Reducing Tournament Variance

Reducing Tournament Variance

Monday, 27 January 2014

Top tips from Mickey Petersen.

As a tournament player one of the most important concepts to understand is how crazy the swings can be and how they relate to bankroll management. From an outsider’s perspective, it’s often strange to hear about how there are so many great tournament players and “big names” who are broke or just scraping by and are playing much lower stakes than they did at their peak.

The number one reason is a lack of regard for bankroll management. Most tournament players, even professional ones, don’t realise just how big the downswings can be until one hits them and it’s too late. I’m not going to go into what exactly proper bankroll management for tournaments is, because even though it has been debated many times before, the truth is that no one really knows and that everyone has a different approach to how much risk they are willing to expose themselves to. Instead, I am going to talk a bit about a couple of things you can do to help reduce your variance.

Selling pieces

The great thing about selling some of your action is that you can scale the buy-in to the exact amount you are comfortable risking and still play within your bankroll. So if a really good tournament comes up that has a bigger buy-in than you are used to, you can still play it and not suffer a huge setback if you don’t cash.

A lot of people will also charge a mark-up – essentially a premium price, so you are paying more than just the face value for a piece. If you feel you are able to do that, and provide a good investment for both yourself and the seller, then that’s another thing that will help with your downswings, as you are essentially sacrificing some of your expectation for an immediate payoff with zero variance.

Be careful, though, if you are selling or buying: a lot of people tend to overcharge (almost every poker player thinks they are better than they are) which makes it a bad buy for the investor. Also remember that, while the best tournaments are often the ones that have the largest number of players, they’re also the ones you should be more willing to sell action to as you will win them far less frequently and suffer greater swings because of that.

Swapping action

Although it’s not quite as effective as selling pieces, swapping action is another great way to help reduce the variance of the tournament grind. If you can find someone you trust and know well, and you both think you have a similar skill level, swapping at least a few percentages seems like a no-brainer. Yet I am often surprised at how little swapping actually goes on and I think there are a few explanations for that.

First of all, let’s say you swap 3% with ten people – it might not feel like much money, even if one of them wins or a couple of them cash, but if you cash yourself and have to pay out 30% of your winnings it seems like a huge hit.

People tend to forget all the times they won a little bit of money from someone else and just remember the times they had to give up some of their winnings. The second thing is that a lot of people seem afraid to ask because they don't like to be turned down, which is silly. The absolute worst thing that can happen is that someone says no and you are no worse off than before you asked.

Most swaps occur before a tournament starts, but sometimes people will also swap between days or deep in a tournament on breaks, which has the benefit of reducing the variance when most of the money is on the line. The downside is that it’s hard to calculate what kind of split it should be if you don’t have the exact same stacks, and someone might have a much more favourable table draw. I enjoy swaps because of the reduction in variance, but also because it often provides a fun sweat. Just be careful to do it only with people you know and trust.

Don’t take this article to mean that you have to sell action and make swaps for every tournament you play, just consider it if you are looking to step a bit out of your comfort zone or want to spread the risk more.

Tags: Mickey Petersen, strategy