Hello my fellow Roulette enthusiasts. Today I want to discuss another fallacy that some of you may not have heard of. It is called The Hot Hand Fallacy. We have heard about the Gambler's Fallacy. The Hot Hand Fallacy is the sibling of the Gambler's Fallacy and is just as important to understand. Here is an explanation of The Hot Hand Fallacy so we know how to keep a clear mind and good judgment when we play roulette.
A gambler has had a streak of good luck. Therefore, the gambler is "hot" and the good luck will continue at a probability greater than chance.
A gambler has had a streak of bad luck. Therefore, the gambler is "cold" and the bad luck will continue at a probability greater than chance.
This fallacy is committed every day in casinos around the world, whenever a gambler thinks he's "hot". When gamblers are on winning streaks, and keep betting or increasing their wagers to take advantage of their good luck, they commit this fallacy. Despite it's name, gamblers also commit this fallacy when they think that they're "cold", and stop betting or decrease their wagers because they're on a losing streak. This is still the "hot hand" fallacy, because the logical mistake is the same.
The fundamental error is the same as in the gambler's fallacy, that is, the failure to appreciate statistical independence. Just as a fair gambling device does not remember its own past, it also does not remember a gambler's past. So, a gambler's odds of winning a current bet are not affected by whether the gambler has won or lost previous ones. Roulette wheels and dice do not have memories.
Ironically, the gambler's and hot hand fallacies can lead to contrary expectations about what will happen next: Suppose that someone bets on a "lucky" number, and wins several times in a row. The gambler's fallacy predicts that the lucky number will be less likely than chance to come up on the next bet, but the hot hand fallacy predicts that the lucky number is more likely to come up. This means that both predictions cannot be true, despite the fact that many gamblers probably have committed both fallacies, even on the same day, though not at the same time. So, these two forms of argument cannot both be cogent, and in fact both are uncogent.
It should be noted that the so-called "hot hand" in basketball and other sports may be a different phenomenon than that discussed in this entry, though it is still controversial. Since basketball and other sports are games of skill, it's possible that psychological factors may lead players to hit or miss in streaks greater than would be accounted for by chance. This is not the case for most gambling games, such as roulette, which are games of chance rather than skill.
Although Hot Hands are a phenomenon prevalent in Poker, it is actually a fallacy that Texas Holdem is all luck. Skill will negate short term variance and trump the effects of luck in the long run, whether you are challenging faceless players for money or playing live in Las Vegas.
No one is safe from being a victim of this fallacy. Even players who play on mobile casinos are sure that if luck struck once and they won a game, they're more likely to win again in the next game, and vice versa. It seems that this fallacy transcends the medium one uses in order to play casino games. However, it can be avoided by being aware of it and changing one's thought process while gambling.