Nano-limit and SnG Bankroll Question

[Jonsan]

I started a Pokerstars account with $50, and am playing .5/.10 LHE. So far I have only played about 500 hands, and I am about breaking even. I have also played about 10 SnGs (NLHE) ranging from $1 MTT, $5 STT, and $5 HU. I have made a decent profit from the SnGs. I enjoy NLHE, and the tournaments are a nice change of pace after playing LHE.

I read a blog entry by someone who did a decent bit of research and recommended 20-30 buy-ins for a SnG bankroll. I am wondering how I can determine my bankroll if I want to play LHE and NLH SnGs.

Any thoughts?

Thanks,
Jon

[jojobinks]

read the microlimit faq

[pzhon]

[ QUOTE ]

I read a blog entry by someone who did a decent bit of research and recommended 20-30 buy-ins for a SnG bankroll. I am wondering how I can determine my bankroll if I want to play LHE and NLH SnGs.


[/ QUOTE ]
It is not at all clear from what you have said that you are a winning player yet. Generally, it takes thousands of hands and hundreds of SNGs to verify that you are outplaying your opponents from the results. Bankrolls are something only winning players should worry about.

Once you are confident that you are winning at a decent rate, then you can use the 300 BB guideline for limit play and 20-30 buy-ins guideline for SNGs. If you play in particularly soft games and have a higher than normal win rate, you don't need quite as large of a bankroll.

A general formula to use across games is that your bankroll should be at least c*SD^2/Edge, where SD is standard deviation and c is a number that depends on your risk tolerance and ability to move down if you hit a streak of bad luck. Most people are comfortable using a value of c between 2 and 4. The SD for SNGs is roughly 1.7 buy-ins. The SD for LHE is roughly 15 BB/100 hands.

If you combine play in more than one type of game, your bankroll only needs to be sufficient for either. You don't need to have a separate bankroll for each game.

[AKQJ10]

[ QUOTE ]
A general formula to use across games is that your bankroll should be at least c*SD^2/Edge, where SD is standard deviation and c is a number that depends on your risk tolerance and ability to move down if you hit a streak of bad luck. Most people are comfortable using a value of c between 2 and 4. The SD for SNGs is roughly 1.7 buy-ins. The SD for LHE is roughly 15 BB/100 hands.


[/ QUOTE ] (Emphasis added)

That's very interesting -- I had wondered what sort of SD data was out there. My VERY small-sample observation at both Foxwoods $2/4 and $4/8 is a SD around 9 BB/hr, and B&M dealers only deal about 30 hands/hr so it makes sense it would be lower. It's not a linear relationship, though, so I'm not sure what 15 BB/100 hands would translate into. Anyone?

[Jonsan]

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It is not at all clear from what you have said that you are a winning player yet.

[/ QUOTE ]
I did not mean to imply that I was a winning player. From what I have read, I will need 5k-10k hands before I can determine with any accuracy if I am winning at my limit.

[ QUOTE ]
Generally, it takes thousands of hands and hundreds of SNGs to verify that you are outplaying your opponents from the results. Bankrolls are something only winning players should worry about.


[/ QUOTE ]
If I am understanding this correctly (and it seems fairly straight forward) you are saying that for the first few thousand hands and hundreds of SnGs, I should not concern myself with bankroll management? That goes contrary to what I have read elsewhere on this and many other forums. Could you elaborate on this point? Perhaps provide some examples regarding how a new player should manage their money while they determine if they are a winning player.

[ QUOTE ]

If you combine play in more than one type of game, your bankroll only needs to be sufficient for either. You don't need to have a separate bankroll for each game.

[/ QUOTE ]
I suppose this was really the answer to my question. I wasn't sure if bankrolls for different types of games could be combined.

Thanks!

Jon

[pzhon]

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[ QUOTE ]
The SD for LHE is roughly 15 BB/100 hands.


[/ QUOTE ]

That's very interesting -- I had wondered what sort of SD data was out there. My VERY small-sample observation at both Foxwoods $2/4 and $4/8 is a SD around 9 BB/hr, and B&M dealers only deal about 30 hands/hr so it makes sense it would be lower. It's not a linear relationship, though, so I'm not sure what 15 BB/100 hands would translate into. Anyone?

