Poker Variance and Bankroll Management (Day 20 Course Discussion)

Debi

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There are a lot of ups and downs in poker so Poker Variance and Bankroll Management are important to study.

If you have not yet read Day 20 and watched the video for Day 20 - take a few minutes now to do that and then come back here to discuss it:

Poker Variance and Bankroll Management

Collin discusses ROI (return on investment), ITM (in the money) and what kind of bankroll you need for various games on day 20. Let's continue that discussion here and ask Katie and Collin any questions you may still have on these topics.

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ammje

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Thank you very much for this article, it has helped me to better understand the variance and good bankroll management.
Sometimes when the variance is against you, you can make many mistakes, such as playing off the bench, and this can lead you to lose all your money.
 
Debi

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Thank you very much for this article, it has helped me to better understand the variance and good bankroll management.
Sometimes when the variance is against you, you can make many mistakes, such as playing off the bench, and this can lead you to lose all your money.

That is so true - we have to keep ourselves in check!

Be sure to check out the other chapters too - I learned something from each of them. :)
 
Polytarp

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Here are some points which are shaping my approach to playing this year as a recreational player:
-father and son bull joke
-What No One Else Is Saying about Online-Poker (I re-read this once in a while and the author was nice enough to respond to my emails ~2010)
-The Wealthy Barber (Pay yourself first - I met the author at a local coffee shop)
-Time Value of Money/Opportunity Cost/Kelly criterion
-Rake/Cost of depositing/retaining/withdrawing funds at a poker site
-Swag value.."rewards..(ahem..)" such as chests, tickets...for player loyalty
-Electricity cost, Social cost and inability to play value-laden games due to circumstances and other ancillary considerations for a cost/benefit

Assuming I factor these considerations into a projection covering the four sites I play at until year end 2020 so that all the above (and more) fixed and variable costs are accounted for so that I can establish break-even points over a feasibility threshold...say by playing free rolls only can I now start lining up quantifiable goals? If I want to earn (at least) $5 Million playing poker what is the optimal path I must traverse through all the games I must play and must avoid? My expectation is that part of the total variance in each game will be contingent on my ability..essentially "bank-ability."

Within this topic relative to specific player fields that populate (sometimes inundate) certain poker games, would "Arrow's Impossibility Theorem" and the "Nakumura Number" apply?

I took a quick look at your poker stars Shark Scope stats and noted that over about 15 years you played an average of 13 games/day there until 07/19 when the tracking stopped. Your trending is clear but knowing now what you didn't know then (possibly) is there anything you would have changed regarding your poker bankroll management?
 
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Thank's! I thought only I can't find patience to play tourny with 100 buy-ins. Thank's for showing that you can play with 25 buy-ins. Sometimes..
I also like how is shown the difference among profit and number of games.
 
Therminator

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Wonderful lesson and definitely one of the most important to learn. So many people can tilt and make bad decisions when variance is against them and luck just doesn't go their way.
 
Katie Dozier

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Here are some points which are shaping my approach to playing this year as a recreational player:
-father and son bull joke
-What No One Else Is Saying about Online-Poker (I re-read this once in a while and the author was nice enough to respond to my emails ~2010)
-The Wealthy Barber (Pay yourself first - I met the author at a local coffee shop)
-Time Value of Money/Opportunity Cost/Kelly criterion
-Rake/Cost of depositing/retaining/withdrawing funds at a poker site
-Swag value.."rewards..(ahem..)" such as chests, tickets...for player loyalty
-Electricity cost, Social cost and inability to play value-laden games due to circumstances and other ancillary considerations for a cost/benefit

Assuming I factor these considerations into a projection covering the four sites I play at until year end 2020 so that all the above (and more) fixed and variable costs are accounted for so that I can establish break-even points over a feasibility threshold...say by playing free rolls only can I now start lining up quantifiable goals? If I want to earn (at least) $5 Million playing poker what is the optimal path I must traverse through all the games I must play and must avoid? My expectation is that part of the total variance in each game will be contingent on my ability..essentially "bank-ability."

