Please change the FAQ on bankroll requirements.

[djg]

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.

[pzhon]

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

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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.

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


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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.

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

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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.

[FishSticks]

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.

[pzhon]

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A bankroll of like 10 buyins is ridiculous.

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

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

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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.

[Rainclouds]

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.

[Jamougha]

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.

[4_2_it]

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.

[FishSticks]

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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.

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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.

[Ajahn]

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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.

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[bi11 frist]

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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.

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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.