Sunday, August 17, 2008

The Weekend Trader (Sunday Edition)

If it isn't blatantly obvious by now, I have a significant trading and poker playing Achilles heel, and it reared its ugly head again at Foxwoods last night.

What is it? I don't start very well and play terribly when "ahead". And that's not a defeatist comment by someone who doesn't understand the value of positive self-talk -- rather it's a flat-out objective truth. I don't know why I'm wired this way, but I am.

My trip to Foxwoods last night was yet another case in point. I bought into my usual $1/$2 no-limit cash game for the maximum $300 at about 3pm. On the fifth hand, I had Pocket Qs in the big blind, raised pre-flop, and got one caller who had about $200 in his stack. The flop then came 3, 7, 10. Looking pretty good, right? I then bet the flop and got called again. The turn came deuce at which point I decided to check to see what Mr. Caller would do. He then proceeded to go all-in with his remaining stack which I called thinking he had a middle pair which didn't trip up. He then says to me before seeing my cards, "I've got your pocket Qs beat with my pocket Aces." The river was no help and I'd lost 2/3 of my starting stack.

I then spent the next few hands playing that one over and over again in my mind, asking myself "How did he know?" Then the more I thought about it and put myself in his position, the more I realized I was (1) incredibly transparent and (2) not yet in my prime playing mindset. With respect to #1, since I'd been playing tight initially and raised in the big blind, it would have been obvious I likely had a high pair or something like A-K. Then when the flop came out, that opinion would have grown even stronger since I bet again post-flop, feeling confident with an overpair and trying to buy the pot right there instead of risking Mr. Caller tripping up on me (leading to his conclusion that I didn't likely have trips myself). At each point in the betting, he knew his Aces were good while increasing his sense of what I likely had. I could have had pocket Kings or Aces, but he knew Aces were highly unlikely since he had two of them, and if I did have Kings, he'd still beat me. So he put me on Qs.

Yet the more important point is #2. I'd only been playing for a short time, should have seen how my own betting was being perceived by him, and should have concluded that he had a higher pocket pair because of how he was reacting to me!!. Yet I wasn't yet in a truly mentally attentive state.

For the rest of the night -- and I played until 11pm -- I played pretty well, never having to rebuy and ultimately turning a low stack of $70 to a final cash-out of $292 ... essentially my initial buy-in. btw, I feel I'm nowhere close to moving to higher stake games until I hone my skill further at this level. I've pretty much given up tournaments though and am focusing primarily on cash games, or "true poker" that doesn't involve escalating blinds which invites a much higher degree of luck -- one reason why tournaments are often dominated by amateurs.

The parallels to my trading are downright scary. For I played extremely consistent after the first 30-minutes, picking my spots and making solid reads of both where my hands stood and where other players' hands stood. And I ended the day quadrupling my low stack of $70. But I did so only after putting myself in a position where I had to come from behind.

Sound eerily familiar?

Perhaps we can't surgically repair an Achilles heel, yet if we know it's there we may be able to create an effective strategy that detours around it -- even if it involves lots of hopping.

9 comments:

tpd said...

Hi Don,

this is TPD -:)

time flys and its been almost 5 years since we last spoke.

Good to see how your career has progressed. I spent the last 5 years in the corporate world...and will be exiting in September.

Nice to see that the methods and set-ups are still intact and as you say "its all between the ears"

Would like to catch up with you whenever you have the time.

Best regards,
Thomas (Munich, Germany)

Don Miller said...

Hello old friend.

Good to hear from you :-). Hope all is well and that life is blessing you in whatever you're pursuing.

Stay well.

Don

doug said...

Don
great analysis.
hope i do not get to meet you at a poker table!

keep on sharing your mind with us.
my poker game will certainly gain.

cheers
Doug

Aman said...

There is something fascinating about the pain of losing. I myself don't play my best if the pain of losing is still not there. It's what makes me tick. Even though it may sound like bad advice you may find you play better at a slightly higher level where the game is big enough that there is enough pain when things go wrong and a lot of pleasure when things go right. That way you don't have to look for that pain by losing initially. Why the need for pain? Because, when your thoughts are "absorbed" by the action the "I" disappears, you're alert and present. I feel, like most animals, we need pain to do that- to zone in.

p.s. I'm also a semi pro poker player in Vegas and a full time trader. I feel the difference between poker and trading is only superficial. The inner game is the same.

Don Miller said...

Hi Aman.

