Diff b/t ROI + ROR???
 

From what I have been told ROI is Return on Investment. What is ROR and how is it calculated?

Re: Diff b/t ROI + ROR???
 

RoR = Risk of ruin. It has very little to do with ROI, it is a function of your profit/tourney, standard deviation on profit/tourney, and bankroll. It's equal to

P = profit/tourney
B = bankroll
S = standard deviation

Then RoR = e^(-2PB/(S^2)).

Re: Diff b/t ROI + ROR???
 

Risk of Ruin

R=EXP(-2HB/S^2)

where:

R=Risk of Ruin
B=Bankroll
S=Standard deviation/tourney (or per hour in ring games)
H=Win rate. Avg profit/tourney (or hourly rate in ring games)

B=-(S^2/2H)LN(R)

is to determine bankroll requirements for a given risk of ruin

Regards
Brad S

Re: Diff b/t ROI + ROR???
 

Then on to asking another beginner question...

What is used to calculate the standard deviation? I know how to work with standard deviation from college stats class, but what poker results and numbers are used?

Re: Diff b/t ROI + ROR???
 

For a typical sng paying three spots, SD is calculated as follows:

SD=SQRT((Probability of 1st)(net profit for 1st)+(Probability of 2nd)(net profit for 2nd)+(probability of 3rd)(net profit for 3rd)+(probability of finishing out of the money)(net loss)+(avg profit/tourney^2))

Regards
Brad S

Re: Diff b/t ROI + ROR???
 

oops, looking at that again, I realized I made an error

it should read:

SD=SQRT((Probability of 1st)(net profit for 1st^2)+(Probability of 2nd)(net profit for 2nd^2)+(probability of 3rd)(net profit for 3rd^2)+(probability of finishing out of the money)(net loss^2)+(avg profit/tourney^2))

Sorry about that
Brad S