gamblers and amateur traders. You must keep a long-term

because we don't care what happens on each individual

is just taking you one step closer to your inevitable

swing that way emotionally when you get it right how do you

tearing his hair out trying to predict where the roulette ball

you're going to feel depressed and that pridefulness that you

winning streak. It's just probabilities. That is

vision. Master traders focused on executing their proven edge

you're slightly better than the market but the more that you

on the next five, ten, 20, fifty, 100 trades. You have

fully accepted the risk before you even know the outcome of

the exact same way when you hit a massive winner as when you

right you can become euphoric you can really start to feel

have truly mastered your trading mindset you will feel

later? When I first started out trading and you know, people

this before, they usually often react and and you know in shock

haven't already are, you know, what is the US dollar going to

consistently make money because they have an edge that plays

casino manager sitting up in his office watching the

think you will then react when you inevitably get it wrong

think he sits up there cheering on the ball, stomping his feet

out over time. Now remember the coin flipping game from the

will land? What if a gambler puts down a big bet? Do you

games just as traders ought not to care about the results of

and they're like, what do you mean you have no idea? I

were feeling that's going to turn into a feeling of shame

these questions literally countless of times. My only

flip. We make money from applying a mathematical edge

you know you're going to feel like you're not good enough

you're going to feel stupid and disheartened now picture the

actionable certainty and secondly, it would be pointless

really proud and sort of you know supremely intelligent like

The casino manager does no. They have no idea but yet they

over hundreds of flips the same way as in trading and the issue

course not. He doesn't care about the results of individual

then ask them back if the casino knows what number the

lesson before. What if I was to have you try and predict the

with zero expectation on the individual outcome when you

if you don't know what's going to happen next? Now, at

crystal ball. As you can imagine, especially if you've

and chanting for it to not land on red fourteen? Alright, of

roulette viral with the camera feet. Can you imagine him

individual trades is just a futile exercise if favored by

may incur and all of those five are really great lessons that

outcome of each and every individual flip of the coin.

ball is going to land on in the roulette table. Of course, they

don't. It's impossible to know because an individual spin is

random, right? And it's the exact same concept in trading.

that they can participate in as many games as possible. Right,

trying to predict individual trades is that when you get it

this point, if you can be bothered to explain to them,

take the time to explain to them that, you know, we don't

losing trades because they know that that would destroy their

we can apply to our trading Now, as a currency trader, some

spin and they don't need to know. The outcome from each

already had a similar conversation with someone about

where you know the punter could potentially have a lucky win

response now is that I literally have no idea what's

going to happen to next. You know, I don't have a magical

really predict price movements per se but after answering

take a loss you won't care because you know you're just

thought you're a currency trader. How do you make money

putting maximum bet size limits on the table because that

Firstly, it would be impossible to predict with any degree of

out and survive any inevitable random losing streaks that they

puts risk management measures in place so it allows them to

plan no matter what. If they lose money on five spins in a

stay in the game long enough to see their profitable edge play

remember, to see the edge play out over time. Now, they have

money from carrying a positive profit expectancy and allowing

that could end up wiping out the casino so the casino just

and modify their strategy rules after only a small number of

so they use risk management techniques such as you know

of the common questions you no doubt will receive if you

prevents any of the punters from putting on a huge bet

no idea if it's going to win or lose but if it's random on an

they are able to amass billions of dollars in revenue each year

to change the rules of the game. They don't try to tweak

the casino never knows if they will make money on any given

individual spin or trade is completely random. They've got

probability model. And finally, they take measures to ensure

large number you to play as many games as possible,

play virtual roulette but what this means for the casino is

would ask me these type of questions, I used to try and

the casino that we can actually apply to our training? Well,

individual spin, then how do they make money? They make

what are some of the key lessons that we can learn from

row, you know, they're not getting emotional and beginning

do next? Is it a good time to buy euros for my holiday now or

it to play out over a large number of trials. The law of

nice comfortable chair in front of a big screen and essentially

about the casino for a second. The house holds a slight

you are going to go and play roulette you're actually better

games every single day. They are the masters of exploiting

mathematical edge with each game that they play and they

the law of large numbers to their advantage. Now, think

off going to Europe to play where there is only one zero

have to consider a roulette table with 10 players each with

tables everywhere they're becoming really popular and

the profitable edge works through over time. This is how

strict rules for each game and they never, they never break

essentially with these machines Ganders can just sit down on a

whereby they can play their games. Now in America they

they now require less staff and they can pretty much run games

and erect those massive grand buildings all over the world

keep playing day in, day out, every day of the year so that

and sometimes even more of these tables and they usually

the last time I was in Vegas they had electronic roulette

thousands of pounds worth of chips that they're willing to

and the odds are slightly higher on the tables there. So,

gamble and then remember each casino probably has 10, 2030

them. So, essentially, they always stick to their trade

quicker which then means they're getting in even more

actually have two green zeroes on the roulette world. So if

roulette gambler now 270 may not seem like much then you

win multiplied by the probability of you winning

£270 loss for every 100 pounds that you bet so from the

profit expectancy of £270 for every 00 pounds that is bet we

and then we divide that by our minus 100pound loss times 19

player you actually have a negative profit expectancy of a

which you then add to the amount that you can lose

open twenty-four hours a day you know even these days right

total to minus 270 so what that actually means is as a roulette

over 37 because remember there are 18 red numbers and that one

multiplied by the probability of that loss occurring. So in

casino's point of view however right they have a positive

this case that's a 100 pounds times 18 over 37 because there

green number which both means will lose so this is equal in

are 18 black numbers out of a total 37 numbers on the wheel

loss so if the ball lands on a red number or the green zero

calculate the profit expectancy. So remember the

want to make sure that we are the casino right and not the

profit expectation is the profit that you can make if you

chance of winning by flipping a heads or tails but then we ever

those will result in a loss so hopefully Remember how to

that will be a 100pound loss now out of the 37 total sells

principle. So let's use our knowledge of probability to

previous lesson with the coin toss example where it was a 50%

so slightly skewed the odds in our favor by changing the

that will just cost our initial bet which is obviously a 100-

the ball lands on a black number and we win or if we lose

18 of those are black which will result in a win and then

the other remaining 19 sells are either red or green and

calculate what your profit expectancy is with a 100 pound

to one so that just means that we'll make a 100 poundprofit if

bet on black. Now a few things we need to know a win pays one

winning payout. Well this is essentially the exact same

red cells and 18 black cells. Zero is green and that

numbers one to 36 are made up of an even distribution of 18

green zero cell, the casino ever so slightly tilts the odds

extremely simple and we're only going to concentrate on the red

for the sake of this example, we're going to keep it

and black diamonds on the bottom of the table. Now the

in their favor on each and every game. So remember in the

represents an automatic win for the casino. So by including the

standard roulette wheel is numbered from zero to 36 and

at one of the most popular tables, the roulette wheel. And

understand how they make money and then see if we can learn

some things for our trading business. So let's take a look

Casinos are the undisputed masters of the world at Playing

masterful trading. That is photon trading.

an Edge. So let's have a quick look at their business model to