Even More Fun with Spreadsheets
Thanks to Dan who sent me the following comment on my recent bankroll post :
"The $500 bankroll for $30 (50/30/20) SnG tournaments seems too low. The session risk is the buy in ($30+3) implying session risk equal to huge 6.6 percent of bankroll ... would not Kelly imply a larger bankroll (around $1700) so session risk says closer to 2%? I realize bankroll is a function of edge under Kelly; even so 6.6% session risk seems very "lively" to me. "
I promised to go and look up the Kelly criterion as it applies to this case and I will. In a bit :-). I'm not entirely sure how the theory applies to Sit and Goes, particularly in small samples. There are only 4 basic outcomes (if three places are paid). What I did was to fill in probabilities of each finishing position and give it a good old Monte Carlo spin. The figures I plugged in are as follows :
P(1st) = 18%
P(2nd) = 15%
P(3rd) = 21%
which equate to an edge of just under $15 for a $30 Sit and Go (after the rake), and I'm figuring to play 2 of these per hour by playing two at once, usually overlapping, by which I mean starting the second game when the first is half way through. Anyway, when you give these a spin over 20,000 trials, the maximum downside does vary a bit, but it's almost always between $400-$600. It's not a rigorous bankroll definition but it's probably close enough.
Dan went on to add "I suspect a decent living can be made multi-tabling $200 SnG for 5-6 hours a day if approached carefully with respect to session risk." I would suspect a lot more than decent if you're good enough, although that's much too high for my taste. The real import of my figures below is how they compare to each other. There is no doubt in my mind that if tournaments are your bag, Sit and Goes are by far the best bet on-line. The simple fact that you can play so many more of them in the same time elevates them high above multi-tables in terms of hourly value, and they are subject to a much smaller variance. Cash games I wouldn't know, but I'm sure that the required bankroll for any cash game where you expect to make $30/hour is much higher than $500 !
"The $500 bankroll for $30 (50/30/20) SnG tournaments seems too low. The session risk is the buy in ($30+3) implying session risk equal to huge 6.6 percent of bankroll ... would not Kelly imply a larger bankroll (around $1700) so session risk says closer to 2%? I realize bankroll is a function of edge under Kelly; even so 6.6% session risk seems very "lively" to me. "
I promised to go and look up the Kelly criterion as it applies to this case and I will. In a bit :-). I'm not entirely sure how the theory applies to Sit and Goes, particularly in small samples. There are only 4 basic outcomes (if three places are paid). What I did was to fill in probabilities of each finishing position and give it a good old Monte Carlo spin. The figures I plugged in are as follows :
P(1st) = 18%
P(2nd) = 15%
P(3rd) = 21%
which equate to an edge of just under $15 for a $30 Sit and Go (after the rake), and I'm figuring to play 2 of these per hour by playing two at once, usually overlapping, by which I mean starting the second game when the first is half way through. Anyway, when you give these a spin over 20,000 trials, the maximum downside does vary a bit, but it's almost always between $400-$600. It's not a rigorous bankroll definition but it's probably close enough.
Dan went on to add "I suspect a decent living can be made multi-tabling $200 SnG for 5-6 hours a day if approached carefully with respect to session risk." I would suspect a lot more than decent if you're good enough, although that's much too high for my taste. The real import of my figures below is how they compare to each other. There is no doubt in my mind that if tournaments are your bag, Sit and Goes are by far the best bet on-line. The simple fact that you can play so many more of them in the same time elevates them high above multi-tables in terms of hourly value, and they are subject to a much smaller variance. Cash games I wouldn't know, but I'm sure that the required bankroll for any cash game where you expect to make $30/hour is much higher than $500 !
3 Comments:
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Butch,
I see what you're saying - but I think you could say the same of any theoretical bankroll requirement. Any time your roll is below the requirement, you are in jeopardy of going broke, independent of whether you started with enough before a losing streak.
But perhaps we're only quibbling over definitions. As I said, what's really interesting is the comparison of the figures for different games.
Regarding cash games you may well be right - if you play them regularly then you're in a much better position to comment than me.
Thanks for taking the time to post,
Andy.
I may come back to your bankroll points when I have more time - then again, this isn't a forum where anyone has to have the last word or "win" the argument. I'm happy for people to read all the comments and make up their own minds.
As for stars, I was going to say "Small world" when I thought is it really that small or is someone pretending to be me ? I really hope not. Not out of a sense of outrage but a sense of unease - it would be like having a stalker ! Anyway it isn't me.
Andy.
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