Earning at least $5 million playing poker is a very impressive goal! The thing about monetary goals in poker is that they are a lot different than setting income goals in more "normal" professions where they can essentially be the same as saying "I'll work at least X hours a week." Therefore, I prefer to focus on what we can control--the amount of intense studying and playing that reaching a comparable amount of money would be likely to take. Of course that in it of itself is also difficult to compute! Continually seek to improve would be one of the most important aspects of being a long-term winning pro player.


Within this topic relative to specific player fields that populate (sometimes inundate) certain poker games, would "Arrow's Impossibility Theorem" and the "Nakumura Number" apply?

These are unfortunately not concepts I'm familiar with--care to enlighten me and let me in on what you find them to have in common with poker? :)

I took a quick look at your Poker Stars Shark Scope stats and noted that over about 15 years you played an average of 13 games/day there until 07/19 when the tracking stopped. Your trending is clear but knowing now what you didn't know then (possibly) is there anything you would have changed regarding your poker bankroll management?

This is a case where average number of games for me is not really painting an accurate picture of how I play :) not sure if you mean me or Collin but the same is applicable to both of us as we play a lot more than that on the days we play, but will have stretches of zero games played on various sites for various reasons (or even because we're playing live).

As for your question, I have always erred on the side of being overly cautious with my bankroll. It helps me to continually play my best while minimizing financial stress, and for me I really am happy with how I've approached this over the years. Perhaps though the one thing I would do differently is to have taken a few more shots in high-stakes tournaments over the years--though this would be terrible advice for the majority of players and is only really applicable to me because I favor such a conservative bankroll. :)
 
Polytarp

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These are unfortunately not concepts I'm familiar with--care to enlighten me and let me in on what you find them to have in common with poker? :)


This is a case where average number of games for me is not really painting an accurate picture..


Perhaps though the one thing I would do differently is to have taken a few more shots in high-stakes tournaments over the years--though this would be terrible advice for the majority of players and is only really applicable to me because I favor such a conservative bankroll. :)

Katie, thank you for your detailed answers!

https://en.wikipedia.org/wiki/Arrow%27s_impossibility_theorem
..decision theory, where a person has to make a rational choice based on several criteria
[Rather than a voting system consider Arrow's criteria relative to a poker game (and field this game is a part of) where betting replaces voting and where Pareto efficiency is used to measure betting effectiveness...something like purchasing and using raffle tickets at a church bazaar.]

https://en.wikipedia.org/wiki/Nakamura_number
The number is named after Kenjiro Nakamura (1947–1979), a Japanese game theorist who proved the above fact that the rationality of collective choice critically depends on the number of alternatives.
..a simple game is just an arbitrary collection of coalitions; the coalitions belonging to the collection are said to be winning; the others losing.

[An aspect of this "measure" is to view how the stack sizes perceive one another relative to their mutually assessed card ranges and if their behaviors will be skewed towards competition/cooperation depending upon the "threats/opportunities" faced by bets/raises and who is initiating them.]

The above are from Wikipedia with my interpretation in square brackets.

Regarding the average number of games played, it's not accurate but not completely misleading either. There is something to work with there if some rational spadework (guesstimating) is done.

I was in the 33-M SCOOP after winning an $11 ticket in a $4 Spin then converting that ticket into a satellite win for the $109 game (I was knocked out with an AKu vs 10 10 preflop after some re-raising. You are (and will continue to be) successful because of your bankroll management and your ability.
My quandary is that I am somewhat successful at the $4 Spin games but there is a dramatic difference in the potential prizes in the $22 Spin games. My bankroll for the $4 games is $100 (which is not conservative)..I usually play the $2.75 Spins for tickets. Simple math requires a bankroll of about $600 to play the $22 games but how much more difficult would they be to win? The same kinds of cards will be coming out but I'm expecting that the betting will be different. What kind of generic player level can I expect relative to what is provided in the course?

