VARIANCE THE SILENT KILLER
You are about to start playing your favourite form of poker which just happens to be limit Texas hold’em. You have read all of the books countless times and you know the game inside out and can sure show those dummies on the internet a thing or two. You intend on playing at a fair level and are looking to start in the $20-$40 game on your favourite site. You have what is considered to be an adequate bankroll by many leading experts and mathematicians and the prospect of earning an income from poker is exciting you as is the thought of possibly turning professional.
Your first session goes very well indeed and you win over a thousand dollars and your second session is almost as profitable…..life could not be sweeter! Suddenly after a couple of winning sessions, you have your first losing session, followed by another and another and another. You started off with a 300 big bet bankroll of $12,000 but find that your entire winnings have evaporated and with it 150 big bets of your original bankroll.
You try to look for reasons for it and cannot find any. The beats have been cruel and constant, you are in there with the best hand and you have lost count of the number of times that you have been outdrawn….how in heavens name can this continue you ask yourself? You find yourself getting frustrated and agitated and even angry and you want an explanation for all this but no one is there to help you.
You are $6000 in the hole and conclude that limit hold’em cannot be working for you so you take your remaining $6000 and play heads up at $50-$100 No Limit Texas hold’em as you figured that you know this game well enough to beat it and that you could get the money back that you lost playing $20-$40 limit in a fraction of the time.
Less than three hours later and the screen prompt is informing you if you would like to buy back in as you are out of funds. How have you lost this money on this table? The answer is academic and you know it because you should not have been on this table anyway. But why were you on this table in the first place? You may say that you tilted at the thought of being $6000 in the hole at $20-$40 limit, you may also say that you tilted at the brutal outdraws time after time and that many players played as if they had taken leave of their senses….either that or they knew what the cards were, a subject you have seen discussed on several forums and there is no smoke without fire….right!
I have heard tales like this countless times although not always for these amounts of money. But the subject of adequate bankroll sizes is a very complex and difficult subject because depending on individual ability then what constitutes an adequate bankroll for one player may be totally inadequate for someone else. Even two players of identical ability may need different size bankrolls to avoid going broke depending on what types of games they were playing in and against whom.
Fine, you may say that the guy should not have tilted and you would be correct! You may also say that he should not have switched to playing no limit and you would also have been correct! You might have figured that playing heads up was another mistake and I would have to agree again. On top of that, any fool would see that $6000 at $50-$100 heads up no limit hold’em is a totally inadequate amount of money.
Plus, just what sort of player do you think is going to be sitting on that heads up table waiting for their opponent. You started off playing $20-$40 limit hold’em against a few students and recreational players and ended up playing heads up at $50-$100 no limit hold’em against one of the best players in the world who just happened to be a two time World Series of Poker bracelet winner and yes they are out there waiting for you online believe me!
But at the very core of this problem, we have to look at the reason why you tilted in the first place and it was not entirely to do with the fact that you lost was it? At the very heart of this problem is the fact that you dipped 150 big bets and could not understand how this could possibly have happened. The fact of the matter is that the experts and the mathematicians told you that you needed a 300 big bet bankroll and they did not say that for nothing now did they?
You need a bankroll for a reason and that reason is so that you can withstand the variance in the game. But it is because of this ignorance to what can actually happen to you and the range of just what can happen that leads players to tilting most of the time. The fluctuations in poker even for successful winning players can be brutal even at the best of times and in this way, a game like limit hold’em is not too dissimilar to a game like blackjack.
But stating that it is like blackjack with regards to the level of variance is hardly going to help a player if they do not understand just what the variance is like in blackjack either. But I played blackjack professionally for four years prior to playing poker and one of the best things to come out of that experience for me personally was that it really toughened me up mentally to be able to handle this very important and yet often over looked part of not just poker but gambling in general.
But it is this ignorance of “just how bad can bad get” that leads many players to either tilt their money away or pack the game in through fear of possibly losing all their money. Sooner or later, all good players will hit a really horrible bad run. Mine happened after about six weeks but because I’d had six weeks of success then it made me far more resilient to handle a bad two week run. For new players, it is always better to hit that horrendous run after you have had a period of success because you have already built up your confidence that you can in fact make the game pay.
