Please change the FAQ on bankroll requirements.
 

Here is the SSNL FAQ entry on bankroll requirements:

<ul type="square">
Q: What's the proper bankroll for each limit?

A: General consensus is that a player should keep at least 20 buyins for each limit he's playing. Excluding poor beginner play, bad bankroll management is the biggest reason that new players go bust. Do yourself a favor and only play in games you can afford.

Limit: $0.01/$0.02 | Needed: $40 ($100 on Stars)
Limit: $0.05/$0.10 | Needed: $200
Limit: $0.10/$0.25 | Needed: $500
Limit: $0.25/$0.50 | Needed: $1000
Limit: $0.50/$1.00 | Needed: $2000
Limit: $1.00/$2.00 | Needed: $4000
Limit: $2.00/$4.00 | Needed: $8000[/list]
This is bad.

[img]/images/graemlins/diamond.gif[/img] It should be emphasized that bankroll management is only for winning players. Losing players need a budget. Saying 'only play in games you can afford' confuses the two.

Mentioning beginners' poor play is not enough. Most experienced players lose, and many winners will lose if they move up too high, regardless of the amount of money they have in their bankroll.

[img]/images/graemlins/diamond.gif[/img] The mindless application of 20 buy-ins is wrong in both directions. The suggestion that you need $100 to play NL with a $0.02 big blind when the buy-in is 250 BB is particularly ridiculous, since the sustainable win rates are very high in these soft games, and it is much harder to lose a 250 BB buy-in than a 100 BB buy-in. The suggestion that you need a fixed number of buy-ins as you move into tougher games is dangerously wrong. The repetition of '20 buy-ins' should stop. It's like saying that it is 4:00 whenever someone asks what time it is. Sometimes it isn't far off, but that is only an accident. On 2+2, we should be able to do better.

20 buy-ins is far more conservative for a solid winning low stakes NL player than 300 BB is for a solid winning low stakes limit player. The correct analogue of the 300 BB guideline depends on your statistics, but it may be something like 10-12 buy-ins. See below.

Some people have objected that they don't feel comfortable unless they have a huge reserve. They want a security blanket, not a bankroll. Rational bankroll management is about making sure you can weather most storms, and have a low risk of ruin. For a solid winner in low stakes games, 20 buy-ins is overly conservative.

Just as the way you should play TPTK depends on many factors, the bankroll you need depends on several factors. Thankfully, it's not that complicated. The bankroll you need is c * standard deviation^2 / win rate, where c (what I call the comfort level) depends on your personal risk tolerance and ability/willingness to move down after a bad streak. Most people are happy with a value of c from 2 (aggressive) to 4(conservative). Note that this doesn't depend on the length of the sessions you play, or how many tables you play at the same time, or whether you play 6-max or full ring, or whether you buy in for 20 BB or 200 BB, except for the way that these affect your win rate and standard deviation.

If you stay at the same level without withdrawing, your risk of ruin is about e^(-2c) ~ 1/7^c.

Note the dependence on your win rate, which many people overlook in bankroll discussions. Win rates of experts are much lower in MSNL than they are in Micro NL. While 8 buy-ins may be enough to play NL $2 quite safely if you are half-decent, some winning NL $400 players (and some marginal winners at lower levels) need 40 buy-ins or more to have the same level of safety because their win rates are much lower. It is much more common to have a 10 buy-in downswing when your win rate is 4 PTBB/100 than when it is 20 PTBB/100.

For some 'typical' stats of winning SSNL players, see this thread. The survey methodology was not perfect, but the results are still quite useful.

Having overly aggressive bankroll guidelines has the obvious danger that people will expose themselves to a high risk of ruin, or to severe bankroll damage that will force them to spend a long time rebuilding. It may shake their confidence when they see downswings larger than they expected. Overly conservative bankroll guidelines are also harmful. They mean people waste more time in lower stakes games, and they provide an excuse for downswings that are strong indicators of poor play. More dangerous than either error, though, is giving a fixed answer when the answer depends on many factors.