Extremely well said ... strong and useful words. Perhaps the greatest challenge with my starting fictitious draw approach is to really "feel" that pain of loss and keep it ever-present. Some days I seem to be able to channel that feeling better than others, and it does indeed occasionally take that real hit, either from an initial beginning-of-day trade loss (which could simply be opportunity loss resulting from a trade not taken) or a very poor prior-day performing day to make that feeling come alive again.

As I said in my early July posts, learning and trying to channel what you describe has done far more for my overall understanding of long-term success in this industry than any other aspect of trading. Too bad it took me about a decade of personal soul-searching and results analysis to find that out.

On the poker front, card playing has also no doubt helped me see my trading faults more clearly ... as I mentioned in my July 6 post. As you said, the inner game is very much the same ... and I'll likely be working on improving both as long as there's air to breathe.

Don

Johan Lindén said...

"true poker" that doesn't involve escalating blinds which invites a much higher degree of luck -- one reason why tournaments are often dominated by amateurs.

Well you actually need to be a better player to do well in tournaments in the long run than in cash games. Tournaments are a much more difficult games than cash games. In tournaments you have the initial low-blinds (cash game) play and than also the high blinds game. And you have to master both to succeed in the long run. Much more so than in low stake cash games which is a no-brainer if you are able to follow a poker 101 textbook.

Of course the up and down swings in tourneys are much higher, which in the short run leave more space for luck.

But the swings are not so low for your $1/$2 game either. You actually need a bank roll dedicated for poker of $20.000-$40.000!!! Of course, most people don't know or even understand that.

So, don't think of going up a level quite yet.

Thanks for sharing your stories!

Don Miller said...

Good stuff Johan.

I suppose luck -- even in trading -- is mostly applicable in the short run. Of course skilled players/traders seem to create their own "luck" more times than naught.

Can certainly relate to the bankroll issue ... of course, I barely have a toe in the poker pool, never mind a foot. If only I was that cautious when I first started trading :-).

Don

Aman Mehari © Copyright 2008. said...

Hi, Don and Johan,

Johan said:
“But the swings are not so low for your $1/$2 game either. You actually need a bank roll dedicated for poker of $20.000-$40.000!!! Of course, most people don't know or even understand that. ….So, don't think of going up a level quite yet.”

Excellent point.

In order for your thoughts to be absorbed by the action, and maintain emotional consistency, you obviously need a clearly defined system. Your money management system and your strategy comprise that system. In my view, defining and testing your approach is 90% of the game. The rest naturally follows from practice and continual drilling of the basics.

Thanks Don for inspiring me to write the 'pain of losing' and striving to make it ever more clearer.

Kevin said...

On the fifth hand, I had Pocket Qs in the big blind, raised pre-flop, and got one caller who had about $200 in his stack.

I have a hard time faulting your play. You (correctly) raised pre-flop and then raised again after a good flop for you. If you raise the turn and the guy comes over the top, you're probably pot-committed with an overpair and get the same result.

But how do you get away from his turn shove after you checked? He could just as easily have been trying to buy the pot with eights, nines, Jacks, or some kind of Ace. (I've seen some really goofy holdings online and I understand the live players are even worse.) You are giving away too much EV if you routinely fold Queens in that situation.

It's impossible to believe he had a player-specific read on you after just five hands. The key is in your post-hand analysis. Specifically "When the flop came out, the opinion [that I had a high pair or AK] would have grown even stronger since I bet again post-flop, feeling confident with an overpair and trying to buy the pot right there instead of risking Mr. Caller tripping up on me (leading to his conclusion that I didn't likely have trips myself)."

This is why I almost always bet flopped sets and trips. (As a point of clarification, a pocket pair and one on the board is a set. A pair on the board and one in your hand is trips.) It's too easy to be read as trapping with a set if you check the flop and raise the turn after raising pre-flop. And if you get a chance to show down a set after betting pre-flop and post-flop...well, you really put the fear of God into your opponents, because most of them won't play it that strongly. His read was based on your being a typical player regarding flopped sets. So don't be a typical player! [Soapbox mode = off]

Let's talk about his pre-flop play. What in the wide world of sports was he doing pre-flop??? You were the first raiser out of the BB, meaning he called (probably with several others) pre-flop. If you just call instead of raising with your Queens, now he's going up against 3-5 other hands, depending on how loose the game is. With that many opponents there are too many ways for him to get beat if there isn't an Ace on the board.

As I noted, your pre-flop raise was correct. Try to isolate a middle pair or some kind of Ace (just not AA!) while creating a bunch of dead money in the pot.

I think you pretty much played the hand correctly, given that you can't really have a read on him after just five hands. His play was absolutely awful. This is a classic case of needing to judge the process, not the results.