But the potential problems arise when you hit this bad run straight away or very early on in your career. It is at this stage where you are still emotionally and psychologically at your most fragile because you have yet to achieve the results that will install confidence into you to continue through the bad times without it affecting your game or panic you into packing it in.
I cannot even begin to put a figure on just how many players must have been affected like this down the years. I sometimes wonder just how many potentially successful players and even budding professionals and World class stars have fell by the wayside all because they got off to a horrendous start very early in their poker life and packed it in because they thought that they were not good enough.
But this is a very serious obstacle to overcome because who is there to tell you that this initial bad run is just the variance of the game doing its thing and not because you lack the skills. It is because there is so much luck in poker that leads many people who are not connected to the game to conclude that the game is based entirely on luck and that trying to make a living out of it long term is an exercise in futility.
A successful professional player at a game like limit hold’em for instance will quite often achieve a rate of return somewhere in the region of about 2% on total turnover. This 2% edge is all that stands between a highly successful middle limit player from merely breaking even and recycling money and failing to make the game pay. Let us take a closer look at that figure of 2% and put it into some kind of context for a minute.
Let us say that we knew that calling heads in a con flip would earn us money because there was some kind of bias on the coin that meant that heads arrived at a rate of 51% to 49% tails. This means that if we were to bet £1 on the outcome of 100 coin flips that we would win 51 and lose 49 out of every 100 flips on average thus winning £2 out of every £100 wagered (2%). This result is created by having just ONE flip go our way and not to the other player. Take that one flip away and we would be breaking even….that is how close it really is in reality.
A sobering thought for many players is that this is actually what a VERY GOOD player has to endure so what price lesser players. To quote another analogy that also indicates just how fragile a winning players edge actually is can be seen in the game of roulette with a single zero wheel. If a player places a bet on even chances then they are labouring under a 1.35% house edge. That’s right, if you stick to playing even chance bets on roulette then the houses only edge against you is that one solitary number (zero) in the wheel.
Take zero out of the wheel and it is a 50-50 proposition but placing zero in that wheel gives the house an edge of 1.35%. The edge would be 2.7% if the player bet on the numbers but this is reduced on even chance bets as the player gets half the wager back in the event of zero arriving. This little analogy should help to underline just how slim a good poker players edge actually is. It is for this reason that you really should not play whenever conditions are not optimal.
You will have read and heard many times that you should not play when you are tired or disturbed for any reason or if a particular table is quite tough with good players inhabiting it. Game conditions and your own mental and physical state can seriously impede your chances of winning money and you cannot afford to allow this to happen because your edge is not as great as what you think it is.
This is why many players gripe about losses and bad beats. Poker being what it is, most players over estimate their own ability and seem quite shocked when what they expected to happen (winning) does not happen. The amount of luck in poker is absolutely massive and I do mean MASSIVE. Luck is by far the most important factor in the game over the short term and luck actually dictates your results to a large extent rather than skill. Put another way, the standard deviation is providing your results in the short term and not your ability.
The situation is a damn site worse for the “deluded expert”. You know who I am talking about here and heaven forbid that I could easily be talking about you. The guy has read countless books and feels that he really knows the game inside out. He has made money playing at low limits in the past but suddenly the games have got a whole lot tougher and unknown to him whatever edge he had previously has just evaporated. What this means is that whenever your edge is reduced then your fluctuations are greater thus you need a bigger bankroll to ensure survival.
With the poker boom in full swing and poker being such big news then the number of players who fantasise and have ambitions of playing poker for a living have grown alarmingly. But many players are making gross errors by jumping into playing poker full time without first proving that they can in fact beat the game in the long term. The standard deviation in poker can create illusions and mirages that trap the unwary and the inexperienced. It has happened to many players in the past and will happen to many more in the future.
One piece of advice that I would say to any player who had ambitions of turning professional would be this. Do not give up the day job until you are categorically 100% sure that you can in fact make the game pay and think twice even then!
This article was written for the World Poker Tour magazine and has been reproduced here with their kind permission.
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