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You are meant to convert your loss into betting units. You calculated the probability of losing $397.5 in 971 hands flatbetting $1. You lost 79.5 units, so the correct formula is =NORMSDIST((-79.5+971*0.004046+0.5)/(971^0.5*1.16)), which gives a much more reasonable 1.8% or 1 in 55 chance.
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