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- In this video I'm going to debunk some myths about poker variance and share best practices for how to manage your bankroll in tournament poker.
- Poker players have a lot of variance in their lives, and tournament players more so than cash game players. Not only do tournament players face financial variance, they also face time variance.
I have written a lot about expectation and variance over the years. Without getting into a lot of mathematical jargon, you should be familiar with these two basic terms.
Expectation is basically an average. It measures what the average result will be over a large number of trials. Averages can be very deceptive when there are a few extreme (very high or very low) values. The median is another measure that overcomes this problem. It is found by arranging observations in order and then picking one in the middle.
To illustrate this difference let's look at the wealth of a US family. The average net worth is about $700,000, but this includes a few very rich people. The top tenth of a percent has an average net worth of over $40 million. The median net worth is around $100,000, quite a lot less than the average.
Variance In Live Poker Tournaments
Variance measures how much influence extreme values have. A low variance means that there aren't a lot of extreme values. The average is close to the median. A high variance means that there are extreme values that have a lot of influence on the result. Standard deviation is another way in which variation is expressed. It is the square root of variance, but has computational benefits.
Let's see how these apply to two poker players, who both have won an average of $100,000 per year for three years. To make it simple I dropped three zeros, and used sample calculations from an online calculator:
Live poker has variance just like any other form of poker. The thing about live poker variance is that it's much slower and prolonged than what you'll normally encounter in online play. With online poker, a player can swing up or down 5-10 buy ins in a single day. These types of swings are very uncommon in live poker due to the much slower.
Player A is a tournament player, and B is a cash game player.
| Year | A | B |
| 1 | -100 | +80 |
| 2 | +500 | +120 |
| 3 | -100 | +100 |
| Average | +100 | +100 |
| Variance | 12000 | 400 |
| Standard Deviation | 346 | 20 |
Tournament players have a much higher variance than cash game players. This implies they need a much bigger bankroll or backers to reduce their risk of going broke. The above calculations omit taxes and expenses which are also more punishing on a tournament player. Nothing too novel or earthshaking in the above analysis. Now I'm going to extend the idea of variance away from financial variance and on to life variance.
Most people in the United States have lived lives without much variance. Henry David Thoreau called this leading a life 'of quiet desperation.' Poker players have a lot of variance in their lives, and tournament players more so than cash game players. Not only do tournament players face financial variance, they also face time variance. When I head off to the Rio to play a World Series of Poker event, I don't know if I'll be done in 12 minutes or 12 hours. Obviously, this makes planning social activities, exercise, or anything else a lot more difficult.
The coronavirus pandemic has introduced much more variance, even into lives that are ordinarily extremely uneventful. Work, education, shopping, investing, socializing, and entertainment are completely different than they were a few months ago. Normally, one might try to predict the future by examining current trends and assuming they'll continue forward, but here we have no history on which to base our guesses.
Those of us who were of college age in the ‘60s, remember protesting. We protested against the war in Vietnam. We protested for civil rights, and ending Southern segregation. In some ways, those protests seemed to achieve their objectives: the war ended and the civil rights acts were passed. In reality, the United States has been in an endless series of wars or ‘peace-keeping' efforts. Minorities are still discriminated against. The unnecessary variance that a black person experiences ranges from trivial to deadly. More protests and more upheavals are coming.
Climate is going to be another huge source of variance in our lives. We are probably past the tipping point. Now we will have to learn to deal with more storms, each year's more severe than the last. Coastal cities will flood. Droughts and fires will become more common. Already a lot of areas in the world have trouble getting enough food and fresh water.
My only advice is to try to prepare for rising variance in our lives.
You can also find more ways to entertain yourself. We've been binge watching TV series. I recommend Sneaky Pete, which is about con artists and has some episodes involving poker. I would also recommend studying poker. In the next column, I will get to some specific recommendations of what to study and how to study it.
Steve ‘Zee' Zolotow, aka The Bald Eagle, is a successful gamesplayer. He has been a full-time gambler for over 35 years and has two WSOP bracelets. He can be found at some major tournaments and playing in cash games in Vegas. When escaping from poker, he hangs out in his bars on Avenue A in New York City – The Library near Houston and Doc Holliday's on 9th St. are his favorites.
