vpFREE2 Forums

bankroll-related practical questions

#1

I've been reading the board in lumps lately instead of daily and I
was just catching up on past digests. I've got a few practical
questions for the people who make use of the bankroll numbers. There
may be no answer to these questions, or maybe they're too old hat and
have already been discussed ad nauseum, but they are new questions to
me and I seriously wonder what the theoretically correct answers are.

First, suppose you calculate that you need a $30,000 bankroll with a
0.5% risk of ruin and you play your chosen game perfectly, but you
happen to start off by losing $15,000 (which is perfectly within the
odds, that's why the bankroll is 30). What do you do at that point?
Since the cards have no memory and therefore don't know you just lost
$15,000, wouldn't you have an insufficient bankroll to continue
playing the game? And if so, then $30,000 wasn't an adequate bankroll
to start with, it seems. And if you do keep playing and keep losing,
at what point do you decide that you might be in the exclusive 0.5%
club who is permitted to bust a $30,000 bankroll on that game (calc
was made with 0.5% risk of ruin assumption)?

Second, related to the above and again focused on practicality, few
people I know play a single game all the time. Particularly outside
of LV, many of us, in pursuit of positive EV, play a wide assortment
of progressives and promo games, and often even a mix of
denominations. Thus, dollar losses may need to be offset by quarter
wins or vice versa, and a shortfall of quad-deuces in DW-like games
may need to be offset by a surplus of quad Aces in DDB-like games or
vice versa. So the question is, to what extent can I reasonably
expect that money results will even out over time? For example, if I
have exactly my predicted number of royals but one too many in
nickels and one too few in dollars, is that a permanent monetary loss?

Finally, since the cards have no memory, if I hit an unusually large
win outside my normal pattern (say a progressive that got way out of
line), can I reasonably expect to be able to hold onto the surplus
portion? For example, suppose I generally target dollar progressives
to yield 100.5% based on a $6000 royal. And suppose I keep my books
on an "expectations" or accrual basis, where I track number of hands
played and periodically withdraw the 0.5% "earnings" but otherwise
let my bankroll rise and fall to reflect how far away I am from
overall average expectation at any point in time. Then one day, lo
and behold, I hit a royal for $9,000. Can I theoretically-soundly
withdraw the excess $3000 along with my usual 0.5%?

#2

First, suppose you calculate that you need a $30,000 bankroll with

a

0.5% risk of ruin and you play your chosen game perfectly, but you
happen to start off by losing $15,000 (which is perfectly within

the

odds, that's why the bankroll is 30). What do you do at that point?
Since the cards have no memory and therefore don't know you just

lost

$15,000, wouldn't you have an insufficient bankroll to continue
playing the game? And if so, then $30,000 wasn't an adequate

bankroll

to start with, it seems. And if you do keep playing and keep

losing,

at what point do you decide that you might be in the exclusive 0.5%
club who is permitted to bust a $30,000 bankroll on that game (calc
was made with 0.5% risk of ruin assumption)?

is this like lewis carroll's tortise and hare?

what do i do? well, when i begin a gamble, i allocate a fund, and i
can calculate my risk of losing that entire fund, then i play, if i
burn through that fund i quit (hey, it's a gamble, and i chose to take
that gamble)

technically, what bankroll means is that you always have a (in your
example) 0.5% chance of losing $30,000. so, if you've lost half of
that, your chance of losing another $15,000 at that point would be
sqrt(0.005)=7%.

Second, related to the above and again focused on practicality, few
people I know play a single game all the time. Particularly outside
of LV, many of us, in pursuit of positive EV, play a wide

assortment

of progressives and promo games, and often even a mix of
denominations. Thus, dollar losses may need to be offset by quarter
wins or vice versa, and a shortfall of quad-deuces in DW-like

games

may need to be offset by a surplus of quad Aces in DDB-like games

or

vice versa. So the question is, to what extent can I reasonably
expect that money results will even out over time? For example, if

I

have exactly my predicted number of royals but one too many in
nickels and one too few in dollars, is that a permanent monetary

loss?

yes. i would look at the big money games first, if you are confortable
with those bankroll requirements, the smaller games will be less
risky. you do need to play hands however, presumably the small games
are taking away hand time from the big games.
i play a wide assortment of games, and i look at the bankroll/risk
numbers for each

