Poker ROI - Calculating Poker Return on Investment
If you looking to become a serious poker player than it would be wise for you to keep track of you stats. One of the most important stats a player can look at is their "return on investment" or ROI for short. If you are unaware of what ROI is, it really is very simple.
It basically tells you how much of your money you have made in profit "your return" while playing verses how much you bought in for or "your investment." And if you have heard the term before and have seen percentages but do not know what they mean, a 0% ROI would mean you are a break even player (ie. the profit is zero but you havent lost your actual investment). Anything short of that means that you have lost money in the long run while anything above 0% means you have made a profit. A 100% ROI would mean that you have doubled your investment.
For a realistic return on investment in poker - ROI % should be calculated over at least 100 games to give a true reflection of you true potential ROI over the longer term.
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How Do I Calculate My ROI ?
To figure out your ROI you only need 2 numbers and I will provide the 3rd number for you. Lets say you were playing at a Sit N Go on your favorite online poker room and the buy in was $5 + $.50 for the fee. There are 10 players and the top 3 got paid out in this order: 1st=$25, 2nd=$15, and 3rd=$10. What would your return on investment be if you got first place in the game ?
This is the equation you would use: (Total Won - Total Buy-ins) / Total Buy-ins X 100
If you put the numbers in (for this single game), it would look like this:
($25-$5.50)/$5.50 X 100 = 354% ROI approximately.
If you were to win 3rd place you would have:
($10-$5.50)/$5.50 X 100 = 82% ROI
Now these figures are good, great in fact. But you have to remember that is only for one game & therefore an unrealistic indicator of your future likely return.
Like any statistics, you need to perform tests over the long term. For this reason ROI is generally calculated over your results for 100 games or more.
A more realistic way to look at it is if you looked at your results played over 100 games and lost 99 while only winning 1 ... Your 354% "ROI" over one game does not look too good or realistic, does it ? What would your ROI be then ?
Using our example game above, where you spend $5.50 per game, which gives a total investment of $550 for all 100 games, here is what your true ROI % would look like winning 1 game for $25 and losing 99 games at $5.50 each.
($25-$550) / $550 X 100 = a negative ROI of -95.54%
Lets take a more realistic run of 100 games ... Out of 100 games (investment $550) you win 10 games (at $25 each) + you come 2nd in 10 games (at $15 each) + you come 3rd in 20 games (at $10 each) but you loose the remaining 60 games, this would mean a total of $600 in winnings ...
($600 - $550) / $550 x 100 = a positive 9.09% ROI
And as we mentioned above, a break even player would be at 0% so the last example shows an apparently modest profit of 9.09% but over the long term this is actually a very reasonable return.
It is important to track your stats over the long term as that will show you a far more precise number than just a handful of games. Although 100 games would seem like a lot, you can play that many 10 player SnG's in a matter of 2 weeks or less. Just remember that more is better and will give you an idea of how good a player you really are.
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What About Cash Games ?
Cash games will not work as there is not set "buy in" or time limit on the game. Meaning that you can buy in for between the table minimum and maximum, play for 10 minutes, and leave. And of course that can vary. You can play for 30 seconds well up until you passed out. Simply put, ROI% is not such an effective tool for cash games. There are really no concrete stats to use and would ultimately throw your numbers off. Most players will use stats such as "money per hour" to determine whether or not they are making or losing money.
And that basically sums it up. ROI% is very important to keep track of and it will let you know how you are doing as a poker player. It is hard to say where a player should be at, but an average player may hit a short term ROI of around 10-20% but more less likely to hit this over the long term. This % ROI may not seem very high, but it is actually a very good ROI when keeping the many variances you face in tournaments and sit n gos in mind.
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