I recommend replacing this FAQ entry with one which explains more of the rational bankroll considerations, and which uses a consensus estimate of a solid win rate at each level to determine the number of buy-ins needed for a solid winner to have a fixed risk of ruin.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
Here is the SSNL FAQ entry on bankroll requirements:

<ul type="square">
Q: What's the proper bankroll for each limit?

A: General consensus is that a player should keep at least 20 buyins for each limit he's playing. Excluding poor beginner play, bad bankroll management is the biggest reason that new players go bust. Do yourself a favor and only play in games you can afford.

Limit: $0.01/$0.02 | Needed: $40 ($100 on Stars)
Limit: $0.05/$0.10 | Needed: $200
Limit: $0.10/$0.25 | Needed: $500
Limit: $0.25/$0.50 | Needed: $1000
Limit: $0.50/$1.00 | Needed: $2000
Limit: $1.00/$2.00 | Needed: $4000
Limit: $2.00/$4.00 | Needed: $8000[/list]
This is bad.

[img]/images/graemlins/diamond.gif[/img] It should be emphasized that bankroll management is only for winning players. Losing players need a budget. Saying 'only play in games you can afford' confuses the two.

Mentioning beginners' poor play is not enough. Most experienced players lose, and many winners will lose if they move up too high, regardless of the amount of money they have in their bankroll.

[img]/images/graemlins/diamond.gif[/img] The mindless application of 20 buy-ins is wrong in both directions. The suggestion that you need $100 to play NL with a $0.02 big blind when the buy-in is 250 BB is particularly ridiculous, since the sustainable win rates are very high in these soft games, and it is much harder to lose a 250 BB buy-in than a 100 BB buy-in. The suggestion that you need a fixed number of buy-ins as you move into tougher games is dangerously wrong. The repetition of '20 buy-ins' should stop. It's like saying that it is 4:00 whenever someone asks what time it is. Sometimes it isn't far off, but that is only an accident. On 2+2, we should be able to do better.

20 buy-ins is far more conservative for a solid winning low stakes NL player than 300 BB is for a solid winning low stakes limit player. The correct analogue of the 300 BB guideline depends on your statistics, but it may be something like 10-12 buy-ins. See below.

Some people have objected that they don't feel comfortable unless they have a huge reserve. They want a security blanket, not a bankroll. Rational bankroll management is about making sure you can weather most storms, and have a low risk of ruin. For a solid winner in low stakes games, 20 buy-ins is overly conservative.

Just as the way you should play TPTK depends on many factors, the bankroll you need depends on several factors. Thankfully, it's not that complicated. The bankroll you need is c * standard deviation^2 / win rate, where c (what I call the comfort level) depends on your personal risk tolerance and ability/willingness to move down after a bad streak. Most people are happy with a value of c from 2 (aggressive) to 4(conservative). Note that this doesn't depend on the length of the sessions you play, or how many tables you play at the same time, or whether you play 6-max or full ring, or whether you buy in for 20 BB or 200 BB, except for the way that these affect your win rate and standard deviation.

If you stay at the same level without withdrawing, your risk of ruin is about e^(-2c) ~ 1/7^c.

Note the dependence on your win rate, which many people overlook in bankroll discussions. Win rates of experts are much lower in MSNL than they are in Micro NL. While 8 buy-ins may be enough to play NL $2 quite safely if you are half-decent, some winning NL $400 players (and some marginal winners at lower levels) need 40 buy-ins or more to have the same level of safety because their win rates are much lower. It is much more common to have a 10 buy-in downswing when your win rate is 4 PTBB/100 than when it is 20 PTBB/100.

For some 'typical' stats of winning SSNL players, see this thread. The survey methodology was not perfect, but the results are still quite useful.

Having overly aggressive bankroll guidelines has the obvious danger that people will expose themselves to a high risk of ruin, or to severe bankroll damage that will force them to spend a long time rebuilding. It may shake their confidence when they see downswings larger than they expected. Overly conservative bankroll guidelines are also harmful. They mean people waste more time in lower stakes games, and they provide an excuse for downswings that are strong indicators of poor play. More dangerous than either error, though, is giving a fixed answer when the answer depends on many factors.

