HOW PATTERN RECOGNITION WORKS
When you are trying to employ this "pattern recognition" or "law of averages" strategy we have been talking about in the game of baccarat, what you are looking to do is make a comparison between the actual results you are seeing at any given moment and the normal distribution of results. Since you are not making "hit" or "stand" decisions but are only deciding on which way to bet, you are, in effect, not betting on yourself and taking action to increase your chances of winning, but instead are predicting who to wager on.
For this purpose we have been trying to gather and process information that would give us a better road map on how to go about it. Recording what has happened as a way of forecasting what WILL happen is the cornerstone of this approach.
Let's break down how this really works. We know from our previous coverage that the Banker bet is going to win about 45.9% of the time, that the Player bet is going to win about 44.6% of the time, and the tie is going to win about 9.5% of the time. In other words, we know what to "expect."
Alright, so you're playing in a game. Let's say it is the 21st hand, and the Player hand just won. You check it off on your pad, where you are keeping the running tally, and you can see that it is the 11th win for the Player. There are also two ties at that point, which means that as far as ties are concerned, you have two in 21, or 9.5%, which is actually right at the percentage you'd expect.
The eleven Player wins in 21 hands comes out to a rate of 52.4%, which is well over the expectation of 44.6% - 7.8% MORE, in fact. Now let's get to the Banker hands, which have won eight times in 21 hands, for 38.1%, and that is 7.7% LESS than the normal expectation.
Okay, so we know all that. So what? How do we go about acting on this information?Okay, let's stop for a moment so we can come to an understanding about something: if you were doing a little sports betting you may want to ride a streaking team, so if they won eight games in a row, you may want to continue to wager on them. It is different in the baccarat model, which is more heavily grounded in pure mathematics. In fact, it operates on a principle that is somewhat similar to card counting in blackjack, in that when you see that a lot of small cards have been dealt, it increases the possibility that more high cards will be dealt on subsequent hands. So in baccarat, for instance, if a lot of Player hands have won, out of proportion to that which you would expect, you are looking for that pendulum to swing the other way. Here, it would dictate a bet on the Banker hand, because you are figuring that things should more or less "even out." How could this translate to the amount of your bet? That will be dealt with next.