Variance In Poker
Poker is both a game of skill and a game of chance. Being successful at it involves being able to distinguish situations that involve a positive expectation over time, and avoiding those situations which yield a negative expectation in the long run.
At a casino, the house has a small mathematical edge in all the games they offer, by design of course. This does not mean that their profits are sure and steady though, as luck is a factor, although in the long run, this luck will even out and their edge will win out.
No one would play at a casino though if for every set amount they wagered the house would take their cut and there would be no real possibility of variance. There has to be a deviation in the short term, where players may get lucky over this time span, to attract players to this negative expectation overall.
The same is true to a large extent with poker players, as even the worst players can get lucky to a certain degree. Better players often lament over the so called bad beats that get laid on them, where their superior hands would get drawn out on, and this is a fairly regular occurrence in fact.
The more bad players there are at a table, and the worse they are, the more likely these so called bad beat events will occur. However, it is these very situations that have the most profit potential, and we should be thankful and not angry to be subject to a higher incidence of them.
In order to view our results properly during a given timeframe, the ideal view is always going to be a neutral one, where we view our overall expectations over the long term and ignore anomalies due to luck. So if you are a losing player you are able to see yourself for what you are, and make decisions on whether you should continue or how much effort you should put into trying to correct this situation and turn things around.
Similarly, if you are a better player, then you will realize that there will be swings in your luck in the short run, and you then look to effectively plan things so that you can comfortably sustain these swings, or variance, so that you can reap the benefits of your skill.
The comfort level that you need to manage variance properly has both objective and subjective components. First, you need to have enough financial resources to be able to withstand the large swings in your bankroll that are possible, where you can sustain them and not go broke or have to significantly drop down stakes.
So this is the objective side, however this alone is not enough. You also have to accept the reality of variance and realize that it is a component of the game that cannot be controlled. However if we let it affect our play, we can certainly make things worse, where the poor decisions that may result from tilt can significantly worsen so called bad runs.
It is also important not to get too conservative here and let our concern with variance have us playing too small stakes for our bankroll and ability. This is especially true if we can replenish our bankroll fairly easily. The appropriate level of concern over variance therefore depends a lot on the consequences of it getting too far out of hand, and we need to pay attention to both risk of ruin, the risk of going broke due to variance, and the consequences of that happening.
It is not only better players that need to be paying attention to this though, as if you are a less skilled player variance can actually be even more significant, as your natural negative expectation will accelerate these downfalls. By the same token, the bigger your edge, the less impact variance will have, as these advantages will tend to offset these shorter term streaks of bad luck.
Accommodating variance does need to be taken seriously by all players though regardless of how good you are, although the better player that you are, and the easier your competition, the more effectively you may be able to manage it. Your best weapon though against variance is a good understanding of the necessity of it, and a plan to manage it as it occurs, where your view is longer term as it should be, and your overall strategy flows from that.