Irrefutable Southern Logic - It Can Always Get Worse

Variance and downswings are a natural and frightening part of poker. We have all complained about running bad, but as I’m learning with each passing day right now, it can always get worse. In this column we’ll discuss the ugly side of variance, try to understand it, and how best to cope with it.

If you’ve never played with a variance simulator online, I highly recommend doing so. The results will shock you. I’m nearly through my second straight losing year, pulling off one winning month in the past twenty, and it turns out that this isn’t that uncommon.

Running simulations for a full-time live cash-game pro with solid win rates and standard deviations reveal scary results. I ran 1,000 simulations for limit hold’em with win rates of six big blinds per 100 hands and a standard deviation of 50 big blinds (BBs) per 100 hands. All thousand players expect to win 3,000 big blinds over the course of a full time year (50,000 hands). The luckiest of the identical players wins 8,000 blinds, and the unluckiest sap loses almost 1,000 blinds that year. The largest downswing over those thousand simulations is 1,811 BBs. That’s over 900 big bets! Twenty percent of those year-long simulations experienced a downswing of 800 BBs… just that year!

No-limit hold’em generally yields less variance than limit games, due to higher win rates. Even though standard deviations are greater, since the probability of losing three stacks in an hour is much greater in no-limit than it is in limit, no-limit players consistently have higher win rates in the terms of big blinds per 100 hands. Simulating for winning live no-limit hold’em players, given win rates of 15 BBs per 100 hands and a standard deviation of 100 BBs per 100, swings are scarier, but things turn out okay after enough hands that year. The average winning player expects to earn 7,500 big blinds. One wins over 14,000 BBs, another barely turns a profit. One of them experiences a downswing of 4,010 blinds…forty buy-ins! Twenty-percent of them experience a downswing of 1,500 BBs…each year.

So how then do we best respond to a downswing?

1. Move down in stakes

The first thing that jumps out at me is that we’re all under-rolled. We take shots too much, consciously or ignorantly, but nonetheless greatly increasing our risk of ruin. These simulations just cover bread and butter, and don’t even begin to factor in things like playing bigger, where win rates decrease in BBs/100 and standard deviations increase. The lower the win rate and the higher the standard deviation, the crazier the swings are going to be. And there isn’t a darn thing we can do about it besides accept and live with it.

Moving down in stakes will likely correct the deficiency in bankroll most of us already have. If a big loss in one session hurts your bankroll, then you’re playing too big. It will increase our win rate in terms of BB/100 even though we’ll make less money per hour. A higher win rate makes winning sessions more likely, and winning sessions are essential to confidence. Moving down in stakes lets us focus more on our fundamentals, allows us to be less concerned with the money attached to losses, and eliminates worry about advanced opponents.

I’ve heard struggling players say something like, “I can’t beat small stakes, too many people chase,” many times over the years. Or, “I only like playing against decent opponents that I can put on a hand and that I can get to fold.” These thoughts are just plain wrong. Bad players lose more money, and if you’re sitting at the table then you have a chance to get it. How much money do you think you’re going to be able to squeeze out of somebody that doesn’t lose money? Stop trying to get people to fold that don’t fold and then you can beat players that don’t fold.

2. Ignore short term results

Winning heaps in a year does not a winning player make. Running simulations for 1,000 part-time losing players at minus 10BBs per 100 hands, a standard deviation of 100BB/100 hands, and 25,000 hands, we get one player that wins 3,000 big blinds that year. There are hundreds of others who make money that year too. All this means is that they made money playing poker this year, not that they are winning poker players, just like somebody who is a lifetime winner at craps is not a winning craps player.

Instead we must focus on ourselves, figuring out aspects of our games that are holding back win rates. As win rates increase, so do our winning sessions and confidence levels. When you put money into the pot, do you usually have the best hand or the worst hand? Are you getting value from your marginal hands or are you checking instead, happy to win the smaller pot? Are you folding when you should, or do you pay off and then complain about a bad beat?

3. Have something else in life

I’m neck deep in my fourth and greatest downswing of my decade-long professional career. I have won one out of the past 21 months, losing money on my 2012 tax returns, and losing every single month of 2013. By the end of 2012 it was approaching my worst downswing ever, so I moved way down in stakes, from $400-$800 to $30-$60, putting myself in the best game I knew of. In ten soul-crushing months since, I’ve had very few winning days, and have only been ahead for the month for about seven days this entire year. It has been extremely rattling both emotionally and financially, and I’m learning very clearly that things can always get worse. This weekend I moved down in stakes again and was rewarded with four straight losing days.

If I didn’t have other things going on in life, I would be on suicide watch. If poker was all I did, it would be really easy to fall into a deep, dark, depression, figuring everything to be pointless during one of these brutal downswings.

If poker’s a hobby for you, then don’t play when it isn’t fun. And if poker is your job, then treat is as such, and do something else besides work. If you’re unhappy in your job, then you’re in the wrong job. ♠

Bryan Devonshire has been a professional poker player for nearly a decade. With more than $2 million in tournament earnings, he also plays high stakes mixed games against the best players in the world. Follow him on Twitter @devopoker.