I recommend replacing this FAQ entry with one which explains more of the rational bankroll considerations, and which uses a consensus estimate of a solid win rate at each level to determine the number of buy-ins needed for a solid winner to have a fixed risk of ruin.

[/ QUOTE ]

Having gone through the worst downswing of my life recently, I can say that the often quoted 20 buy-ins as an adequate bankroll is a load of [censored]. If you multi-table, you need at least AT LEAST 40. That assumes that you are a winning player and don't move down.

Just my opinion.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
[ QUOTE ]

I recommend replacing this FAQ entry with one which explains more of the rational bankroll considerations, and which uses a consensus estimate of a solid win rate at each level to determine the number of buy-ins needed for a solid winner to have a fixed risk of ruin.

[/ QUOTE ]

Having gone through the worst downswing of my life recently, I can say that the often quoted 20 buy-ins as an adequate bankroll is a load of [censored]. If you multi-table, you need at least AT LEAST 40. That assumes that you are a winning player and don't move down.

Just my opinion.

[/ QUOTE ]

Multitabling hardly affects your risk of ruin beyond the extent that it affects your win rate and standard deviation. You also don't need a larger bankroll to play on a site which deals hands faster, unless this affects your win rate/100 or standard deviation/100. You get the same downswings faster, not larger downswings.

Bankrolls are not supposed to protect you from the worst downswing you could ever encounter. They are supposed to give you a low risk of ruin. If your win rate is healthy, 20 buy-ins will give you an extremely low risk of ruin even if you can't move down. E.g., if your win rate is 16 big blinds/100, and standard deviation is 80 big blinds/100, then your risk of ruin is about 1% when you have 9.2 buy-ins, and 0.1% at 13.8 buy-ins.

If you are willing to move down, you can decrease your risk of ruin even further. If you have 10 buy-ins at your current level, but will drop down to half of the stakes when you drop to 5 buy-ins, then you need to lose about 15 buy-ins to bust out.

If 20 buy-in drops were common, then this would indicate that you need a larger bankroll, and the mathematics would reflect this. However, anecdotal evidence is close to worthless. There are a lot of people, which means that some people will have hit rare occurences. Further, experienced winning players may report large downswings in tougher games than the ones covered by that FAQ entry, and it is hard to tell the difference between the story of a solid winner, and the story of a break-even or losing player who blames variance for a lack of skills. Large (10+ buy-in) downswings are not common for solid winners in soft games. Solid winners in microstakes games don't need anything close to 20 buy-ins to have a microscopic risk of ruin.

The FAQ's suggestion that you should have $100 to play for pennies is particularly absurd and misleading. It's not the end of the world if the FAQ says 2+2=3. However, if you are going to have a serious FAQ, it should be close to correct, and this entry is not.

Re: Please change the FAQ on bankroll requirements.
 

FAQs like these are not meant for solid winning long term player, as a solid winning longterm player would already have a good grasp on variance and general bankroll management. Recommending 20buyins at the microstakes is good for the less experienced players FAQs like this are geared towards. It is more than they need if they were solid winning players, but they're probably not. So the FAQ already [indirectly] covers your two points, that you need less than 20buyin rolls at the microstakes if you're a solid winning player and that losing players obviously need a buffer as they will inevitibly go broke unless they improve their game.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]

a solid winning longterm player would already have a good grasp on variance and general bankroll management.

[/ QUOTE ]
Usually not. What I see is that people hear nothing but "20 buy-ins," which they apply religiously and out of context. Experienced players often have misconceptions about bankroll management. It would raise the level of discussion if the FAQ were not wrong.

[ QUOTE ]

Recommending 20buyins at the microstakes is good for the less experienced players FAQs like this are geared towards.

[/ QUOTE ]
If it is right to recommend 20 buy-ins for NL $25, then it is wrong to recommend 20 buy-ins for NL $5 with a $0.02 big blind, and for NL $400. The one-size-fits-all recommendation is wrong in both directions, and suggesting that there is a uniform guideline is misleading.