[/ QUOTE ]
The standard deviation scales by the squareroot of the number of hands played. 9 BB/30 hands corresponds to 9*sqrt(100/30) BB/100 hands ~ 16 BB/100.

I'd expect the standard deviation to be a bit higher in a B&M game, since those are often very loose, which increases the SD slightly, but it also depends on how aggressively you and your opponents play. Do they raise with KT in late position, then bet on an 883 flop? Do you check-raise from the blinds after defending with 22? Do you bluff when the turn is a 3, giving you the nut low? In many live games, the players are loose, but they rarely make any of these aggressive plays.

For online sites, PokerTracker tallies the SD for you under Ring Game Player Statistics: Session Notes: More Detail. It takes far fewer sessions to compute your SD accurately than your win rate, but I'm not sure how many it takes to get an accurate SD estimate.

[Zetack]

[ QUOTE ]
[ QUOTE ]

It is not at all clear from what you have said that you are a winning player yet.

[/ QUOTE ]
I did not mean to imply that I was a winning player. From what I have read, I will need 5k-10k hands before I can determine with any accuracy if I am winning at my limit.

[ QUOTE ]
Generally, it takes thousands of hands and hundreds of SNGs to verify that you are outplaying your opponents from the results. Bankrolls are something only winning players should worry about.


[/ QUOTE ]
If I am understanding this correctly (and it seems fairly straight forward) you are saying that for the first few thousand hands and hundreds of SnGs, I should not concern myself with bankroll management? That goes contrary to what I have read elsewhere on this and many other forums. Could you elaborate on this point? Perhaps provide some examples regarding how a new player should manage their money while they determine if they are a winning player.


[/ QUOTE ]

I think what he may be referencing is the concept that a losing player doesn't have a bankroll, because they constantly have to go into their pocket to continue playing. They may set aside money to play poker with, but it isn't a bankroll in the sense we think of it.

I, however, assume you are at least planning on being a winning player and so think you ought to try proper bankroll management. With the caveat that if you start of at the Nano's playing with the proper bankroll I wouldn't necessarily move down if my roll shrunk to the size (relatively speaking) that you would ordinarily move down if you were playing, say, 2/4, but would instead reach into my pocket for more money if I busted my roll.

I don't know what a proper bankroll for $5 s-n-g's is, but I'm pretty darn sure its not 50 bucks. Even if you are a winning player this is an amount with a very high likelihood of sending you reaching back into your pocket for more money.

--Zetack

[AKQJ10]

My interpretation is the same as Zetack's, namely that you should be playing at a level low enough that if you go down several hundred big bets or 100 (?) buy-ins, you won't be too broke to play poker for the rest of your life. (Not that you should ever be spending non-discretionary funds on poker, anyway.)

You can play as low as $.01/.02 I believe, for certain $.02/.04. In Sit-and-Gos I know there are some $0.50 ones. Yes, it feels silly to play an hour+ to win $2.50, but that's how you learn if you're as good as you think you are.

[pzhon]

[ QUOTE ]
[ QUOTE ]

It is not at all clear from what you have said that you are a winning player yet.

[/ QUOTE ]
I did not mean to imply that I was a winning player. From what I have read, I will need 5k-10k hands before I can determine with any accuracy if I am winning at my limit.

[/ QUOTE ]
In nanolimits, you should get an idea long before then. You should see that you are outplaying your opponents, perhaps because you are playing tightly and value-betting with good hands, while your opponents play garbage and call down with weak hands/weak draws, then don't bet or raise when they hit.

It takes a long time to determine your win rate only from the results, if you don't pay attention to how you won or lost. It saves a lot of time if you review the hands, and think about whether you and your opponents had the odds to call when you did, and whether you missed bets.

[ QUOTE ]
[ QUOTE ]
Generally, it takes thousands of hands and hundreds of SNGs to verify that you are outplaying your opponents from the results. Bankrolls are something only winning players should worry about.


