What would happen then if I always increased my risk % to 25% when the fishes were playing, and then decreased back to 0.25% when a whale comes along?
What will happen is that smart investors with bots will take a majority of the winnings when small fish are playing, and then will drop down to 0.25% when the whales play. Fucking the low-risk investors like mechs who will be stuck at 0.25% by diluting them.
This is exactly the bot that I will be coding. If it is released as open-source and everybody uses it, you will see wild fluctuations of max bet size when whales start playing. This will have the effect of scaring away whales and large bettors who will see the max bet size drop as soon as they start martingaling or playing large.
Of course it would be fairer to all investors if the max bet was static at 0.50% or 1%, but now investors will be gambling against each-other by diluting each-other at the right times.