If you think recommending 20 buy-ins is good to protect less experienced players, why not recommend 100 buy-ins? Or 1000? It's bad advice, it misleads people, and you lose credibility, and that is what happens now because the FAQ says the common $50 deposit is not enough to play for pennies. (I doubt any decent player has ever had a $50 downswing playing with a $0.02 big blind in the history of online poker. $100 is ridiculous.) The FAQ should be correct and it should state the context of its advice. The FAQ should say

[img]/images/graemlins/diamond.gif[/img] Bankroll management is for winning players, not for experienced players. A bankroll does not give you the skills you need to win.
[img]/images/graemlins/diamond.gif[/img] Those who play in tougher games, and those who have a lower win rate, need a larger bankroll to be safe. Not a fixed 20 buy-ins.

The FAQ should also answer the common question of whether multitabling affects your bankroll requirements.

Re: Please change the FAQ on bankroll requirements.
 

its a FAQ, its supposed to answer quick questions for people who have no idea and try to play 2/4 with $962 or whatever. Stop overthinking this stuff and just play poker.

Re: Please change the FAQ on bankroll requirements.
 

Bankroll management is for winning players, not for experienced players. A bankroll does not give you the skills you need to win.
Those who play in tougher games, and those who have a lower win rate, need a larger bankroll to be safe. Not a fixed 20 buy-ins.

Re: Please change the FAQ on bankroll requirements.
 

meant to quote that...

Couldn't agree more though, pzhon. As a general rule take your worst losing streak and triple the amount of buyins you need for a bankroll at the level you play.

For instance if your worst loss has been 10 buyins then you need 30 buyins to play comfortably.

Re: Please change the FAQ on bankroll requirements.
 

Agreed on all points.

One of the most mind-blowing things I have ever read, was Fimbulwinter asserting that he has "never had a downswing of more than 6 buyins". And he played a lot of hands at relatively high stakes afaik. Genius or no, that would be impossible in today's games imo, even as low as 100NL.

Re: Please change the FAQ on bankroll requirements.
 

i think you have to consider how willing you are to move down

if you move down quick a 10bi roll at 200 is really many more bis

Re: Please change the FAQ on bankroll requirements.
 

hasnt it been heavily discussed that poker is not gaussian, and our stdev is a load of crap?

quotes like an 8ptbb winner has 1% ror with 9 buyins just feel plain niave. maybe its just a bad example because nobody runs at 8ptbb anymore, except maybe live players.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
hasnt it been heavily discussed that poker is not gaussian, and our stdev is a load of crap?

[/ QUOTE ]
Not really. There were long threads, but most of the posts were not written by people who understand the relevant mathematics. Lots of the posts were saying, "Can someone translate this into English?"

Has any evidence been given that shows a significant difference from the normal approximation for this purpose? In the long run, the Central Limit Theorem says the deviations from the mean are roughly Gaussian. This doesn't apply directly to downswings, but it applies indirectly. The downswings are not much different for poker outcome distributions than they are for normal distributions. By the way, poker players would love to believe poker is special and extreme, but from the mathematical perspective, the distribution of poker outcomes is pretty tame. It's not clear whether poker outcomes should produce slightly larger or slightly smaller downswings than Brownian motion.

Regarding the standard deviation, what I saw was a statement that PokerTracker has an error in its calculation of the standard deviation, and the statement that this error would be severe if you play a session of 100k hands. Ok, but no one plays sessions of 100k hands. How large is the error when you play more reasonable sessions of a few hundred to a couple of thousand hands? A few percent? Then the bankroll guidelines might be off by about twice that.

[ QUOTE ]
quotes like an 8ptbb winner has 1% ror with 9 buyins just feel plain niave.


[/ QUOTE ]
Why, because you trust anecdotal evidence more than mathematics? I happily bet the other way. The analysis of a mathematical model, done properly, is much more reliable than stories from people who exaggerate, who are not objective, and who don't describe the context properly. E.g., they tell you of a downswing, but not that they switched from NL $100 FR to NL $200 6-max before hitting the downswing, and that they might not be able to beat the new game. They just hope it is variance. You don't hear from the people who didn't have that downswing. Rational bankroll management is about balancing the very real cost of playing in games too small with the risk of ruin, not making sure your bankroll can handle the worst recorded downswings, so anecdotal evidence is not particularly useful.

