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Old 07-28-2005, 04:11 PM
Slim Pickens Slim Pickens is offline
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Join Date: Jan 2005
Location: Las Vegas, NV
Posts: 786
Default Re: Simulation of Floating bankroll needed

Here's AleoMagus' response from the other thread.
[ QUOTE ]
The actual calculations to determine a specific bankroll requirement or a specific ROR are:

B=-(SD^2/2W)LN(R)

r=EXP(-2WB/SD^2)

where,
W is your average profit per tourney ($)
SD is your standard deviation per tournament ($)
R is your desired risk of ruin
B is your bankroll ($)

These calculations assume that a player will continue to play at a certain level, and will not cash out profits. This is, of course, a foolish assumption. In reality, we will sometimes cash out profits, and we will sometimes move up or down in stakes.

Assuming we want a 1% ROR, and we have a SD of 1.7 buy-ins, this looks something like this:

ROI - Buy-ins required

5% - 133.1
10% - 66.5
15% - 44.4
20% - 33.3
25% - 26.6
30% - 22.2
35% - 19.0

Really, the old 30 buy-in rule comes from smaller buy-in players who can get 25%+ ROI. All the higher limit players then notoriously chime in that 30 is way too little. This is obviously just because at the limits they play they are far more likely to get 5-10% ROI and thus, require a lot more.

[/ QUOTE ]

By changing the distribution, you're changing SD. That's all.

...and don't make me flame you about the distribution, sample size, and so on.
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