Why SNGs have MORE variance than ring games

AleoMagus · #1 08-17-2005, 05:54 AM

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

Jman28 · #2 08-17-2005, 05:56 AM

Great post Aleo. Thank you.

brimstone1 · #3 08-17-2005, 06:32 AM

Bookmarked to use as a reference in the future, great post, thanks.

TheNoodleMan · #4 08-17-2005, 08:17 AM

I think this is overly simplistic. Many SNG players with smaller ROIs (10% and under) achieve their results via weak bubble play and limping into 3rd, which greatly reduces their varience.

AleoMagus · #5 08-17-2005, 09:04 AM

[ QUOTE ]
I think this is overly simplistic. Many SNG players with smaller ROIs (10% and under) achieve their results via weak bubble play and limping into 3rd, which greatly reduces their varience

[/ QUOTE ]

Yes, players who squeak ITM a lot will have lower variance but actually not by much at all

Just as an example, consider the following two $11 SNG players, with a 1000 game sample

Player A
1st 175
2nd 125
3rd 75

Player B
1st 75
2nd 125
3rd 250

Player A is agressive and only has an ITM of 37.5% but has a solid ROI of 27.27%. His SD is $19.60/t or, about 1.78 buy-ins

Player B is gets ITM more often with an ITM of 45% but has a weak ROI of only 13.64%. His SD is somewhat lower thanks to his style of play, at only $15.61/t, or about 1.42 buy-ins.

So yeah, I guess player B has a lower variance, but who is going to feel a 1 SD downswing more:

Player A, who would be down 19.60 from his usual profit of $3?

or Player B, who would be down 15.61 from his usual profit of $1.50?

It will take player A, on average, another 5-6 tourneys to recover from this

It will take player B, on average, another 9-10 tourneys to recover

Keep in mind also, that these two example players are pretty extreme in my opinion.

What it really comes down to is that your Standard deviation is not as important as your Standard deviation divided by profit

Regards
Brad S

citanul · #6 08-17-2005, 11:25 AM

Thank you for posting this.

I was much much much too sleepy to type all this up in the other thread last night and had to leave it just at the "I've been meaning to say."

And now, hopefully people will be less resentful when I say things like "I think if you're going to be going for these games and a 10% ROI, you should just not play them."

citanul

gumpzilla · #7 08-17-2005, 11:33 AM

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And now, hopefully people will be less resentful when I say things like "I think if you're going to be going for these games and a 10% ROI, you should just not play them."

[/ QUOTE ]

At every buy-in, or just the lower ones?

I don't think you literally mean your last sentence, but I'll disagree with it anyway. It's worth considering that the dilemma that Aleo sets up assumes that you have a very good ring game player who is good but not great at SNGs. I think it's more likely that you'll find somebody who is mediocre all around. There are also non-monetary reasons (gasp!) that people might prefer tournaments, and if the earn is even remotely similar that might be enough to swing them.

eastbay · #8 08-17-2005, 11:41 AM

[ QUOTE ]
"I think if you're going to be going for these games and a 10% ROI, you should just not play them."

[/ QUOTE ]

I don't know. People seem to do ok counting BJ for a 1% edge or less.

eastbay

Myst · #9 08-17-2005, 11:42 AM

[ QUOTE ]
[ QUOTE ]
"I think if you're going to be going for these games and a 10% ROI, you should just not play them."

[/ QUOTE ]

I don't know. People seem to do ok counting BJ for a 1% edge or less.

eastbay

[/ QUOTE ]

Yeah, my ROI right now is around that measly 10% at the 55s, and I just made about 3k in the past 10 days from that game.

Should I stop playing them citanul?

No of course not. An edge is an edge, and as long as you have an appropriate bankroll, then you should exploit it.

citanul · #10 08-17-2005, 11:45 AM

[ QUOTE ]
Yeah, my ROI right now is around that measly 10% at the 55s, and I just made about 3k in the past 10 days from that game.

Should I stop playing them citanul?

[/ QUOTE ]

Jesus Christ, surely you must realize the immense stupidity of your post.

I'm very glad that you either a) ran hot or b) played a lot of sngs and all but...

You clearly don't even care what my reasons are for saying what I said, you just want to be a jackass. Meh.

citanul