Still, the worst downswings people report are smaller (in buy-ins) at NL $10 than at NL $400. My worst downswing at NL $25 was between 4 and 5 buy-ins. My worst dowswing in slightly more NL $100 hands was 11 buy-ins. That's not surprising because my win rate was much higher at NL $25, as is typical.

[ QUOTE ]
maybe its just a bad example because nobody runs at 8ptbb anymore, except maybe live players.

[/ QUOTE ]
There are still plenty of people winning at 8 PTBB. $10,000 against $1000 says I can do it at NL $5. Maybe it is no longer achievable at NL $600, but it's still possible at many lower levels. I think 30 PTBB/100 is still sustainable for pennies, and lower rates that are still over 10 PTBB/100 are sustainable in other microstakes games. The FAQ covers those levels, and it should be correct for those levels. If 20 buy-ins is right for NL $25, it is wrong for NL $2 and NL $400.

Re: Please change the FAQ on bankroll requirements.
 

A bankroll of like 10 buyins is ridiculous. Everyone feels like they could never go on that sort of downswing until it happens to them, then they change their tune.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
A bankroll of like 10 buyins is ridiculous.

[/ QUOTE ]
No, it isn't. I say this as an experienced poker player and as a mathematician. The Kelly criterion recommends even lower bankroll requirements.

[ QUOTE ]
Everyone feels like they could never go on that sort of downswing until it happens to them, then they change their tune.

[/ QUOTE ]
Once again, rational bankroll management is not about having a larger bankroll than the worst recorded downswing. You will eventually hit a 20 buy-in downswing if you play long enough, but that doesn't mean you aren't safe if you start with 10 buy-ins. Almost all of the time, by the time you hit a huge downswing, you will have won a few buy-ins. Often, you will be ahead hundreds or thousands of buy-ins at that point, so saving a small fraction of your winnings will let you survive a 20 buy-in downswing.

If you are so conservative that you think you need to have 20 buy-ins for NL $25, that's ok. But then it is quite inappropriate for you to play NL $400 with only 20 buy-ins. It is wrong for the FAQ to say that you need the same number of buy-ins when you play for pennies with people who don't realize you can take money away from the table if you have some left, and who make curiosity overcalls, as you do when you are playing NL $400 with several professional players at your table and one LAG fish.

Re: Please change the FAQ on bankroll requirements.
 

IMO, pzhon makes a number of very good points in this thread.

As for myself, I have a low-variance style and at 200NL I don't need more than a 20 buy-in bankroll. My biggest downswing so far is 10 buy-ins, and while playing 4 tables, this leaves me with a 6 buyin margin.

I can imagine that LAGs need more buyins to play comfortable.

But playing with a roll of 10 bi's can be okay if you have the discipline to move down when you lose a few bi's. For example, when I'm trying out a new site, I deposit a couple hundred $'s on it and start out at 50NL. While building the roll I move up when I have around 10 bi's for the next level, but move down if I drop below 6 bi's of that level. The downside is that I have to move down after every downswing, which can be annoying, but still I'll never bust my roll.

I do like to have 20+ buyins though (or well - at least 15) because I'll make more $$$ if I'm never forced to move down.

Re: Please change the FAQ on bankroll requirements.
 

The main reasons for having a large roll are psychological. If you're not used to swings and lose half your money then the implied tilt odds are nasty.

Re: Please change the FAQ on bankroll requirements.
 

pzhon is correct. If he wants to offer up something short and easy for noobs to undersatnd as a new bankroll FAQ, I would seriously consider adding it to the FAQ and sticky as long as AJ, isura and orange had no objections.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
Once again, rational bankroll management is not about having a larger bankroll than the worst recorded downswing. You will eventually hit a 20 buy-in downswing if you play long enough, but that doesn't mean you aren't safe if you start with 10 buy-ins. Almost all of the time, by the time you hit a huge downswing, you will have won a few buy-ins. Often, you will be ahead hundreds or thousands of buy-ins at that point, so saving a small fraction of your winnings will let you survive a 20 buy-in downswing.