[/ QUOTE ]
If I am understanding this correctly (and it seems fairly straight forward) you are saying that for the first few thousand hands and hundreds of SnGs, I should not concern myself with bankroll management? That goes contrary to what I have read elsewhere on this and many other forums.

[/ QUOTE ]
People have a tendency to oversimplify the assumptions needed for the 300 BB bankroll recommendation, and they repeat it out of context. While it is not a bad idea to point out to new players that poker involves a lot of swings, you should not be worried about the long-run risk of ruin of a solid winner with your bankroll when you don't know whether that describes you, either as a long-term player of that variant of poker or a solid winner.

Something else that is off-target for beginners is the assumption that your bankroll resembles your balance. Bankroll requirements assume you can't add any more money, which may be true for a professional poker player with no day job and a 5-figure bankroll. If losing your $50 deposit would annoy you, but you might deposit another $50 next month, then your actual bankroll is larger than your balance.

[ QUOTE ]
Could you elaborate on this point? Perhaps provide some examples regarding how a new player should manage their money while they determine if they are a winning player.

[/ QUOTE ]
If you don't know whether you are a winning player, you should view poker as an expense, or a potential expense. That doesn't mean it isn't a good expense! It can be worth a lot to take a shot at something and find out that you are a winning player, or to acquire the skills to become a winning player.

There is no right or wrong amount to spend. You don't need to have 300 BB or 20 buy-ins set aside to try something. If you want to try PL Omaha, you only need a buy-in or two, a couple of hours, and a sense of adventure. I decided I would burn up to $100 trying out PL Omaha. Although I'm still not comfortable with the game, I've won a lot, and found the fish to be much worse (or more confused) than in Hold'em. $100 is not an adequate bankroll to play PLO $50, but it was enough to take a shot at the game.

If you want to be able to handle the downswings for a long test period, though, you might need more than is recommended as a bankroll for a solid winner. One method is to assume you are a break-even player, and set a stop-loss of 2 or 3 standard deviations for a trial period. If you hit your stop-loss, you have strong evidence that you are not yet a winning player. If you double up within the time period, you have strong evidence that you are a winning player. (The standard deviation for n hands of LHE is about 1.5 squareroot(n) big bets. The standard deviation for n SNGs is about 1.7 sqrt(n) buy-ins.) If you set the length of the test period long enough, there is a good chance that you will resolve the issue one way or the other.

The amount you need for a long test period may exceed the bankrolls recommended for solid winners. That's natural. Someone with a ROI of 40% in SNGs (easily doable in the PokerStars $5+0.50 SNGs) needs only about one quarter of the bankroll of someone with a ROI of 10% to feel as safe. The bankroll requirements for solid winners may be insufficient to give a good test for whether you are a marginal winner versus a marginal loser.

[ QUOTE ]
[ QUOTE ]

If you combine play in more than one type of game, your bankroll only needs to be sufficient for either. You don't need to have a separate bankroll for each game.

[/ QUOTE ]
I suppose this was really the answer to my question. I wasn't sure if bankrolls for different types of games could be combined.

Thanks!

[/ QUOTE ]
You are welcome.

It's similar to the fact that you don't need a larger bankroll to multitable if you win at the same rate on each table. Also, financial partners can share a bankroll.

[pzhon]

[ QUOTE ]
I don't know what a proper bankroll for $5 s-n-g's is, but I'm pretty darn sure its not 50 bucks. Even if you are a winning player this is an amount with a very high likelihood of sending you reaching back into your pocket for more money.

[/ QUOTE ]
Suppose your ROI is 40%, which is not unreasonable for the very soft PokerStars $5+0.50 SNGs with slow blind increases and 1500 starting stacks. Playing with $50 is roughly as dangerous as playing LHE as a 2 BB/100 winner with a bankroll of 140 BB. It's dangerous, but not shockingly so.

The risk of ruin (http://archiveserver.twoplustwo.com/showflat.php?Cat=&Number=207100&page=&view=&sb=5&o =&fpart=all&vc=1) is roughly exp(-2 bankroll * edge / (SD^2)) = 8%. If your ROI is only 20%, it is like you are playing LHE with a 70 BB bankroll, and your risk of ruin is much higher, 28%.