Some Secrets to Successful Professional Poker
A lot of the topics that we speak about in our poker tournament selections are game related; how to play certain hands, leveling, game evolution, and so on. But, to become a long term poker player, and to stay profitable throughout the course of your poker career, there are concepts to take in that go beyond the spectrum of simply knowing and understanding the game. There are factors at work outside of simply playing the game. Learning to control these exterior facets of your game can prevent you from spewing off large chunks of money when game conditions aren’t favorable for profitability in the long run. One of the biggest problems that up and coming players find themselves facing as they begin to expand their game is overconfidence.
You’ve been reading our posts, putting in a lot of volume, and studying vigorously, and your game has improved to where you think, “Why, Nikki, I’m supremely confident I can crush any game around. Why should I be cautious about it when I’ve been crushing everything around here?” Simply put, overconfidence can blur your ability to find good games and stretch yourself thin. You have to be aware about all the factors that these games have working against you when you do find them, and evaluate whether taking the risk and playing in the game is worth the potential damage that it can do to your bankroll.
A good example of this can be found from local players and their want to travel to and play in bigger games. We generally play in small tournaments around here, between $25-$50 buy-ins, with little or no house take. They’re local, and though the money isn’t incredibly great (Generally 10-30 players) the locality and the poor play make them easy to cash in. We’ll assume that twice a week, they run the game and always have 20 players and a $40 buy in. Assuming 40/30/20/10 payouts and $800 in the game, it’s $320/$240/$160/$80. We’ll also assume that the tourney runs for 4 hours on average, and that, instead of winning 1/20 and cashing 4/20 times, on average, you’re good enough to have stats more like 2/20 and 8/20 win/cash ratio. So every 80 hours, we expect to win twice ($640) and we’ll assume cash twice in each of the other two positions ($960) giving us a total of $1,600 in winnings; after taking the $800 in buy-ins, we make about $10 an hour on average, not a great return on our money, but a steady profit for a beginning card player. A few months into this, with our bankroll built up to $1,000, one of your friends tells you about a different tournament, an hour away, that has 50 players, a $100 buy-in, and a big chunk of the percentage going to 1st, meaning a win there is worth thousands of dollars. Swayed by the allure of a big win, you happily skip your normal $40 tournament, and go off an hour away (by yourself, meaning you’re paying gas) to this new tournament. When you get there, you sign up as the 50th and final entrant, and they post the prize pool up.
1st- $2,500
2nd-$1,000
3rd-$500
4th-$300
5th-$200
After looking at the pool again, you ask your friend, “Hey, isn’t there another $500 in the pool?” He pauses and then leans over to you. “They rake it out, man. It’s just 10%, and look at all the money to first!” Without giving it a second thought, you decide, yeah, this is your new game. Let’s take a look at a few things, first, though. Again, we’ll assume a few things; this tournament will last a bit longer; 6 hours sounds about right. The buy-in will probably increase the skill level of the players involved, so we’ll assume that, over 33 tournaments, we win once and money 5 times, once in each position. So, for a $4,500 profit, we invest $3,300, leaving us $1,200. Before we can add that, remember; travel is an expense that detracts from your poker bankroll. So, let’s deduct $10 (a low number) for gas each trip, taking the $1,200 down to $870 in profit. Now, we’ve invested 198 hours (we’ll call it 200, to keep things simple) into this game, meaning the “big game” that your friend talked about so highly nets you a healthy $4.35 an hour in profit, meaning your making less than half as much. Not a sound investment. The thing is, it’s not just the rake and travel costs that make this game such a bad decision for you.
There is a concept called “risk of ruin” that, for our purposes, we will use a simplified definition for. Risk of ruin is the probability of an individual losing sufficient gambling money (known as capital base) to the point at which continuing on is no longer considered an option to recover losses. With a capital base of $2,000, we can assume to play 9 times ($110 cost per tournament=$990) before we’re financially “ruined” from a poker standpoint. We assumed that, in 33 tournaments, we would cash in each of the 5 positions once, but if we bring the sample size down to 18, on average, we’re only cashing 3 times. So, 1/6 of the time, roughly, we’ll place in the money. After computing the odds of cashing at all in the first 9 tournaments, we find that our risk of ruin for this scenario is startlingly high. After a month of play, we have a 15% chance of busting our bankroll and having to start anew. Let’s look at our old tournament and see what our risk of ruin is with that game. We have 25 buy-ins for the tournament, and our odds of cashing are much better; 40%. We find that our risk of ruin in this scenario is incredibly low. Clearly, the smaller buy-in tournament is a much better profit earner than the larger one, at least until your game is at a level that you expect to cash a higher frequency of the time. Even then, it may be wise to seek out games that are closer to you and more exploitable than games that are further away and heavily raked. Don’t underestimate what the vig, your own confidence, and other factors can have at dropping your bankroll to ruin.
A good but simple example online points to why we suggest such small %’s of your bankroll for individual buy-ins even if you are profitable in higher stakes. Pay structures are often weighted very heavily to first and playing large field tournaments that are more than 1% of your bankroll on a regular basis can leave you without enough money to play at levels that do not require a substantial cash in the near future. Even with an ITM (in the money rate= meaning how often you cash) of 15-20% these cashes are typically very small, the very substantial prizes are typically for the top 3 players, if you are playing a 2000 person tournament, there are very few players who will finish top 3 more than 1% of the time. For example, lets say in the first 100 tournaments you cash 17 times, you had a good chance at final table 3 of those times, but you faced a bad beat or very bad run of cards and failed to make final table. Without a single finish in the top 3 (1% expected for a top player, and far less for a more casual player) we find our long term profitable play to have a substantial loss.