[/ QUOTE ]

Well I suppose if you keep all your winnings as part of your bankroll, you don't really have a 10BI bankroll at all, do you? If you withdraw and spend all your winnings and keep your bankroll at 10BI, you will eventually run into some big trouble. Yes, if you start with 10BI you're unlikely to busto and will probably grow it, but you'll just end up with the 20+BI bankroll everyone recommends.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
The main reasons for having a large roll are psychological. If you're not used to swings and lose half your money then the implied tilt odds are nasty.

[/ QUOTE ]

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
its a FAQ, its supposed to answer quick questions for people who have no idea and try to play 2/4 with $962 or whatever. Stop overthinking this stuff and just play poker.

[/ QUOTE ]

this is correct. the guideline was meant to stop the endless luckyjimm style of moving up with just a few buyins then busting the whole roll and starting over again. anybody that wants to be more aggressive with their moving up is going to do it regardless of what the FAQ says. if we're trying to protect new players from going bust, id say being more conservative with the FAQ is the way to go.

Re: Please change the FAQ on bankroll requirements.
 

Many of the posters here are responding as though anecdotal rumor trumps math. It doesn't. Undoubtedly Pzhon is correct. The real answer is a) bankroll requirements assume that you are a winning player (a dubious assumption for most) and b) the amount of a sufficient bankroll depends on a number of interrelated factors: your proven winrate, standard deviation, and tolerance for risk.

I would agree that the FAQ could be more much more "correct" by explaining this analysis. But I think it would be a shame also if a newbie couldn't leave the FAQ with a reasonably solid and useful answer as opposed to a "it depends." If all its going to do is theorize, its not really a useful FAQ. 20 is in some sense "wrong," as Pzhon points out, but its not nearly as "wrong" as many of the ideas that can float around in a newbie's head.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]

Well I suppose if you keep all your winnings as part of your bankroll, you don't really have a 10BI bankroll at all, do you?


[/ QUOTE ]
You might when you start, and when you are considering starting to play at a level (or leaving it) is when you are most concerned with the adequacy of your bankroll.

There are alternative methods for determining the size of bankroll that you need. Instead of aiming for a low risk of ruin assuming that you never move up or down or withdraw (these assumptions do not have to be true), you could assume that you withdraw all winnings above your starting amount, and aim for a low risk of ruin within a fixed number of hands, say a million. The math is harder, involving differential equations instead of algebra, but it can be done. I have been thinking about writing an article for the 2+2 magazine on this approach.

Regardless, any sensible method will say that you need a larger bankroll to be safe when your win rate is lower, as it is in tougher games like NL $400, rather than in ridiculously soft games, like NL $2. The FAQ says you need a fixed number of buy-ins, so it should be changed. If you like a number for NL $25, then you shouldn't like that number for NL $2 or NL $400.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
the guideline was meant to stop the endless luckyjimm style of moving up with just a few buyins then busting the whole roll and starting over again.


[/ QUOTE ]
Really? I know the origins of the 300 BB guideline, but I didn't know the 20 buy-in guess (which is far more conservative than 300 BB in typical online low stakes games) was based on anything. Shouldn't the FAQ give correct information instead of trying to stop people from doing something?

[ QUOTE ]

anybody that wants to be more aggressive with their moving up is going to do it regardless of what the FAQ says.


[/ QUOTE ]
The FAQ should not mislead people about what is conservative and what isn't. It should give correct information, and then people can make their own choices.

At NL $0.01-$0.02, if you win 20 BB/100 (much more is possible) with a standard deviation of 60 BB/100, then the FAQ's suggestion of 5000 BB (20x250 BB buy-ins) will give you a risk of ruin under 10^-24. That's like the chance of winning 3 lottery drawings in a row. Isn't that a little too conservative? It's ridiculously more conservative than playing NL $400 with 20 buy-ins.

[ QUOTE ]
if we're trying to protect new players from going bust, id say being more conservative with the FAQ is the way to go.

[/ QUOTE ]
Give correct information, and let people rationally risk busting out if they want to.

