# Chapter Four: The "Step-by-Step" Even Money Strategy

Exploiting Knowledge of Averages and Standard Deviations the Step-by-Step strategy is a good starting place for two reasons. First, it is a simple and easy strategy that will obtain steady wins. Second, most of the strategies I will be describing later require you to take notes and to wait for the right situation to place your bets. The Step-by-Step strategy can keep you busy until those opportune situations arise.

I also like the Step-by-Step strategy because it is statistically sound. It does not expect somehow to escape the law of averages - it relies on it. This strategy is strictly an outside bet on the even money bets of black/red, even/odd, 1-18/19-36. Though one could in theory bet all three of these at once, I think it would be rather easy to confuse the heck out of yourself. I recommend therefore to select just one. Personally I prefer the 1-18/19-36 bet because in the process of doing this strategy you may notice other betting opportunities for bets on certain pairs, streets, or dozens.

The idea behind this strategy is that by progressing bets on the even money bets by one unit per spin (following losses) one avoids running into the problems of the Martingale system. Specifically, you need only maintain a ratio of winning bets of 1 win for each 2 losses to stay even. Given that all even money bets average 47.36% in the long run (on an American wheel), one should be able to make money this way. If you can afford to do this on a single zero wheel, the odds improve because each even money bet will hit an average of 48.6% of the time.

If I had 4 losses (10 units down), two wins at 5 units each balances it out.

10 losses (55 units) would require 5 wins averaging 11 units each, etc. For example:

- Bet 1 unit and lose,
- Bet 2 units and lose (cumulative loss 3 units)
- Bet 3 units and lose (cumulative loss 6 units)
- Bet 4 units and lose (cumulative loss 10 units)
- Bet 5 units and win (cumulative loss 5 units)
- Bet 5 units and win (cumulative result is even)

Once you hang in there and survive the stretches where the "other" side dominates by a large amount and get back to the 47% or 48% average on your betting area, you make money. In theory, you should be able to make about a 21% profit:

52.6% of spins = losses

26.32% of spins = wins to catch even

21% of spins = wins for profit.

In the long run, then, one should win a profit of 21 units for each 100 spins if the basic bet is 1 unit.

Test 1: 10,000 spins.

I divided 10,000 spins into a 156 sets of 64 spins each (with 16 spins left over). I picked 64 spins fairly randomly - it just happened to be the number of spins in each column of my printout. But 64 also seemed like a reasonable minimum number of spins for a session of at least an hour. Of those 156 sessions none lost money with this system. Two times I broke even. The other 154, I came out ahead anywhere from a 1% profit to 33%. The average gain was very close to expected: 20.34%.

I then did some statistical analysis to compare the mean and standard deviation to what would be expected from a perfectly-random distribution.

The mean frequency for my bet (1-18 versus 19-36) was 46.67%, which is very close to the expected 47.37%. The standard deviation was 5.64%. This means that to the extent this sample is representative, about 68% of the time we can expect the range to be between 41.73% and 53.01% (one standard deviation); 95% of the time we can expect the range to be between 36.09% and 58.65% (two standard deviations). Remember, any session over 33.33% provides a profit. This means that in 95% of your sessions you should easily turn a profit. Below I will discuss what to do in the other 5%.

Test 2: 20,000 spins more

I repeated the above procedure twice more with sets of 10,000 for a total of 468 sets of 64 spins each. The results for the second and third 10,000 sets were almost identical to the first. There was one sequence where, at the end of 64 spins, I had not yet reached a breakeven point. I continued the series into the next set of spins and got to a breakeven point fairly quickly.

Modifying the Step-by-Step Strategy to make it Work in November 1998 two computer programmers, working independently, tested the Step-by-step system and found that it won money, but at a different rate than projected. In 1000 sets of 64 spins each, 67% of the time there was a win that averaged 21.5 units--which is much higher than I project above with a 21-unit gain per hundred spins. That is the good news. The bad news is that it lost 33% of the time. Accordingly, I am convinced that to play the strategy successfully you must have the following modifications ready to go.

The Step-by-Step strategy is based on the idea that "in the long run" each even money bet area will regress to the mean and hit about 47% of the time.

