Roy Cooke article in Card Player is wrong.

[Posty123]

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Tipping and varience have nothing to do with each other. All tipping does is increase overhead, so tips might turn a 2 bb/100 winner with an SD of 16 into a 1.5 bb/100 winner with an SD of........sixteen.

Think about it this way...if you decided to tip $100 for every pot you won in a $1/$2 game, you would not have very large swings (it will not all the suddon become possible to win two grand in a night). You would just go broke very quickly as your winrate (after tips) would predict.

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If you were a .001 bb/100 winner would that increase your variance? Does taking it to the extreme in this way illustrate how your example shows how you are incorrect in your analysis.

I've never had a downswing bigger then 150BB either. I don't understand why that is hard to swallow for some people. I posted my winrate in an earlier thread and most people thought i was making it up. I have not read the article in question but I haven't played b&m either so I couldn't compare the two. 200 to 300 BB's seems like a safe number to start at at the small stakes tables if you are a decent player. Probably less for good players.

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If you were a .001 bb/100 winner would that increase your variance?

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If you tipped .001bb/100 you would have zero variance. You would always break even. As long as you always tip at the same rate your variance will remain the same.

[SinCityGuy]

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I've never had a downswing bigger then 150BB either.

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150BB is a bit low for online play. You'll have one worse than that at some point if you keep playing. At the other extreme, the 500, 600, 700BB downswings that some of the lagtards in the HUSH forum go through are a product of their own recklessness.

[Mason Malmuth]

Hi Posty:

The only way Cooke would know this is based on his own personal experience. It may also mean that his online win rate isn't as high per hand as his cardroom win rate is since required bankroll has something to do with the relationship between your win rate and standard deviation.

Another thing to consider is that bankroll is proportional to your standard deviation squared. So if your short term swings go up only 23 percent and your win rate per hand stays the same, that's enough to increase your required bankroll 50 percent. If your swings go up less than that, but your win rate also drops a little, that could also be equivalent to the 50 percent increase.

For reasons that I won't get into here, I would suspect that his online winrate per hand would be a little lower and his standard deviation would be a little higher. So his estimate of a 50 percent increase in required bankroll seems reasonable to me.

Best wishes,
mason

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Hi Posty:


if your short term swings go up only 23 percent and your win rate per hand stays the same, that's enough to increase your required bankroll 50 percent.





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I'm assuming the fact that you can play 10 times as many hands an hour negates the effect of the short term variance. This is probably something cooke did not take into account if this is why he thinks a 50 percent increase in bankroll is necessary. Maybe I'm wrong, half of this post was over my head after all.

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150BB is a bit low for online play. You'll have one worse than that at some point if you keep playing.

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I will be very surprised if this happens. Alot of posts are made on variance and winrate, and the sample size needed to assess them. I think this is less of an issue at smaller stakes, and that most of these posters are mid stake players or higher. Dead money mitigates long term variance and thusly mitigates the need for bigger sample sizes to assess variance, winrate, ect...

[Mason Malmuth]

Hi betadecay:

No. The number of hands you play in some period of time has nothing to do with required bankroll.

best wishes,
Mason

[timprov]

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Hi betadecay:

No. The number of hands you play in some period of time has nothing to do with required bankroll.

best wishes,
Mason

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The total number of hands you intend to play certainly does, though. So if you're playing the same hours live vs. online you need to take the greater hand/hour rate into account.

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Hi betadecay:

No. The number of hands you play in some period of time has nothing to do with required bankroll.

best wishes,
Mason

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I understand that it has nothing to do with playing consecutive hands, but what about concurrent hands. Will this affect bankroll requirement? Won't variance drop significantly if you concurrently play 2000 hands on 5 tables, then if you play 10,000 hands on one. Wouldn't this mean you no longer need as big a buffer for the variance, so a smaller bankroll would suffice. Again, I am not sure what the definition of "required bankroll" is, and I am not a mathmetician.

The fact that you need to drop in stakes from a B&M room to online games call for a much smaller bankroll anyways.