I always thought your ROI meant "return on investment." Which means if I originally purchased gold at $500 dollars an ounce and it went all the way up to $2,000 an ounce, I would get a 400% return on my initial investment.
My initial poker investment was $2 dollars of my own money. It shouldn't matter how many times I reinvest my money into other poker games
. Just like in the stock market, you reinvest your earnings and your dividends. For example, if I buy Google for $1 dollar a share and it eventually goes up to $600 hundred dollars a share, I ultimately made a 60,000% percent return! I don't break it down each time I reinvest my $500 dollars, and then my $520 dollars, and then my $550 dollars, and so forth... Remember, I started with just one dollar!
My percentage rate of return in poker would be about 5 percent (Based on my winning percentage). However, my return on my initial investment would be 50 fold, or 5,000%.
However, this is not the reason
why I wrote in this forum. The following is the reason:
Lets just say you bought in for $500 dollars, and played 200, $10 dollar heads up sitngo's and you won 150 of them. That's pretty damn good, giving you a 75% win rate.
: You played straight through, but you hit a nasty cold streak between games 175 to 181 where you lost 6 in a row. However, the cold streak didn't matter because you played just $10 dollars at a time. By game 200, you won 50 more matches than you lost, for a net profit of $500 dollars, therefore doubling your money to $1,000 dollars, for an ROI of 100%.
: You decided to double down
on your loses, so you could make a profit faster, but you hit the same cold streak between games 175 to 181. You lost 6 in a row. Unfortunately by doubling down to try to recoup your loses, you lost $10, $20, $50, $100, $200, and finally $400. Because you doubled down, You lost a total of $780 dollars over those 6 games. By game 200, you still won 50 more matches than you lost, but instead of being up $1,000 dollars, you are down, minus -$220 dollars from your original $500. Your ROI is somewhere around -40%
. However, you still won a total of 150 games out of the 200 you played, for a 75% win rate.
As you can see, your ROI is more dependent on the bankroll management strategy you choose to utilize rather than your poker skill level. The person in both scenarios is an outstanding, winning,
poker player, who consistantly wins 75 percent of his matches. However, how he chose to manage his money ultimately determined if his ROI was 100% or -40%.
Hope this helps