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=========================================   Thursday, May 2, 2002
 
Card Counting Concept Applied to the Derivative Method

Hello everyone,

We all know the famous card counting method developed by Edward Thorp gives an edge to the player playing Blackjack.  In this newsletter we will see how we can apply this great concept to my Derivative Method in order to even further increase your winning chances in casino gambling.

Let's start first with a refresher on this famous card counting method.

In  blackjack, your probability of winning a particular hand is very dependent upon the mix of the cards remaining to be played. If this mix of cards happens to contain an abundance of high value cards (ex. 10's), then your chances of winning increases. On the other hand, if the mix contains an abundance of low cards (ex. 2 through 6), then your chances of winning are not good. This has been proven over and over again by countless millions of computer studies, i.e. a deck (or shoe) rich in tens will favor the player and a deck deficient in tens or containing an excess of low cards will favor the dealer.

The reasons why a ten rich deck favors the player is because,
1) there will be more blackjack and pat hands (17 through 21) dealt. Even though the dealer has an equal chance of receiving a good hand from a ten rich deck, the dealer doesn't get paid 3 to 2 on a blackjack hand (but you will!).
2) With a two card hand totaling 9, 10, 11, the dealer can't double in a ten rich deck, but you can.
3) The dealer's chances of busting a 12 through 16 hand is greater in a ten rich deck. Remember you don't have to hit these hands if you don't want to; the dealer however must. So you see there are many advantages and options available for the player to increase his/her winnings in a ten rich deck whereas the dealer doesn't have these advantages.

Now a deck deficient in tens or containing a surplus of low cards, favors the dealer because the chances of him receiving a pat hand (17 through 21) are good when he must (by the rules) hit his 12 through 16 hands.
If you don't believe all this try this test at home. Play several hundred hands of blackjack with a deck of cards in which you've removed the 5's and 6's (and created a ten rich deck). Repeat the process, only this time remove the tens and jacks (now you have a ten poor deck). You will find you should win more playing with the ten rich deck.

Now in order to know when a deck is ten rich or ten poor, you must keep track of all the cards as they are played. If you obviously see a lot of little cards being played then it stands to reason that there is probably a lot of high cards left in the remaining deck which signifies a ten rich deck and your chances of winning increases. If this is the case, a card counter, or a person who is keeping track of these cards, would increase his bet. On the other hand, if the counter knows from "counting" the cards that the remaining cards to be played are ten poor, one would bet the minimum since the chances of winning are not good.

This illustrative example of how card counting works should help you to understand this concept.

In a single deck of cards there are 26 red cards (hearts and diamonds) and 26 black cards (clubs and spades). Assume we played a game whereby you can bet as much as you'd like, that a card selected at random from the 52 card deck will be the color you preselect. It should be obvious that your chances of selecting a red card or black card is 50:50 since there is an even distribution of red (26) and black (26) cards. Let's assume you bet 1 chip on a red card and you then proceed to pick a red card from the deck. You have won 1 chip. Now we play the game again by reshuffling the remaining 51 cards. How much would you bet and on what color? You should be betting on black. Why? Because by seeing the previous card selected (red) you now have the knowledge that in the remaining 51 cards, there are 26 black and only 25 red. There is one more black card than red, so the chances of selecting black are slightly greater than those of selecting red. Of course, there are no guarantees that you will select a black card, but still, this is the best percentage play for you to make.

Of course, in actual casino play you won't be counting red or black cards. In fact the card counting method which Henry Tamburin has successfully used and taught for years is what is known as a simple plus minus count and it goes like this. Every time you see a 2, 3, 4, 5 or 6 card you assign them a count value of +1. The 10, J, Q, K, Ace count -1. The 7, 8, 9 are neutral and count as 0.

At the start of a shoe, your count is 0 and as each card is played you must arithmetically add its count value. For example, if you see the following cards played: Ace, 6, 4, 3, 9 -you would count -1 (the ace) plus + 1 (the 6) plus +1 (the 4) plus +1 (the 3) plus 0 (the 9) and your arithmetic total or count is +2. You continue to count (or add) all the cards until a round is completed and you have a final count.

If this count is a positive number you generally have a deck which is favorable because more high cards remain in the deck (in order to get a positive count you must have counted a lot of little cards). If instead the count is negative, more tens, picture cards and aces have been played and the advantage shifts to the casino.

A counter now enjoys the ideal playing conditions. If the count is positive, his/her chances of winning increase and therefore bets larger amounts. If the count is negative, the counter bets the 1 minimum or nothing at all (why bet when the dealer's chances of winning are greater than yours?) Thus over the long run, card counters lose as little as possible when their chances of winning are poor but more importantly, they win much more when they have the advantage. In fact a counter has up to a 1 to 2% advantage over the casino.

Now, how do we apply this wonderful concept to the derivative method, so this privilege will not remain only for blackjack but can be used in other games as well, as if you recall the derivative method is applicable to any game using any system.

To quickly summarize the derivative method, it's a means to skip failure points of a system and play only in favorable conditions, thus avoiding you to get caught in a losing streak.  The derivative method was fully documented in the newsletter of February 14, 2002, that you can find by clicking:  http://www.letstalkwinning.com/winalert_February14_2002.htm.

The derivative method requires you to approach a table, start tracking the decisions without betting and apply the system on paper until the system reaches a failure point.  Then you would join the game and apply your system.  Having skipped the losing streak, your chances of winning are highly increased, unless, of course, two losing streaks occur back to back.  Then you would need to apply the second level of the derivative method, which requires more patience and more tracking.

At times, however, the tables are quite crowded and it is impractical to apply the derivative method as documented, because the minute you want to join the game, you can't find an empty seat at that table.   So, now comes the card counting concept mixed with the derivative method handy.

Let me explain.  You join the table as soon as you find an empty seat.  Instead of waiting, not betting and tracking, which will not be tolerated, you start applying your system right away.   However, you use the smallest unit possible.  Win or lose some bets, you keep on using the smallest amounts you can bet, as if you were counting cards and the result was negative numbers.  Then, when an unavoidable losing streak occurs, you don't lose that much as your bets were small.  This would mark your failing point.  After a few consecutive wins, which is equivalent to counting positive numbers, you are ready to apply the system at its full fledge and would increase your betting unit by 5 or 10 times the units with which you initially started off.

This will enable you a similar advantage and results to card counting in blackjack.

I have tried this with FBMP (Flat Bet Mini Play - Baccarat system) last week and was very successful.  I was using the straight method with flat bets using initially $20 chips, which were the minimum at the Baccarat tables in Casino of Montreal.  My profits and losses were slowly fluctuating with the normal winning tendency of the FBMP system.  Towards one fourth of the shoe, I encountered 8 consecutive losses, which brought me to -4 units as I was up +4 before it happened.  After that, two consecutive wins marked the beginning of a winning streak.  I raised my bets to $200 a unit.  Wins and losses now fluctuated in a more positive way.  At this stage I was up by 6 units using $200 units. 

So, it's easy to do the math.   I was down by 4 units with $20 chips being at -$80. Then won 2 units on a Player bet being at -$40.  Then was up by 6 units with $200, gaining $1200 minus commissions on 4 banker bet winnings, that is +$1160, overall profiting $1160 -$40 or $1120.

You're welcome to test this combined concept and I am sure you will be satisfied with the results.

Wishing you all the best,
Until next week,
Izak

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