Why SNGs have MORE variance than ring games
Wait... What's that?! MORE variance? huh?
Has aleo lost his mind? Isn't he always saying that they have less variance?
Well, yeah... I have often said that, but I'll tell you why I (sometimes) am actually wrong about that, and why the notion persists, even correctly, that SNGs have more variance.
Because when we look at variance, it really doesn't mean much until we compare it to other things, like our profit, and our Bankroll.
So yeah, if you are one of the good small buy-in players on this forum, with an ROI of 25%, and have limited experience in ring games, then of course SNGs have less variance.
Before I go any further, I'll make one quick assumption about variance. I'll say that in NLHE SNGs, your standard deviation will be about 1.7 buy ins, and I'll assume that in limit HE ring games, your variance is about 16 BB/100.
ok, so what does that mean...
if you are playing ring games with a profit of 1BB/100, then your SD will be roughly 15x your profit/100.
Compare this to a SNG player who has an ROI of 25%. If this player is buying into $11 tourneys, this means his SD is about $18.5/tourney and his profit is $2.75/tourney. His SD/t is only 6.7x his profit/t.
Ok, so what am I talking about here? Didn't I just show that SNGs have less variance (for the thousandth time)
Well, yeah, but this is not always the case. Some players are really good at ring games and suck at SNGs
consider a different situation...
You make 2.5 BB/100 in your ring games and only a 10% ROI in your SNGs
Now it would seem that your SD/100 is only about 6 times as big as your profit/100 (assuming that SD is about the same, which it easily could be)
But, your SNG SD/t is now 16 times as big as your profit/t
...
Anyways, whether you like my assumptions about SD, or my examples, the bottom line is that if you want to know what has more variance, one of the most important factors is how skilled you are at each kind of poker. Well, not exactly, but at least our PERCEPTION of variance will have a lot to do with how much money we are making in relation to the size of swings that we can take.
If you are a small ROI earner, then ring games might have less variance if you are good at them.
Regards
Brad S
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