But we may run short of bankroll or patience before we get to "the long run" by running into one of those 5% of sequences that are more than 2 standard deviations away from the average. Or, in some situations, starting off with a disproportionate number of losses makes it very difficult to get caught back up. Accordingly, I suggest you keep an eye out for several betting options during the rough times that your bet is increasing at an uncomfortable rate. Comfort is a relative concept, of course. Most of the time you should be betting between 1 to 12 units. If you start betting higher than that, you should look for opportunities to alter your strategy.

Some folks with large bankrolls do not mind letting the bet get into the 20s because they are confident that the skew will end and the wheel will average out the results. But if you get nervous before then, consider some of the modifications listed below.

- Pick which even money bet to concentrate on with care. As noted above, trends can start or end at any moment. But I would still not try to buck a trend that is already in progress. Pick whichever of the even money bets that appears to be most even and stable at the time of entry: red/black, even/odd, or 1-18/19-36. Stay away from a bet where you see a serious skew where one side is heavily dominating over the other (or, bet with that skew for a while).
- Should you reach an uncomfortable bet-even as low as 5 or 10 units—you can shift to a 2-for-1 bet (the dozens or columns) to make it up more quickly than staying on your even money bet. Let us say you are up to 12 units. Keep the exact same level of bet and shift the next bet of 13 units to a single column or dozen. Since these bets pay two-to-one instead of even money, you need only half as many hits to get back to even. With an even money bet you need a ratio of one win for every two losses; with a 2-for-1 bet you need only one win for every four losses. Thus you can make up your losses within only half as many hits. Your odds for a hit for any given spin are only reduced by 16%, but your need for a given number of hits is reduced by 50%. If you are up to something like 20 units, it is reassuring to know you only need 5 hits to get back to even. You may say to yourself "Why not play just on a 2-for-1 bet with the Step-by-Step strategy?" You could! It would work effectively there also. But I think the stronger strategy is to bet on the even money bet and save the 2-for-1 option as a very effective "comeback" vehicle.
- Start placing a side bet on 0/00. You can make up ground fast with a hit or two here with relatively little additional money risked. If there is a sequence where your area is not hitting as much as it should, it could be because 0/00 are hitting more than average in this series.
- If you lose 9 in a row (with no losses due to 0/00), shift to a straight Martingale strategy and start doubling your bets. The probability of an adverse streak going past 16 are so remote that it is worth the risk. I describe this strategy in more detail in the next chapter, but keep in mind when playing this strategy as well.
- Track where your losses are occurring. If you are betting 1-18, for example, and the third dozen (25-36) has hit 5 or 6 straight times, start betting on the first and second dozen, progressing your bet to make up lost ground quickly. If you can outlast a streak of hits in one dozen of 10, you can defeat it (but make sure you are hedging your bet with bets on 0/00). Again, see the next chapter for more detail.
- Accept a modest loss and change bets. If your bet is on reds versus blacks, for example, and over a period of 30 or 40 spins you just cannot seem to get back to even, then curse the Variance Demon and change bets to even/odd or 1-18/19-36.
- Don't forget the money management techniques described earlier. Get your wins, then get out and move on.

## Bankroll Requirements

I would not recommend playing this strategy with less than 500 units. Remember, those units can be as small as 25 cents or as large as $100 each. As you will see as you read through Roulette 2000, I am a relatively conservative player. I want to take a hefty bankroll to the LIVE Dealer casino so I can outlast those temporary problem stretches. For any of the strategies described in Roulette 2000 you need to decide in advance of going to the casino what your betting limits are going to be. I am not going to prescribe a super specific formula for you--that depends on your income and how risky you like to play. But I do strongly prescribe a strong dose of preparation.

Plan ahead and know what you will do under what circumstances.

You should practice this strategy with the practice list of numbers in this kit, with a free electronic version of roulette on the world-wide web, or with a computer game version of LIVE roulette easily found at software stores. By practicing you can get a sense of how much risk you are willing to take on and how much bankroll you need to feel comfortable.

Strategy #1, then, is the Step-by-Step strategy for even money bets.