Bankroll management assumes busting out is a disaster. However, for most microstakes players, it isn't a disaster to lose their balances. It's an inconvenience. For a midstakes player, it is much more serious problem, since it is less common for people to have an extra $10k lying around than $100. So, the mathematical guidelines are already quite conservative for microstakes players.

When you overstate how frequently large downswings occur to winning players, you are telling people that a large loss is a weaker indicator of poor play than it really is. You also discourage people from taking shots at higher levels when they are ready, and when they would have a low risk of ruin.

Rational bankroll management is not about minimizing risk. To minimize your risk, quit poker. Bankroll management theory should help you to decide whether the added risk of playing in a higher stakes game is worth the added profit you expect to make. To make the correct tradeoffs, don't overstate the risks, or pretend that NL $400 is just as soft as NL $2.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
pzhon is correct. If he wants to offer up something short and easy for noobs to undersatnd as a new bankroll FAQ, I would seriously consider adding it to the FAQ and sticky as long as AJ, isura and orange had no objections.

[/ QUOTE ]
Thanks, I'll work on one.

Re: Please change the FAQ on bankroll requirements.
 

If this is going into a sticky, I think it needs big red disclaimers everywhere, otherwise alot of people are going to go busto (even if it's their fault). What they're going to take away from it is "oh, well if winning players only need 10 buy-ins, then thats all I need too"

Re: Please change the FAQ on bankroll requirements.
 

http://forumserver.twoplustwo.com/showfl...rue#Post8465243

http://forumserver.twoplustwo.com/showfl...e=0#Post8449205

Re: Please change the FAQ on bankroll requirements.
 

obviously if you can do the math correctly the bankroll you need to play different limits is going to change according to your winrate etc. having a 10 bi role is fine if you move down whenever you get down to 5-6 bi's. I think if a change were to be made to the FAQ, it should include some of the math and the fact that bankroll requirements will change as you move up, but also keep the part that says "as a convention people usually say to keep 20bi's to the limit you want to play."

Re: Please change the FAQ on bankroll requirements.
 

Everything pzhon has said in this thread is obviously correct.

I do think that whatever goes in a revised FAQ should make clear what the goals of optimal BR management are, and what they aren't.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
If this is going into a sticky, I think it needs big red disclaimers everywhere, otherwise alot of people are going to go busto (even if it's their fault). What they're going to take away from it is "oh, well if winning players only need 10 buy-ins, then thats all I need too"

[/ QUOTE ]
You are suggesting that correcting the FAQ would be dangerous. How would it be more dangerous than the current situation? If you think a corrected FAQ should require disclaimers, then you should be even less satisfied with the current entry.

A losing player who thinks a bankroll gives him skills will bust out with 20 buy-ins. Do you think a lot of players have been busting out by following the current FAQ entry? The FAQ should say that bankroll management is for winning players. It doesn't say that now.

Re: Please change the FAQ on bankroll requirements.
 

[ QUOTE ]
http://forumserver.twoplustwo.com/showfl...rue#Post8465243

http://forumserver.twoplustwo.com/showfl...e=0#Post8449205

[/ QUOTE ]
What points do you think these threads make? They don't speak for themselves, and it's easy to jump to an incorrect conclusion from a quick reading.

For one thing, while most people will look at the graphs ZBTHorton gave and assume that he has established that he is a solid winning player before hitting that 40+ buy-in downswing, that's not true. Just as I mentioned happens in stories of downswings, he changed from the relatively soft Party games to the shark-infested games on PokerStars.

ZBTHorton ran at 5 PTBB/100 for 40,000 hands at NL $200, after which a rough 95% confidence interval for his win rate ranged from about 0.5 PTBB/100 to 10 PTBB/100. I'm sure he'd like to believe that he was neither lucky nor unlucky in that period, so the 5 PTBB/100 would represent his true win rate, but it's likely that he was lucky in the first 40,000 hands, and unlucky in the next 40,000 hands to lose it back. It's much more common to see a result that is +2 standard deviations followed by -2 standard deviations (or +1.5 followed by -2.5) than to see par followed by -4 standard deviations. If his true win rate is 2 PTBB/100 in those game conditions, then in some sense, a 40 buy-in downswing is about as surprising as it is for a player who wins 8 PTBB/100 with the same standard deviation to have a 10 buy-in downswing.

