The Gambler’s Fallacy: When Your Brain Lies About Luck
How This Common Bias Affects Gambling, Investing, and Everyday Decisions
You walk up to a roulette table, trying to play it safe by betting only on red or black. You glance at the electronic sign next to the table—it shows three black numbers in a row.
How would you bet?
“It must be time for red.”
“The odds favor red now, right?”
Wrong. What you’re experiencing is the Gambler’s Fallacy—a trick your brain plays on you, leading you to believe that past random events influence future ones.
What Is the Gambler’s Fallacy?
The Gambler’s Fallacy is the mistaken belief that if something happens frequently in the past, it’s “due” to occur less in the future—or vice versa—even when the events are entirely independent.
This illusion of balance occurs because people expect randomness to look evenly distributed in the short term. But in reality, streaks are a natural part of randomness.
If a fair coin lands on heads five times in a row, most people believe tails are “due” next. But each flip is still 50/50, regardless of what happened before.
The same logic applies to roulette, stock trading, and even life decisions, yet many fall for this fallacy without realizing it.
How the Gambler’s Fallacy Affects Everyday Decisions
This bias influences far more than gambling—it seeps into finance, career moves, relationships, and sports.
1. Investing & Finance
Stock Market: Investors avoid buying a stock that has been rising for days, assuming it must “come down soon,” even when market fundamentals suggest continued growth.
Trading: A trader who sees five consecutive losses assumes the next trade must be a win, leading to unnecessary risks.
Better Approach: Look at fundamentals and trends, not short-term streaks. A stock or asset doesn’t have memory—its future depends on market forces, not past movements.
2. Career & Work Decisions
Job Applications: If you’ve been rejected multiple times, you might assume your next application has a higher chance of success—even though each hiring decision is independent.
Business Success: A startup founder who sees competitors fail may believe, “A successful one is due,” instead of evaluating the actual business model and market conditions.
Better Approach: Focus on actual variables—experience, networking, and skills—not a false sense of “due success” after failures.
3. Relationships & Social Life
Dating: After several bad dates, someone might think, “The next one must be ‘the one’”, rather than questioning if they’re choosing compatible partners.
Parenting: A child who has been well-behaved for weeks might suddenly be disciplined because a parent assumes, “They must be up to something,” even without evidence.
Better Approach: Make choices based on quality and compatibility, not on the idea that “a good/bad experience is due.”
4. Sports & Superstitions
Streaks in Games: A basketball player who has missed several shots in a row may feel like their next shot is more likely to go in—or hesitate because they think “cursed.”
Lucky Charms & Rituals: Fans believe wearing a particular jersey increases their team’s chances of winning, even though past games don’t affect future ones.
Better Approach: Recognize that performance is based on skill and preparation, not streaks.
How to Avoid the Gambler’s Fallacy
1. Recognize Independence
If events are genuinely random, past outcomes don’t affect future probabilities.
In sports, careers, and investing, look at causes and conditions, not streaks.
2. Use Data, Not Feelings
Instead of assuming, check actual probabilities and factors.
Example: In stocks, research trends and fundamentals, not just streaks.
3. Accept That Randomness Includes Streaks
A series of losses (or wins) doesn’t mean things will “balance out” soon.
Streaks happen naturally in large data sets.
4. Make Rational, Not Emotional Decisions
Before making a choice, ask yourself:
“Am I basing this on logic, or just because I feel something is due?”
Final Thought
The Gambler’s Fallacy tricks us into seeing patterns where none exist. Understanding this bias can help us make better, more rational choices—whether in investing, career moves, or personal decisions.
By the way, the longest recorded streak of a single color in roulette happened in 1943, when Red hit 32 consecutive times at a Monte Carlo casino.
The odds? 1 in 10 billion.
So, did you bet on Red?
Or is that just another story you’re telling yourself?