Quote:
Originally Posted by Ronny Mahoni
Could you elaborate a little on the equally distributed placings?
Does that mean if I achieve my ROI with a higher% 1st places -> the sample goes up,
While same ROI with higher 3rd places -> sample sizes goes down?
Yes, the required sample size varies with how a winner usully finishes.
Sample size needed depends on the variance of winnings. I looked at four placing distributions when In The Money for 3 placings: Uniform 1-1-1 (all places equally likely) Symmetrical ( 1-2-1), First likely (3-2-1) and Third likely (1-2-3). Of course there is a fourth possibility and that’s out of the money.
The highest variance is First Likely where I assumed winning first is 3 times as likely as finishing third, given you are ITM. The reason it has the highest variance is because when it wins it most often wins the highest amount and that means it has the largest dispersion from not winning at all.
Finishing third most often has the smallest deviation from not winning.
Hope this helps clarify.