Finally, since the cards have no memory, if I hit an unusually

large

win outside my normal pattern (say a progressive that got way out

of

line), can I reasonably expect to be able to hold onto the surplus
portion? For example, suppose I generally target dollar

progressives

to yield 100.5% based on a $6000 royal. And suppose I keep my books
on an "expectations" or accrual basis, where I track number of

hands

played and periodically withdraw the 0.5% "earnings" but otherwise
let my bankroll rise and fall to reflect how far away I am from
overall average expectation at any point in time. Then one day, lo
and behold, I hit a royal for $9,000. Can I theoretically-soundly
withdraw the excess $3000 along with my usual 0.5%?

the question is always how bad of a losing streak are you willing to
maintain before you quit. that's your bankroll and there is a certain
risk of loss.

that's a stop loss limit

you could also have a gain stop limit, but that's a different topic

skiming the fund? i'm not sure how to answer that, i think if you get
the concept of bankroll and risk of ruin and put in N0
(variance/(er+cashback-1)^2) hands, you will know where you stand

···

--- In vpFREE@yahoogroups.com, "blaw57" <blaw57@y...> wrote:

#3

another comment:

if you put in 4N0 hands per year, each year has a 98% chance of being
a winner (meaning you've added to your bankroll)

so, one year out of 50 is a loser, hopefully not your first year

likewise, if you began your first year with a 2% ror bankroll, you
have 2% odds of busting out before completing the year, but 98% odds
of making it through the pass

obviously if you survive the first year, conditions improve, assuming
you're playing the same game and assuming you're not skimming your
bankroll (presumably losing an initial bankroll in the second year
won't be as bad if you gained that amount in the first year, etc.)

#4

But don't forget that the ROR numbers assume that you NEVER remove
any winnings from your bankroll.

--- In vpFREE@yahoogroups.com, "nightoftheiguana2000"
<nightoftheiguana2000@y...> wrote:

another comment:

if you put in 4N0 hands per year, each year has a 98% chance of

being

a winner (meaning you've added to your bankroll)

so, one year out of 50 is a loser, hopefully not your first year

likewise, if you began your first year with a 2% ror bankroll, you
have 2% odds of busting out before completing the year, but 98% odds
of making it through the pass

obviously if you survive the first year, conditions improve,

assuming

···

you're playing the same game and assuming you're not skimming your
bankroll (presumably losing an initial bankroll in the second year
won't be as bad if you gained that amount in the first year, etc.)

#5

--- In vpFREE@yahoogroups.com, "ozymandias77096"
<ozymandias77096@y...> wrote:

But don't forget that the ROR numbers assume that you NEVER remove
any winnings from your bankroll.

i think i'd prefer to look at it this way:
for any given point in time, you have a chunk of money allocated to a
gamble, call it your bankroll, and it is possible to begin a losing
streak that will consume that entire bankroll, the risk of that
happening is your risk of ruin

the allocation of money is your call, you could vary it to your
liking, adding to it or skiming some away, but at each point in time,
at each hand, there is a defined risk of begining a losing streak that
will consume it

if you wanted to maintain a fixed ror, you would have to add to your
bankroll to maintain the required amount, but you can see that if you
did that you would never bust out, your bankroll can never fall below
your initial seed because if it does you add to it

there are different ways to look at it, but i look at it this way:
i see a positive gamble, i allocate the seed money (bankroll) and i
can calculate the risk of losing the seed, and i begin, any winnings
over the seed i can skim, but once i start losing i have to ride it
out, the odds of losing the entire seed are still the initial ror
number (when i began my losing streak)

alternatively, you could apply winnings to the seed, which would
reduce your ror, which might be a good bet if your initial risk was
high

make sense? for example, i could start playing deuces with a bankroll
of 5 royals and i can calculate my risk of ruin for that bankroll, i
play my first hand and hit deuces - i can skim that winning (minus
the initial bet) and i still have a 5 royal bankroll, what are my odds
now of losing it? still the same.

#6

Here's another trouble with having a fixed ROR bankroll:

Let's consider the case where you allocate a bankroll according to
the ROR you feel you can live with: say, a 1% ROR.