As for the other thread, there is a lot of unsubstantiated speculation, but don't miss this comment by Pokey: "As a result, the simulated paths should trend upward more sharply and have far less volatility than the Poker Tracker numbers would have us believe." I'm not sure I agree overall, but that particular factor Pokey identified means that the mathematical models may still be overly cautious, despite recommending 10 buy-ins or less in some cases.

Re: Please change the FAQ on bankroll requirements.
 

Given your formula for BR i should have 16,5bi. I have 10bi+ downswing every 15k hands or so ( a bit more) so if i add a bit of tilt i can be "ruined" 3 times a month WOW. I dont like that [img]/images/graemlins/frown.gif[/img]

Re: Please change the FAQ on bankroll requirements.
 

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Given your formula for BR i should have 16,5bi. I have 10bi+ downswing every 15k hands or so ( a bit more) so if i add a bit of tilt i can be "ruined" 3 times a month WOW. I dont like that [img]/images/graemlins/frown.gif[/img]

[/ QUOTE ]
Wow that's quite often...

Re: Please change the FAQ on bankroll requirements.
 

This is a fantastic post.

The key point is that a players bankroll should be a function of win rate, standard deviation (volatility in their play), and comfort level.

We could build a simple table to guide people based on these formulas. The table could contain guidelines to help people estimate their win rates and StdDev as a function of experience, playing style and level. We could use the voluntary statistics survey to help with the estimates.

This would give people more information to use to make better decisions on their bankroll management. It would actually help people avoid going broke because they would be able to estimate the needed bankroll to move up levels.

For example we could probably help build tables with information like: If your win rate at $100nl is X then your win rate at $200nl will probably initially be X*Y and this would help people determine their needed bank rolls much more accurately.

Re: Please change the FAQ on bankroll requirements.
 

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Given your formula for BR i should have 16,5bi.

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Which values did you use for c, SD, and WR? What is your confidence interval for your win rate?

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I have 10bi+ downswing every 15k hands or so ( a bit more)


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I'm skeptical. How many of these 10 buy-in downswings have you had in the past 200,000 hands? If you want to be believed, please show us a graph covering several of these downswings (and the win rate you claim). Or did you just have two such downswings that close to each other, and want to claim that such an exceptional grouping is typical? If that is really the typical spacing, then you should have observed many spacings which are much less than 15k hands, and that should be visible in the graph.
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so if i add a bit of tilt i can be "ruined" 3 times a month WOW. I dont like that [img]/images/graemlins/frown.gif[/img]

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You withdraw all of your winnings? Who said that was a good idea? You will bust out eventually if you expose yourself to a microscopic risk of ruin repeatedly. That doesn't mean you should pretend that the microscopic risk is larger than it is.

Your track record already includes your current pattern of tilting. A little bit of tilt wouldn't put you over the edge that often. A significant amount of tilt on top of your usual level would, if you are withdrawing all of your winnings for some reason, and if your 10 buy-in downswings are really as common as you say.

The security blanket you need to avoid tilting is not a rational matter. It will vary from person to person. However, recognizing that you can rebuild from a lot less than 20 buy-ins with high probability may help you to avoid tilting when you do face a bad streak.

Re: Please change the FAQ on bankroll requirements.
 

I have never heard of Pzhon, but I absolutely love his dedication to correctness. I understand the perspective of some of the negative responses, but pzhon's points are very accurate, and I like his idea.

The bottom line is that as you develop as a player you begin to understand the bankroll you require to feel comfortable and play your "A" game. Hopefully, you also gain some basic understanding of statistics in the process to help you identify a proper bankroll for yourself. Certainly putting a more detailed/accurate description of our "rule of thumb" can only be a good thing.

Regarding what people take away from it, I don't really care. If anyone reads this thread and goes banging away with a tiny bankroll, then it is there own fault. This forum is not here to protect people from themselves. We are here to study and share information.

Good work, OP.

Re: Please change the FAQ on bankroll requirements.
 

this thread was waaaay tldr for me, but i think that if someone cares this much they are probly right and we should change it