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Old 10-06-2016, 05:44 PM   #16426
johnnyBuz
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re: Winrates, bankrolls, and finances

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Originally Posted by fast11375 View Post
That is not necessarily true. Variance is a tangible cost. That is why equities prices on the stock market are heavily influenced by volatility. Or you can look at the insurance industry where people pay to reduce variance.

What value would you put $7 eV if right now we coin flip: you get either -$100,000 or +$100,007 at 50/50 chance? Your answer will probably change if the payout changes to $-5 or +$12.

But I do agree that $7 is a lot to pat for variance. If we fold in similar spots once per hour, we will lose out 2.33 blinds/hr at 1/3.
Not all EV is created equal. You can compare this to the Sharpe Ratio in finance which measures risk-adjusted return.

Sharpe ratio = (Mean portfolio return − Risk-free rate)/Standard deviation of portfolio return

Which can be adjusted to poker as simply: EV/St.Dev

Since most people are under rolled for whatever games they are playing in, I think it is worthwhile to chase all +EV situations that are negligible to your BR while passing up marginal EV spots that will have a detrimental effect on your BR (like already being stuck for the night while 300-400 BB's deep and finding yourself in a very marginal but +EV stack commitment situation).

My stretch of runbad really forced me to reconsider the notion of risk/reward at poker and decide that the long-term approach is best for achieving my goals. Sure it would be nice to be playing 10/10 again right now and I could certainly shot take on weekend nights, but the downside risk is significantly greater than the potential rewards right now, aka a low Sharpe Ratio for me personally.
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Old 10-06-2016, 06:42 PM   #16427
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re: Winrates, bankrolls, and finances

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Originally Posted by Richard Parker View Post
Just pointing out that it isn't avoiding variance. You cannot avoid variance...

Sure it's a minute detail, but that's kind of the point that everyone keeps missing in these discussions.

In your response of short-term effect, problem with adding such caveat is that when variables change, so does EV calculation. What may had been +EV is now -EV. In other words, you are not avoiding variance, you are avoiding -EV spots.
There's a really good post by Aaron Brown (it pains me to say that because I worked with him and found him just insufferable) somewhere on 2p2 where he responds to people trying to equate poker to Sharpe ratios. The gist is that unlike investing where you are trying to harvest return in a noisy market, variance is actually a weapon in poker. If anyone could find it they should post it ITT.

If you can make someone fold a +EV situation by forcing variance upon them then you are doing it right.
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Old 10-06-2016, 06:49 PM   #16428
ilike23bet
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re: Winrates, bankrolls, and finances

Is there anywhere I can look up downswing length and dollar amounts for different levels?
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Old 10-06-2016, 06:51 PM   #16429
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Different levels? It depends on way more than that.
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Old 10-06-2016, 06:57 PM   #16430
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Different stakes I was referring to not skill levels not sure if I was clear, just wanted to know if there was a thread on it already that I may have missed

Last edited by ilike23bet; 10-06-2016 at 07:01 PM. Reason: Adding to post
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Old 10-06-2016, 07:11 PM   #16431
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It really isn't the stakes that make the DS length, nor the BB amount, it is player edge (or lack thereof) and standard deviation. Stakes play a roll in $ amount, but in ways only knowable if we know approx expected winrate and standard deviation.
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Old 10-06-2016, 07:15 PM   #16432
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Again, your standard deviation is a good indicator of how deep a downswing could be. Anyone can have a long losing streak, but if there are 2 8BB winners and one plays a high variance high standard deviation LAG type game and the other plays a lower StdDev more TAG game, the TAG will tend to have less devastating downswings (and also will tend to have less huge winning days and huge winning streaks).

Only you know what your playing style is. If you have 1500 hrs you should have a pretty good indication of what a bad losing streak looks like for you.
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Old 10-06-2016, 07:55 PM   #16433
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re: Winrates, bankrolls, and finances

Figuring out bankroll requirements shouldn't be so complicated.

Don't separate "bankroll" and "living expenses." Money is money. Thinking about them as separate just confuses the matter.

1. Estimate your win-rate. Lower it a little bit to be conservative.
2. Calculate your standard deviation. You don't need a very large sample for this stat to be reasonably accurate.
3. Figure out how much you will be spending per month. Increase it a little bit because sometimes you need something unexpected or just want to spend a little. It's hard to set a $1000/month budget and follow through with it.
4. Decide how much you will play per month.
5. Decide on an acceptable RoR based on your tolerance for risk.

