I thought we might talk about hourly rate and standard deviation today. For those of you who are totally familiar with this, please come back next week. For those whose eyes are starting to glaze over, please bear with me.

Hourly rate is your win rate in dollars per hour. Unfortunately, this takes a long time to be accurate, typically thousands of hours. In our current instant-gratification world, everyone wants to think that know their hourly rate after a few hundred hours. that may seem like a lot, but poker is a very high variance activity, and you can be lucky or unlucky for a very long time.

Hourly rate is still the best measure we have, but remember to take it with considerable skepticism until you have the thousand of hours needed. Even then you need to be somewhat skeptical, as during the time elapsed, your game or that of your opponents may have changed.

Hourly rate needs to be tempered with standard deviation, which more-or-less measures varation (or luck, in our case). In another way of thinking, it measures predictability. Let’s pretend you are buying 100 baseballs. You get two containers, each certified to contain baseballs of the same average size. In one container, all of the balls are correct to within 1/8 of an inch. In the other, there are some around the right size, some very large ones and some very tiny ones. Box One would have a small standard deviation, and box Two a large one, even thought he average size was still the same. In box One, you be confident that the next ball you pull out would be a playable size, but in box Two you could not trust that.

That’s the way it works in poker (roughly). A low standard deviation makes your hourly rate more predictable and trustworthy, a large one means it will take even more time to trust it. Most poker standard deviations run between 9-10 big bets per hour. If yours is lower, it means your results are predictable, but it probably also means you are limiting your earn by not taking enough risks. If yours is higher, it may mean you are playing too many hands, or you are playing in a very volatile game.

If you don’t know you standard deviation, you can calculate it using formulas found in textbooks, or just use a results calculator (I use StatKing available from www.conjelco.com and I don’t paid to endorse this product). If you keep good records, you should be able to know it easily.

So what do you do with it? Your hourly rate, combined with your standard deviation, tells you how you are playing, what your bankroll needs are, and whether you are ready to move up (an hourly rate of better and 1.5 bets per hour typically means you will great success and a better earn at the next level. One of 0.5 bets per hour typically means you will not be successful there). That seems like a lot of useful information to me.