Swings and Bigger Swings

I was working some stuff out on a spreadsheet yesterday and came up with a good example of how much bigger the luck factor in poker is than most people believe. As I mentioned below somewhere, I have put a few hours in on a particular type of Sit and Go over the last few months, this being the $25 Turbo No Limit Sit and Go on Pokerstars. My year to date results in this particular game are played 85, net $1,216. So my expectation for one of these Sit and Goes is just over $14, right ?

Well maybe. We don't know yet. All we can say at the moment is that there is a 95% chance that my rate is between $4 and $24 ! How I work this out is probably for another day, but it is all derived from estimating the standard deviation.

Having said that, these sit and goes are subject to much smaller swings than multi-table tournaments. If my rate really is $14 per game, the I am very unlikely to suffer a downswing of more than about $700. If I play 1000 of them (an awful lot, but doable in a year if I put my mind to it), the 95% confidence band is $11K-$17K. That is, there is only a 2.5% chance I would make less than $11K.

All this is highly dependent on exactly what my rate is, but for the moment I am encouraged by the fact that my rate is not "set in stone" at $14 and could be higher, especially if I try hard to improve it.

At some point I will try to make similar estimates for MTTs, which could prove very interesting indeed !