Now you have enough information to determine bankroll requirements.

6. Figure out your win-rate adjusted for expenses. For someone winning $15/h, spending $1050/month and playing 150h/month, this is 15-1050/150 = $8/h.
7. Use the bankroll formula or a calculator and plug in the numbers. Here is one calculator: http://www.reviewpokerrooms.com/poke...uirements.html

With an adjusted win-rate of $8/h, a SD of $200/h, and a 1% RoR, you need a bankroll of about $11,500.

This is what you are willing to lose. I would also recommend setting a stopping point before total busto so that you are not completely broke if your poker venture fails.

I wouldn't worry about emergency expenses too much. They are very rare and tough to account for. Poker variance will be the dominant factor in your RoR, not life variance. However a bigger bankroll can only help.

Be very careful when considering living expenses on a short roll. If it turns out you actually spend $1600/mo instead of $1050, you bankroll requirement about doubles with the other variables the same.

You can play more hours to minimize the effect of living expenses. Playing more than 150 hours gets hard for me, personally.

$15,000 is plenty for a single adult playing 1|2 living cheaply if they win at a good rate.
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Old 10-06-2016, 08:03 PM   #16434
ilike23bet
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Quote:
Originally Posted by browni3141 View Post
Figuring out bankroll requirements shouldn't be so complicated.

Don't separate "bankroll" and "living expenses." Money is money. Thinking about them as separate just confuses the matter.

1. Estimate your win-rate. Lower it a little bit to be conservative.
2. Calculate your standard deviation. You don't need a very large sample for this stat to be reasonably accurate.
3. Figure out how much you will be spending per month. Increase it a little bit because sometimes you need something unexpected or just want to spend a little. It's hard to set a $1000/month budget and follow through with it.
4. Decide how much you will play per month.
5. Decide on an acceptable RoR based on your tolerance for risk.

Now you have enough information to determine bankroll requirements.

6. Figure out your win-rate adjusted for expenses. For someone winning $15/h, spending $1050/month and playing 150h/month, this is 15-1050/150 = $8/h.
7. Use the bankroll formula or a calculator and plug in the numbers. Here is one calculator: http://www.reviewpokerrooms.com/poke...uirements.html

With an adjusted win-rate of $8/h, a SD of $200/h, and a 1% RoR, you need a bankroll of about $11,500.

This is what you are willing to lose. I would also recommend setting a stopping point before total busto so that you are not completely broke if your poker venture fails.

I wouldn't worry about emergency expenses too much. They are very rare and tough to account for. Poker variance will be the dominant factor in your RoR, not life variance. However a bigger bankroll can only help.

Be very careful when considering living expenses on a short roll. If it turns out you actually spend $1600/mo instead of $1050, you bankroll requirement about doubles with the other variables the same.

You can play more hours to minimize the effect of living expenses. Playing more than 150 hours gets hard for me, personally.

$15,000 is plenty for a single adult playing 1|2 living cheaply if they win at a good rate.

You def answered all my questions thanks so
Much will stop torturing you guys now
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Old 10-06-2016, 10:48 PM   #16435
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You should have enough expenses to pay three months rent, and lose for three months as well, maintaining a healthy poker bankroll the entire time.

If you use a thirty buyin rule and keep your life expenses separate you will be ok.
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Old 10-06-2016, 10:54 PM   #16436
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re: Winrates, bankrolls, and finances

Quote:
Originally Posted by scrybe View Post
If you can make someone fold a +EV situation by forcing variance upon them then you are doing it right.

I really like this quote, well done.

I'll do some search. Thanks for the reference.
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Old 10-06-2016, 11:36 PM   #16437
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Originally Posted by johnnyBuz View Post
Since most people are under rolled for whatever games they are playing in, I think it is worthwhile to chase all +EV situations that are negligible to your BR while passing up marginal EV spots that will have a detrimental effect on your BR (like already being stuck for the night while 300-400 BB's deep and finding yourself in a very marginal but +EV stack commitment situation).
Good example is cash vs tourney.

+EV spots in cash can often be -EV spots in tourney.
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Old 10-06-2016, 11:49 PM   #16438
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I spent a while today working out my standard deviation, which is 59.70 bb/hour. Then I checked the 95% confidence interval per Happy Luck Box's post, which gives me 6.84.

