How
Does The Standard Deviation Work?
If you haven't taken statistics, this term may scare you,
but it's really not hard to grasp. Try thinking of the standard
deviation as though it's an adjective modifying a noun (your
hourly win rate). Here's an example: "She's wearing
a dress." Dress, of course, is the noun. Now modify
that sentence by adding one of the following adjectives:
"She's wearing a (sexy, blue, business-like, grandmotherly,
clinging, revealing, scandalous, see-through, designer,
hideous, glamorous) dress. As you can see, substituting
one adjective for another radically changes the meaning.
It's much the same with the relationship between the standard
deviation and the mean.
If there were no dispersion (range of values) in a distribution,
all observed values would be the same. No observed value
would deviate - move away - from the mean. If, for example,
it were exactly 64 degrees Fahrenheit in your wine cellar
for 6 days in a row, the mean temperature would be 64 degrees
for that period, and there would be no variance at all between
the high and low readings - just the way things should be
in a wine cellar.
But observed values
usually do deviate from the mean. Some deviate by a little,
others by a lot. The standard deviation is a measure of
the "average" amount by which all values deviate
from the mean. In poker, the higher it is, the larger the
bankroll you'll need to withstand expected bumps and potholes
on the road to consistent profits.
