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What Goes Up Might Come Down | |||
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By Tommy Angelo Meet Joe.Joe does it by the book.He likes to follow instructions. But if the instructions don't make sense, you can count on Joe to make a fuss. Joe has been playing poker for two years. The only game he has ever played is $1-2 limit hold'em online. Joe works hard on his game, reading books and articles and staying active in online forums. Joe lost steadily his first year, then he broke even over the next six months, and in the last six months he has been winning consistently. Joe's bankroll is $1000. For the first time since day one, Joe has his eye on moving up. What Joe wants to know is, assuming he keeps winning at $1-2, and assuming he doesn't add outside money to his account, at what point should he sit down in a $2-4 game? How much money should he have in his bankroll? Joe asked his poker buddies, he asked people at online forums, and he consulted his favorite poker writers. They all said the same thing. They said that Joe should not move up in limit until his bankroll reached a certain amount. And that's it. End of advice. The recommended amount varied. Some of Joe's advisers suggested he move up at 300BB, some said anywhere around 400BB is good, and others said he should wait until he had 500BB. Putting it all together, they said that if Joe's win rate is 2BB/100 hands - which it was - and if he wanted to ride out the inevitable waves of fluctuation with a reasonably low risk of sinking - which he did - then he should have at the very least 300BB, maybe even more. Joe did exactly as he was told. He considered all of the advice, assessed his feelings, weighed his priorities, and, being a cautious man, he decided to move up at 500BB. That would be the minimum amount he would have before he moved up. Then he executed his plan. He kept winning at $1-2, and when his bankroll got up to $2000, which is 500BB at $2-4, Joe took a seat in a $2-4 game. On his first hand of $2-4, Joe got AK in the big blind. He put 3BB into the pot before he folded on the turn. At that moment, the power went out, and Joe lost his internet connection. An hour later, he signed back on to play poker. Joe had to choose which limit to play. His bankroll in dollars was $1988, which was 994BB if he played $1-2, or 497BB if he played $2-4. So, with unerring discipline, and full faith in his advisors, Joe took a seat in a $1-2 game. "But wait," Joe thought to himself. "This can't be right. Before the power went out, I was about to take the small blind in a $2-4 game. And now, the power is back on and I'm about to take a seat, and according to the teachings I should play $1-2. There is madness to this method!" The next day, I had lunch with Joe. He told me in animated detail about his session the night before. He ended by saying, "This whole episode has me very upset." "That's good," I said. "What's so good about it?" "When you are upset, it means any change in mood is likely to be an improvement." Joe tried to, but he could not restrain a grin. I pointed at his face. "See what I mean!" "Seriously though, this is ridiculous." Joe had his frown back. "Was I really supposed to quit the $2-4 game after playing one hand? And drop down to $1-2? And then, if I got ahead twelve measly bucks at $1-2, was I really supposed to just up and quit and hop back into a $2-4 game?" "I think you know that the answers are all no." "Then what was I supposed to do?" Joe's hand tightened around his coffee cup. I took a breath. "Okay Joe, let's go back to last night. Let's pretend the power had not gone out. Let's say you had gone ahead and taken the small blind in the $2-4 game and you lost that hand, and for the next hour, you hardly got any good starting hands, and the ones you got didn't win. Your bankroll is now down to, say $1920. That's 480BB at $2-4. Would you have quit at that instant based entirely on your bankroll size?" "No." "Why not?" "I don't know. It wouldn't even have occurred to me to quit. I'd just be playing. Why the heck would I be thinking about quitting? I just sat down!" "But let's say it happened again." "What, you mean the power going out?" "No. I mean another hour of card-deadness. And then another hour. And another. So now you're into the worst run you've ever had. And after a few more hours of dreck, you think you're into the worst run anyone on earth has ever had, and you look up, and guess what? Your bankroll is $200. That's 50BB." "But there is no way I would let that happen." Joe was insulted. "And just how do you think you would stop it?" "I'll tell you how. I'd drop down in limit, long before I got to 50BB. That's part of the master plan. Everyone says you have to be ready to swallow your pride and drop down in limit sometimes, and then build back up." "I totally agree. What goes up, might come down. So, what's your plan for when it does? Joe glared at me. "I don't have one! Nobody gave me one!" Joe sat back and crossed his arms. I sat up in my chair and resettled. I continued, "Let's go back to pretending you had hit an infinitely bad run at $2-4 last night. You said you would have moved down in limit long before you went broke. When would you have moved down?" Joe looked at the ceiling. "I guess I'd have bailed out of $2-4 if my bankroll got down to around 300BB." "There you go then." "What." "You have your plan." "I don't follow." "When you're on the mountain, sometimes you go up, and sometimes down. So you need two numbers, one for each direction. Last night, you had two numbers. The problem was they were the same number. What you need is two different numbers. The bigger number is the minimum amount you need before moving up. The smaller number is the minimum amount you need to keep playing at your new limit. You could call it your mountain range." "Funny. And like you said. I've got my range all ready to go. I'll move up at 500BB, and I'll move down at 300BB." "Now that is a plan," I said. Joe pulled out a pen from one pocket and a piece of paper from another. He wrote "$2-4 / Up at 500BB - Down at 300BB." I said, "Now listen Joe. If you don't follow it to the dollar, that's fine. The main thing is to have a solid sense of what your bankroll range is for each size game you play in, or might play in, whether it's higher, or lower, than your current limit." "I really like this." Joe drew a line under the numbers he had written. "Okay, now. Let's say I keep going like I'm going, and I keep moving up. What about my long range ranges?" "They get higher, and wider, as the competition gets tougher." Joe paused. He slouched back and released his pen and said, "I don't thinking I'm liking this so much anymore. But keep going." "What if, starting tomorrow, instead of making 2BB/100, you were all of a sudden making only 1BB/100? What would that do to your bankroll needs?" "I'd need more, obviously, because my losing streaks would be longer, and my dips would be lower. I see where you're going with this. You're saying I should be ready for my win rate to go down as I move up in limit, because the competition will just keep getting tougher. Which means at each level, I'll need more and more bankroll, in terms of BB's, to get the same risk-of-ruin." "TADA!" Joe grabbed his pen and hunched over his paper. "So what you're telling me is, if I was to move up to, let's say, $20-40, and I estimated my win rate was going to be 1BB/100, and I wanted to have the same risk-of-ruin I have now when I'm making 2BB/100, you're saying I'd need." Joe did some complicated calculations and arrived at a simple answer. ".I'd need my range to be 600BB to 1000BB. Wow. That seems awfully high." "It's okay Joe. There's nothing to be afraid of here. It's just numbers. It's all made up. There's no such thing as earning such and such per such and such at poker, until it happens, and then, that reality, that data range, is over. It's the same with risk of ruin. It's an idea, Joe. It's not real. Only the reality of ruin is real. And it goes like this: You are either in action or you are out of action. So. Which one are you?" It took Joe a second to see my grin, then he picked up on it. "I'm in action baby!" "And would you like to stay in action forever?" "Well I do believe I would." "And would you like to climb the mountain?" "That would be nice, yes." "Well, when it comes to climbing mountains, there's really only two things you need to know." "Well let's hear 'em!" "One is, walk slow." "Okay. I can see that. What's the other one?" "Don't fall off." : Tommy Angelo coaches poker. Details are at tommyangelo . | |||
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