I've also qualified for the SCOOP 01-M [Phase 2] (barely) and have registered for five other $100k+ games from the $22 tickets won in the Spin games. Perhaps I'll be lucky;)
 
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PsychoVas

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I am at the stress point of my tournament play. I mean that I am becoming day after day more convinced that unless you get lucky, tournaments are not a way to make profit from poker. Over the last couple of weeks, I get eliminated with at least 65% odds in my favour. Wether it's early or deep, mostly early, I get gutted. Add that to the times I get coolered and the ones I get outplayed, the sum spells
d i s a s t e r.
In fact my intermediate state of understanding the game has a huge negative impact on my mental approach to the game. I play expecting the negative outcome and most of the times it is realised. P.e. yesterday, fairly deep in a tourney, after the first 4 ladders I think, I get pocket Aces. After a limp I raise 4x, limper calls, flop is 2 suits, I bet the pot, limper calls, turn pairs the board, I get him all-in as I have some 18 BB more and the moment he calls I am sure that he draws for the flush and that the river is going to complete his hand. My read - and my prediction - were spot on.
If I were more of a spiritual person, I would believe that I attract negativity.
To cut the blabber short, I am fairly convinced that variance in tournaments is exponential and not linear as it is in cash games, where every hand has equal impact on your game. Thus any edge you might have is rendered insignificant faced with the idiotic random move that gets lucky.
 
Polytarp

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Over the last couple of weeks, I get eliminated with at least 65% odds in my favour.


(I hope you looked at Nash's dissertation where I sent you a link a little while ago).
I "was" recently in the same frame of mind you seem to be in because of the same outcomes under the same circumstances and perhaps what I did will help you also. Simply assess if it is advantageous for an opponent to call you or not (this is a loaded question which you will appreciate after digging into it). I had a hand with trip Kings post flop which I should have folded but didn't, I went all-in instead and lost. My opponent won on a flush draw. The ability to properly mathematize the situations (nothing magic) you faced, may help to lessen the number of times you will lose with superior hand...but lose you will..and then again you just might have bad karma.
 
Katie Dozier

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Katie, thank you for your detailed answers!

https://en.wikipedia.org/wiki/Arrow's_impossibility_theorem
..decision theory, where a person has to make a rational choice based on several criteria
[Rather than a voting system consider Arrow's criteria relative to a poker game (and field this game is a part of) where betting replaces voting and where Pareto efficiency is used to measure betting effectiveness...something like purchasing and using raffle tickets at a church bazaar.]

https://en.wikipedia.org/wiki/Nakamura_number
The number is named after Kenjiro Nakamura (1947–1979), a Japanese game theorist who proved the above fact that the rationality of collective choice critically depends on the number of alternatives.
..a simple game is just an arbitrary collection of coalitions; the coalitions belonging to the collection are said to be winning; the others losing.

[An aspect of this "measure" is to view how the stack sizes perceive one another relative to their mutually assessed card ranges and if their behaviors will be skewed towards competition/cooperation depending upon the "threats/opportunities" faced by bets/raises and who is initiating them.]

The above are from Wikipedia with my interpretation in square brackets.

Regarding the average number of games played, it's not accurate but not completely misleading either. There is something to work with there if some rational spadework (guesstimating) is done.

I was in the 33-M SCOOP after winning an $11 ticket in a $4 Spin then converting that ticket into a satellite win for the $109 game (I was knocked out with an AKu vs 10 10 preflop after some re-raising. You are (and will continue to be) successful because of your bankroll management and your ability.
My quandary is that I am somewhat successful at the $4 Spin games but there is a dramatic difference in the potential prizes in the $22 Spin games. My bankroll for the $4 games is $100 (which is not conservative)..I usually play the $2.75 Spins for tickets. Simple math requires a bankroll of about $600 to play the $22 games but how much more difficult would they be to win? The same kinds of cards will be coming out but I'm expecting that the betting will be different. What kind of generic player level can I expect relative to what is provided in the course?