Expectation is basically an average. It measures what the average result will be over a large number of trials. Averages can be very deceptive when there are a few extreme (very high or very low) values. The median is another measure that overcomes this problem. It is found by arranging observations in order and then picking one in the middle.
To illustrate this difference let's look at the wealth of a US family. The average net worth is about $700,000, but this includes a few very rich people. The top tenth of a percent has an average net worth of over $40 million. The median net worth is around $100,000, quite a lot less than the average.
Variance In Live Poker Tournaments
Variance measures how much influence extreme values have. A low variance means that there aren't a lot of extreme values. The average is close to the median. A high variance means that there are extreme values that have a lot of influence on the result. Standard deviation is another way in which variation is expressed. It is the square root of variance, but has computational benefits.
Let's see how these apply to two poker players, who both have won an average of $100,000 per year for three years. To make it simple I dropped three zeros, and used sample calculations from an online calculator:
Live poker has variance just like any other form of poker. The thing about live poker variance is that it's much slower and prolonged than what you'll normally encounter in online play. With online poker, a player can swing up or down 5-10 buy ins in a single day. These types of swings are very uncommon in live poker due to the much slower.
Player A is a tournament player, and B is a cash game player.
| Year | A | B |
| 1 | -100 | +80 |
| 2 | +500 | +120 |
| 3 | -100 | +100 |
| Average | +100 | +100 |
| Variance | 12000 | 400 |
| Standard Deviation | 346 | 20 |
Tournament players have a much higher variance than cash game players. This implies they need a much bigger bankroll or backers to reduce their risk of going broke. The above calculations omit taxes and expenses which are also more punishing on a tournament player. Nothing too novel or earthshaking in the above analysis. Now I'm going to extend the idea of variance away from financial variance and on to life variance.
Most people in the United States have lived lives without much variance. Henry David Thoreau called this leading a life 'of quiet desperation.' Poker players have a lot of variance in their lives, and tournament players more so than cash game players. Not only do tournament players face financial variance, they also face time variance. When I head off to the Rio to play a World Series of Poker event, I don't know if I'll be done in 12 minutes or 12 hours. Obviously, this makes planning social activities, exercise, or anything else a lot more difficult.
The coronavirus pandemic has introduced much more variance, even into lives that are ordinarily extremely uneventful. Work, education, shopping, investing, socializing, and entertainment are completely different than they were a few months ago. Normally, one might try to predict the future by examining current trends and assuming they'll continue forward, but here we have no history on which to base our guesses.
Those of us who were of college age in the ‘60s, remember protesting. We protested against the war in Vietnam. We protested for civil rights, and ending Southern segregation. In some ways, those protests seemed to achieve their objectives: the war ended and the civil rights acts were passed. In reality, the United States has been in an endless series of wars or ‘peace-keeping' efforts. Minorities are still discriminated against. The unnecessary variance that a black person experiences ranges from trivial to deadly. More protests and more upheavals are coming.
Climate is going to be another huge source of variance in our lives. We are probably past the tipping point. Now we will have to learn to deal with more storms, each year's more severe than the last. Coastal cities will flood. Droughts and fires will become more common. Already a lot of areas in the world have trouble getting enough food and fresh water.
My only advice is to try to prepare for rising variance in our lives.
You can also find more ways to entertain yourself. We've been binge watching TV series. I recommend Sneaky Pete, which is about con artists and has some episodes involving poker. I would also recommend studying poker. In the next column, I will get to some specific recommendations of what to study and how to study it.
Steve ‘Zee' Zolotow, aka The Bald Eagle, is a successful gamesplayer. He has been a full-time gambler for over 35 years and has two WSOP bracelets. He can be found at some major tournaments and playing in cash games in Vegas. When escaping from poker, he hangs out in his bars on Avenue A in New York City – The Library near Houston and Doc Holliday's on 9th St. are his favorites.
Variance In Live Poker Deuces Wild
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Variance In Live Poker Games
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