Variance and Your Poker Bankroll

Variance is a measure of the upward and downward swings in your poker bankroll, the greater the variance, the greater the swings. Many players believe variance to be closely linked to how well you play, which is incorrect; variance has very little to do with the standard to which you play, it is much more to do with the types of games you play in.

A game is normally considered high variance because of the bigger swings in poker bankroll that occur in order to make a profit, it is sensible to understand the reasons why the bigger swings in bankroll occur rather than just knowing that they occur; this will help identify the variance of a game much more easily because we know what causes the swings. It is also understood that a game which is considered high variance will need a larger bankroll to handle the bigger negative fluctuations.

It is widely accepted that the looser the game you are playing in, the higher the variance will be, basically your good hands will get outdrawn more often in a loose high variance game, but this is compensated for by the looseness of the game because when you do win, you win a bigger pot. It is therefore likely that variance decreases as the table limit increases due to the tighter nature of the higher table limit games, although this is very much a grey area because players ultimately determine how loosely a table is playing, not table limits.

A shorthanded game involving 6 players or less has a much higher level of variance than at a full 10 seater table because you tend to play a much greater percentage of the time when at a shorthanded table, also because your opponents ranges of playable hands are much lower, so effectively everyone around you is more willing to gamble with lower quality holdings.