Now, the most likely result in the short term (before your first
royal, for example) is a reduction in the size of your bankroll.
This might be in the neighborhood of a 20% or more loss. At that
point, by your own predetermined criteria, your bankroll is now too
small (your ROR is too high). Now what? Do you keep on playing and
live with the increased ROR? Do you add your bankroll to replenish
it to its former state?

If you replenish your bankroll, then it could be argued that those
added funds always were part of your bankroll in the first place,
given that they were available as needed. So your REAL bankroll is
ALL the money your are prepared to commit to VP, after which you
will quit FOREVER. Now, if you have the iron discipline to say, I am
committing X dollars, no more, no less, under any circunmstances,
than you will have to "overbuy" the ROR number in order to maintain
a comfort level.

For instance: you have determined that the optimum bankroll size/ROR
is $5000 for .25 VP. AS SOON AS YOU MAKE YOUR FIRST BET (which you
will probably lose), your bankroll becomes inadequate. If you would
not tolerate playing at a 5% ROR, for example, you would have to
quit if your BR dropped to $3450 (or whatever the number is). So in
this case, you could say that your "real" bankroll was only $1550,
since you intended to quit when the ROR for your present BR size
became unacceptable. Conversely, if you intend to keep on playing,
then you are throwing your ROR requirements out the window.

So there's an inherent contradiction here: if you play to a given
bankroll with a given ROR, you CANNOT maintain those ROR
requirements and still utilize the entire bankroll. After all, would
you still keep pounding away if the BR dropped to $1000? $500? At
some point the ROR would say: re-buy or stop playing.

I guess it comes down to semantics, after all. The term "bankroll"
is meaningless unless it means, "if I lose this, I'm never never
ever playing VP again". Who ever says this? Or menas it if they do?
Likewise the ROR calculation: Your BR has to be considerably LARGER
than the amount that it would take to MATCH your maximum ROR.

#7

--- In vpFREE@yahoogroups.com, "rockofjello333"
<rockofjello333@y...> wrote:

Here's another trouble with having a fixed ROR bankroll:

Let's consider the case where you allocate a bankroll according to
the ROR you feel you can live with: say, a 1% ROR.

Now, the most likely result in the short term (before your first
royal, for example) is a reduction in the size of your bankroll.
This might be in the neighborhood of a 20% or more loss. At that
point, by your own predetermined criteria, your bankroll is now

too

small (your ROR is too high). Now what? Do you keep on playing and
live with the increased ROR? Do you add your bankroll to replenish
it to its former state?

If you replenish your bankroll, then it could be argued that those
added funds always were part of your bankroll in the first place,
given that they were available as needed. So your REAL bankroll is
ALL the money your are prepared to commit to VP, after which you
will quit FOREVER. Now, if you have the iron discipline to say, I

am

committing X dollars, no more, no less, under any circunmstances,
than you will have to "overbuy" the ROR number in order to

maintain

a comfort level.

For instance: you have determined that the optimum bankroll

size/ROR

is $5000 for .25 VP. AS SOON AS YOU MAKE YOUR FIRST BET (which you
will probably lose), your bankroll becomes inadequate. If you

would

not tolerate playing at a 5% ROR, for example, you would have to
quit if your BR dropped to $3450 (or whatever the number is). So

in

this case, you could say that your "real" bankroll was only $1550,
since you intended to quit when the ROR for your present BR size
became unacceptable. Conversely, if you intend to keep on playing,
then you are throwing your ROR requirements out the window.

So there's an inherent contradiction here: if you play to a given
bankroll with a given ROR, you CANNOT maintain those ROR
requirements and still utilize the entire bankroll. After all,

would

you still keep pounding away if the BR dropped to $1000? $500? At
some point the ROR would say: re-buy or stop playing.

I guess it comes down to semantics, after all. The term "bankroll"
is meaningless unless it means, "if I lose this, I'm never never
ever playing VP again". Who ever says this? Or menas it if they do?
Likewise the ROR calculation: Your BR has to be considerably

LARGER

···

than the amount that it would take to MATCH your maximum ROR.

+++++++++++++++++++++++++++++++++++++++++++++++++++++

I think that this is basically what I was trying to

convey in the previous posts on this subject (when I suggested that
my bankroll was what was in my pocket) but The Rock said it so much
more succinctly.

                Babe