I've also qualified for the SCOOP 01-M [Phase 2] (barely) and have registered for five other $100k+ games from the $22 tickets won in the Spin games. Perhaps I'll be lucky;)


Those concepts are super interesting and I’ll be looking more into them—thanks for pointing them out! :)

I’m not personally familiar with the $22s on stars right now so unfortunately I can’t say for sure except that I would expect them to be fairly reg-infested (I.e) having a lot of winning players in them.

My approach to any move up in buyin is to have an answer to the question: what am I doing better than the regulars in this game to best insure I will be beating that? And if I can’t answer that question then I shouldn’t play in that game :)
 
cferdi

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I am at the stress point of my tournament play. I mean that I am becoming day after day more convinced that unless you get lucky, tournaments are not a way to make profit from poker. Over the last couple of weeks, I get eliminated with at least 65% odds in my favour. Wether it's early or deep, mostly early, I get gutted. Add that to the times I get coolered and the ones I get outplayed, the sum spells

d i s a s t e r.
In fact my intermediate state of understanding the game has a huge negative impact on my mental approach to the game. I play expecting the negative outcome and most of the times it is realised. P.e. yesterday, fairly deep in a tourney, after the first 4 ladders I think, I get pocket Aces. After a limp I raise 4x, limper calls, flop is 2 suits, I bet the pot, limper calls, turn pairs the board, I get him all-in as I have some 18 BB more and the moment he calls I am sure that he draws for the flush and that the river is going to complete his hand. My read - and my prediction - were spot on.
If I were more of a spiritual person, I would believe that I attract negativity.
To cut the blabber short, I am fairly convinced that variance in tournaments is exponential and not linear as it is in cash games, where every hand has equal impact on your game. Thus any edge you might have is rendered insignificant faced with the idiotic random move that gets lucky.


I said in another thread that I have also been having some trouble in tourneys lately, particularly with suckouts, and allins. However, I like tournaments and continue to play them and think that lately things have gone bit wilder because more recreational players are entering the field due to the coronavirus, possibly. They are there just to pass the time and have fun and either don't know how to play properly and read sign, or just don't care.

It may also just be a downswing, but that a few of us are experiencing a downswing lately seems to support my theory. We may simply need to either ride it out or adjust our play slightly under the current climate.

In the last few days, in early tournament, I am playing far far fewer hands and just letting them knock each other out. If there are betting rounds, I do the betting, but if the fish call, I find they usually like to bet, so I let them call into me when I have the best hand and they pay me off handsomely - yes, I sometimes get sucked out, but they'd call anyway.

I save my good play for the later game when most of the idiots have gone, or for the CC games, or the odd site where things are less mad (I find unibet less hectic) and practice my lessons where I can.

Another point, I remember a lesson on game selection. Some players are better at cash, some at tournament play, some at SNG, , etc. Maybe you haven't found the right format for you? I do ok at cash, but love tournament, so tend to do much better there, Just something to think about.

Good luck:)
 
cferdi

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Thanks for another great lesson, one question though, to use that software you need to know your ROI% right? How do we know this?

I'm gessing maybe tomorrows lesson is going to tell us this. However, right now, I have used up all my Free Trials on HUDs and can't yet afford to buy, so I need to wait a while :-(
 
Collin Moshman

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Good question Cferdi!

Yes you need to input an ROI, but you can look at this analysis as a "What-If." For example, "What if I have a 5% ROI playing 9-man SNG, what will my swings look like?" So it's very useful even without knowing your exact ROI.
 
Phoenix Wright

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Gus Hansen is one of the world's top high stakes pros (obviously a talented player with great ROI I am sure). However, this lesson reminds me of the Day 15 lesson on game/table selection where we were given the "fun fact" where Gus lost $20M USD on full tilt poker.

My question is: Does anyone know what his bankroll management/variance looked like? Are there interviews or recorded data on this?
 
Katie Dozier

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Gus Hansen is one of the world's top high stakes pros (obviously a talented player with great ROI I am sure). However, this lesson reminds me of the Day 15 lesson on game/table selection where we were given the "fun fact" where Gus lost $20M USD on Full Tilt Poker.

