Why are we so afraid of variance?

[Sean Fraley]

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risk of ruin?

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Once again, this is an issue of bankroll management, not playing style. In the event that someone is in a position where they absolutely cannot reload enough to play $2NL, something can be said for playing a more conservative game. Even then, play conservative initially, but play less conservative as your roll grows and don't move up until you are rolled to handle the swings.

[Bowlboy]

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I agree with the issue concerning bankroll and variance. I think that the more appropriate course of action would be to drop down a limit and make decisions that maximize earnings, as opposed to being more conservative in how you play. Or to put it another way, adjust your bankroll requirements, not your play. While you might lose a some in hourly rate initially, I believe that you would make up for it later by the increase in PTBB/100 when you finally moved back up. I think that one of the important things that we need to keep in mind down here in the micros is to develop good habits of play while the stakes are cheap, so that way we have as much advantage as possible when they get more expensive.

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I agree and disagree a lot here. I started out playing 6max 2NL on stars with a $40 bankroll or something. At first I played very conservative but that was okay there since I was pretty new to NL and to be honest could not really afford to reload. I worked myself up to 10NL and started 6tabling. I think that their are a lot of slightly +EV opportunities that I've given up not just because I deemed it high variance, because let's face it any big pot you are going to play as a slight favorite is going to be high variance but I only have like 9seconds to act and given that amount of time, I'm not sure if I really am slightly favored or not.

Some might criticize me for this and that maybe I should play less than 6 tables and maximize my EV per hand but I'm sorry, It's about money per hour. By avoiding some of these situations I tilt less. Yes we should all strive to become immune to tilt but I've played about 100k hands of NL and I'm still tilting every now and again.

If you are a winning player, why would you drop down a limit? Being shy of gambling on small edges should not make you want to drop down in limits and earn less money, playing a limit you are way over rolled for. At 10NL, I'm averaging just under $8/hour. That's in USD which is probably about $10/hour in CDN. This is'nt my primary income, but I've been struggling financially lately and this is helping me pull in an extra $200/wk right now.

I've taken shots at 25NL and variance has nipped me in the butt, forcing me to drop back to 10NL or tilt off half my bankroll that I worked so hard to build. I'm fairly confident that sometime this year I'll end up playing 25NL and making at least $15/hour but for the time being, my bankroll is not replenishable and I'm getting by financially.

[Adelson]

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The main problem is that people aren't robots so you also need to take into account the emotional reaction to variance as well as the odds. If someone is likely to tilt then they absolutely should not play high variance poker until they fix their problem.


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Bingo. Many people play worse when running bad than when running good. Their past results influence their future decisions, hurting their winrate. Poker players who tilt often and badly would be well-served to adopt a low-variance strategy rather than embrace high-variance plays.

[avfletch]

Most people don't have a problem playing 55% edges for their whole stack. The problem stems from this being a game of incomplete information. You don't *know* for sure that you have a 55% edge. It could be even more marginal. You could be a bit of a dog. It's plays in this area that get described as marginal and high variance.

I think a good example is b3b'ing a moderate combo draw. Against your average vaguely thinking table monkey your fold equity is through the roof, especially if you have a decent table image. But what about when we're faced by someone we suspect to be a calling station and we have a really bad image following a couple of bluffs and picked off cbets? Suddenly our fold equity shrivels up and we approach the marginal territory area. If he locks into calling station mode and just calls us down then this is no longer a decent edge.

[munkey]

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In many posts here, I see a lot of responses that include statements such as "that is high variance play" or "high variance, low EV" or some such, and almost always expressed in a context that implies that one should avoid situations like this, as in fold your cards and get out. This doesn't make any sense to me. As far as I can tell, you are a 1.001:1 favorite to win the hand you are still a favorite, and if you can get all of your chips in the middle with a caller, over the long run doing this will win money. Your swings will be huge, but you will also maximize your potential earnings.


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Interesting post and true over the long run whatever that may be. Some thoughts.

An interesting financial measure is recovery ratio which on a PokerPatterns type of graph would be the total $ winnings divied by the biggest drawdown[ peak to trough]. Anything below 1 shows anemic recovery from downswings.

I have to say I avoid some high variance possibly slight EV scenarios. Normally we can only allocate a range to villan so our range calculated equity or EV, obviously has an error bound else we're all be perfect hand reading poners. So we never really know if we're a 1.001:1 favorite or dog until after the monies are in.

Let's just assume we can estimate our equity edge+/-3% of our true equity - now alot of times we get our money in it will actually be -EV or +EV but in general our long term results from these type of marginal scenarios will be a function of how well we can estimate our range equity[fold equity too as we're often talking about combodraws] vs villan i.e our handreading skills in these marginal spots.

As eMC said RoR is important too, if variance wasn't an issue then why do global hedge funds spend mucha monies seeking to maximise their return whilst minimising their variance/risk?

[clearcut]

If you're scared get a dog. Fear does not exist in this dojo! haha good post

[munkey]

yes sensei [img]/images/graemlins/tongue.gif[/img]

[corsakh]

I think the issue here is not the variance itself, but the ratio of our bankroll to the size of the bet. If we had unlimited money there would be no issue.

Think of it as playing Russian roulette with a 100 slot gun. Stakes are 1 to 100 000.

Now imagine the gun is loaded with 49 bullets. Stakes are 1 to 1.

ps In my opinion, both options are stupid, but I am not a gambler [img]/images/graemlins/smile.gif[/img]

[4_2_it]

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The problem with this is that better players are going to be able to find margins where they are better than 55/45, and are 70/30, 60/40, 80/20.

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That is NOT the problem with this. Any time you don't take an edge in a cash game, you're throwing away money. Period.

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True. But folding when the EV situation is something like having to call 100 bbs when you are a slight dog, but the situation is +EV by 2bbs due to dead money. Folding there is a very small mistake that reduces variance and I really wouldn't fault a player who does this.

Almost all of us have much bigger leaks to fill that don't involve coin flip situations. Folding 88 pre-flop to a shove by a 44/20 isn't leak, it's more of a choice/preference.

[Genz]

OP is right in his mathematical sense that you should push every edge. But there is another point: bankroll management as an ulterior motive.
I'd assume that 100% of the uNL players do not intend to stay there. So one of the main goals for every uNL (and probably SNL) player is to grow his bankroll as fast as possible. Having huge swings because one pushes miniscule edges slows this process down a lot. That is why it is often wise to let these marginal situations pass and pick a more profitable one to achieve a greater ends.

And another thing: identifying spots where it is THAT close needs a lot of experience. That's something that most uNL players lack as well, due to the nature of the bankroll building process and them being newbies. So I think you can end up with a habit of taking lots of losing bets because you think you are pushing small edges. The edge over the opponents is so huge that you just don't NEED to take these chances in order to make a good profit.

BTW: I'm a NL-newbie myself so noone think I'm looking down on him as an inexperienced player, please.