My win rate to date is 6.63 bb/hour +/- 6.84 = somewhere between -0.21 and 13.47. Nice to know my initial guess about my expected win rate was pretty good but wow you need a lot of hours to get a decent confidence around it. Also would help to have a higher win rate as well.

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+6bb/hour over 300 hours = probably not a huge donator but otherwise sample size too small to draw any conclusions, correct?
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Old 10-07-2016, 12:39 AM   #16439
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Originally Posted by Richard Parker View Post
Good example is cash vs tourney.

+EV spots in cash can often be -EV spots in tourney.
I don't play tournies but I would have thought the opposite where busting a tourney has minimal effect on your BR but winning a massive pot can set you up to potentially make it much deeper in the tournament.

Can you give an example of your cash vs. tournament example?

The most obvious cash example for me is getting deep at 10/10 where booking the win is way more important than a small +EV spot while deep stacked.
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Old 10-07-2016, 01:14 AM   #16440
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In tournaments there is value in moving up the pay jumps, there is value to having a certain sized stack, and there is a value to your tournament life. If someone shoves all in on you in a cash game you simply consider the pot odds to determine whether to call in that spot. That's not necessarily the case in a tournament.
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Old 10-07-2016, 01:26 AM   #16441
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In tournaments there is value in moving up the pay jumps, there is value to having a certain sized stack, and there is a value to your tournament life. If someone shoves all in on you in a cash game you simply consider the pot odds to determine whether to call in that spot. That's not necessarily the case in a tournament.
That's the whole point of the discussion: the EV alone of a cash game hand isn't enough info to make the decision - it depends on the risk/reward in relation to your BR because nearly everyone is under rolled.
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Old 10-07-2016, 03:34 AM   #16442
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I would highly advise against playing under-rolled for the most part.
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Old 10-07-2016, 06:14 AM   #16443
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roll advised to play a $5/$10/$25 game with 4 competent players, 1-2 whales, and the rest rec/fish?
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Old 10-07-2016, 06:59 AM   #16444
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depends on buyin cap. 25k if it's a one-off 1k cap. if you're buying in 2k, then like 30-35k. If you're buying in for 2-2.5k regularly, 50k roll
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Old 10-07-2016, 09:09 AM   #16445
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depends on buyin cap. 25k if it's a one-off 1k cap. if you're buying in 2k, then like 30-35k. If you're buying in for 2-2.5k regularly, 50k roll
These recommendations are probably way too low for 5/10/25 NL.

I am guessing that you would need a minimum of 75k to be rolled for 5/10/25 NL.
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Old 10-07-2016, 10:07 AM   #16446
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Yeah my guess is such a game often plays 5k+ deep, so I wouldn't play that game REGULARLY with less than 100k

Last edited by YGOchamp; 10-07-2016 at 10:35 AM.
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Old 10-07-2016, 10:44 AM   #16447
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Quote:
Originally Posted by johnnyBuz View Post
That's the whole point of the discussion: the EV alone of a cash game hand isn't enough info to make the decision - it depends on the risk/reward in relation to your BR because nearly everyone is under rolled.
That was also my point.

In a tourney, it makes sense to avoid thin spots in which your tournament life is on the line. Same can be said about someone with really small BR.

So the idea of avoiding variance actually has a very wide range depending on each person's financial circumstance, more so than the EV of an individual hand.

Thus this quote is amazing in a very subtle way:

Quote:
If you can make someone fold a +EV situation by forcing variance upon them then you are doing it right.
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Old 10-07-2016, 10:59 AM   #16448
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Agreed.

A giant part of poker (maybe more-so live poker because you can gauge reactions) is taking people out of their comfort zone.
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Old 10-07-2016, 11:05 AM   #16449
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In a tourney, it makes sense to avoid thin spots in which your tournament life is on the line.
Avoiding thin spots in tournaments has nothing to do with variance. Some spots might be chip EV+ but not $EV+. That's not a variance issue.
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Old 10-07-2016, 11:17 AM   #16450
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Originally Posted by OvertlySexual View Post
Avoiding thin spots in tournaments has nothing to do with variance. Some spots might be chip EV+ but not $EV+. That's not a variance issue.
So how does avoiding thin spots in cash game have anything to do with variance?

If you don't think it does, then alright.

If you do think it does, can't you not see the parallel?

And I don't play tourney, so please enlighten me the difference between chip EV+ and $EV+.
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