My question is: Does anyone know what his bankroll management/variance looked like? Are there interviews or recorded data on this?


I'm trying to remember if his book "Every Hand Revealed" touched on that at all though I don't believe it did. Greatly enjoyed reading that one though!
 
Luvart

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For 9-man SnG I believe that a player who has worked hard on his game and has a solid grasp of the push-fold part of the game, they are a good option in the long run.

For the MTTs, luck is always a factor at this format of poker.

And I always take the average solution when it comes to the MTT bankroll management: 300 up to 400 buy-ins, I use 350 buy-ins. The variance can be brutal in MTTs.
 
redboy23

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Fellow CCers,
I am pleased with my improved edge at the cash tables and ITM finishes in MTT's and the small but steady increase in my bankroll. This course is paying off, as I am making better plays as well as reads at the table and exercising better restraint. I have been making some really huge lay-downs of late which has saved me the regular bust-outs I would have fallen victim to before.



Response to video question:

I expect the graph to have less of a return with the winner takes all structure. Hero would have to play more games to realize a profit or see less of a profit over the same number of games. The software shows that Hero has to play 40 games to realize a profit between $1 and $50 on average. So Hero's profit is much smaller over the 100 game range playing winner takes all.

Nice topic and thanks for the software introduction.
 
freddydr87

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This is very important to know because a lot off peaple rush thiere climb to the next level buy in and iff they louse a couple off game the scarymoney fealing start to apier and that afects your game a lot.
In my personal experiense when i start playing more cash NL2 tham freerolls i wanthed to go to the next level as fast as a could so i ask some other players and they have a really agrasive bankroll management and i take theire advised and whent to NL5 with a bank off 80 and the result was that i had to came back to NL2 several time becase of the scary money was so big that i couldnt handle that preasure and start playing diferently that i use to do.
There are a lot off book and streamers that tells you how manny buy ins you need to start playing one level. My advise is that you need to know yourself in orther to know how manny buy ins you are confortavle playing with(this depend a lot in you bb/100 in cash or your ROI in MTT), now i know that i feal very confortavel with 100buy ins in cash but iff for any reason i have to play a lower stake i can do it with 30 to 40 cashes because i know i have beaten that lvl allready and is hard for me to go broke there.
 
Ivansito26

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poker will always be unpredictable as they say the course theme, since we find all kinds of players, and above all we look for different poker juices where in one without control we can lose double our bankrol .. And we also want to level up when we have not yet improved a low level of betting, and if there are weak players who have a long winning streak but are more losers than winners, we must know how to control the bankroll and level up whenever we already dominate in which we are and continue to rise even if months go by but we must have security before leveling up since we are at risk our bankroll
 
Edison A

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Bankroll management, a discipline that few players apply
It is interesting what you say about ROI, putting it into practice and looking for profits
Tips like, Flatter payout (greater% paid more even amounts) seemed really good
Thanks Guys!
 
Andrew Popov

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BRM is the most important thing every successful poker player needs to understand. You may not know something from the strategy of the game, but if you do not comply with BRM, all your work will end sadly.
 
deyvsonflp

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A very important concept that I should have learned at the beginning. I made many mistakes for not following a correct bankroll management and for that reason I regret it. Thankfully, there was time to correct and maintain correct management. Another important thing in management is to define the game grid.
 
Yanko57

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I think this course should have been shown on week 1.

I lost my entire bankroll several times because I didn't knew anything about bankroll management.

I'm used to teach poker to friends and family and they all do the same mistake: not following rules of BRM. I try to warn them several times, but to no avail.

Great video :)
 
Collin Moshman

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I think this course should have been shown on week 1.

I lost my entire bankroll several times because I didn't knew anything about bankroll management.

I'm used to teach poker to friends and family and they all do the same mistake: not following rules of BRM. I try to warn them several times, but to no avail.

Great video :)

Thanks Yanko, you're right that the importance of bankroll management can't be overstated. Glad you're showing your friends and family how it's done!
 
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