Variance gets worse the better you get l Strategy with Barry
I have been going on a very deep dive into the topic of variance and how to understand it. I think most poker players should. While I am not a poker coach myself, I have worked with a number of coaches on various projects. What I see time and time again is their students using them not only as a resource for getting better, but also as a sounding board to rant about variance.
The ability to tolerate long periods of negative variance is what separates elite players from everyone else. I am very much a winning player, but I would never make it as a professional player because I don't think I have the fortitude to tolerate a downswing if poker was my primary form of income.
And this is one of the harshest lessons of all. The better you get at poker, the more likely you are to go on downswings.
The swings moving up stakes
Now, this isn't the case if you stay at the same stakes. In fact, I've written at length before about one of the great online poker professionals, Aaron Barone, who has argued that most players would be much more successful if they stayed at or dropped their stakes.
If you stay at the same stakes and continue to improve as a player, you will suffer fewer downswings. I know this personally. I am a bankroll nit and only like to play in games I know that I can beat. As a result, the only time I take shots at higher stakes is when I win a satellite (which is actually, often). While downswings are unavoidable, I've found that my downswings have gotten much shorter as I have improved and played largely the same games.
But most successful players, and certainly most professional players, will have an eye on moving up in stakes. This invariably means that they will play against better players. As a result, their ROI will decrease, although their actual cash money win rate maybe should increase. The lower your ROI, the more extreme your downswings will be.
Take this example from the superb free resource, the tournament variance calculator from PrimeDope.
Here I have simulated 1,000 tournaments for a $10 grinder with a 20% ROI. Thousands of simulations were done, and what you can see there is the medium run of profit (that's the blue line), as well as the drawdowns from the peak profits (that's the pink line). It's the pink line we are looking at. This is a visual representation of how long a downswing went on after previously being at a peak.
It's pretty good. Our grinder made around $2,000 in that time. Now let's look at what happens when this player moves up to $20 MTTs. There will be more tough regs at these stakes, so we can't possibly expect them to win a 20% ROI yet. Let's assume that ROI is 12%. That's enough to make the move up in stakes worth it to them. Our hypothetical grinder made more money in this simulation.
But look at how much more pink we see. Visually, what we are seeing here is that the downswings were much more prevalent. There were lots of white gaps in the first example, which meant that getting out of the downswing happened regularly. Here, especially in the middle chunk of the graph, it was unrelenting.
This is the reality of tournament poker. For most people, it will get tougher as they move up in stakes. We got a bird's-eye view of how tough it potentially could be with the recent MTTDB release of all the Triton results for the last decade. These are some of the best players in the world, but they're also playing against the best players in the world, so their ROIs will be very low. As a result, you see some absolute crushers amongst the names in the biggest losers category.
This is why, once again, I believe that it's incumbent on anyone who takes poker seriously to spend some time looking at variant calculators. You don't have to like it, but you at least have to understand it.
