Glossary
Variance
Variance is the natural swing of results around their long-run average. Even a well-reasoned bet can lose, and a poor one can win, over the short term. Variance describes how far and how often actual outcomes stray from what the underlying probabilities would predict.
Variance is the reason results are noisy. Probability tells you what happens on average across a huge number of bets, but any short stretch can wander far from that average. A run of wins does not prove a strategy is sound, and a losing streak does not prove it is broken.
Think of a coin you know is fair. Flip it ten times and you might see seven heads. That gap between the expected five and the actual seven is variance at work, and it shrinks only as the number of flips grows.
Why it clouds judgment
Because short samples swing so widely, it is easy to mistake luck for skill or skill for luck. A bettor riding variance upward may feel invincible, while the same approach can look hopeless during a cold stretch. Separating signal from noise takes a large sample and honest record keeping.
Variance and bankroll
The wider the swings, the deeper the reserve needed to ride them out without being wiped by an ordinary bad run. This is why variance and bankroll are always discussed together.
Understanding variance keeps you from reading too much into any single week.