Do you understand how expected value works? If you do an action that has positive expected value, you will make money in the long run no matter what. You can calculate exact EV in poker because you know exactly how many (what type of) cards are in the deck and how much money it is possible to win. I have practised this many times on computer poker simulators like turbo Texas hold em, where you can apply situations over millions of hands. http://wilsonsoftware.com is where this product can be purchased and you can apply the simulations yourself. This site has plenty information on poker probabilities and EV. It is done by a PHD who is very passionate about poker math. Take his probabilities and compare them to how much money you can win in a particular situation and you can calculate EV. http://www.math.sfu.ca/~alspach/index.html Here is a link with information on EV for starting hold em hands. http://www.onlinepokercenter.com/ar...ected_value_of_starting_hands_by_position.php Here is an OK article on EV and poker in general. If you cant figure out how EV works you should probably stop trading for a while and catch up on your stats. Poker Strategy - Expected Value If you comb through poker strategy books or articles written on this website, you will repeatedly find assertions that poor poker players may win money in the short run but will lose money in the long run. The converse is true for professional and very good players. They may lose money in the short run but will generally win in the long run. Why is this exactly? It is because of a concept known as expected value (EV). Expected value is your expected return on a wager. For example, suppose you made a bet with me on a coin flip. If it is heads, I give you $100. If it is tails, you give me $1. Should you theoretically take this bet (assuming that the coin is fair and has a fifty-fifty chance of landing on heads or tails)? Definitely! There is a 50% chance of it landing on heads, meaning you win $100. Thus, your expected win is $50 (0.50 * $100). If it lands on tails, you lose $1. Thus, your expcted loss is $0.50 (0.50 * $1). Your expected profit is the expected win minus the expected loss. Thus, your expected profit is $49.50. Obviously, you will not win $49.50. You will win $100 or lose $1. However, you should view the bet as "winning" $49.50. Outcomes in gambling are influenced by chance in the short run. However, in the long run, your outcomes will very closely reflect your expected value. If we did the coin flip example a million times, your final profit would be extremely close to $49.5 million. So how does expected value play out in a poker game? The most clear manifestation of expected value is pot odds theory (pot odds, as well as implied odds, reverse implied odds, etc.). The whole idea of pot odds theory is that you should only draw to a hand when you have a positive expected value. Other examples of expected value are demonstrated in the advanced moves below. Your Hand Ac 10c Board 8c 7c 2h There are 8 players in the pot and you are the small blind (first person to bet). You check, and the player in the big blind position bets. Three players call. Should you call? No, you should raise! Why? There is a 35% chance you will hit a flush on the turn or the river. If you hit this flush, you will more than likely scoop the pot. If you raise, 4 players will call, meaning you will only be putting in an additional 20% of the pot. Thus, if this was a $1-$2 game, you would have an expected value profit of $.75 (0.35 * $5 - $1). Please realize that this is an imperfect example. The expected win only considers the flush draw. You also have overcards, which means you could easily win if a ten or an Ace falls as well. However, there is also the chance that someone may hit a full house, so you'd have to decrease it by that. Someone could also reraise behind you and knock others out, which may decrease your expected value. Nonetheless, hopefully this example shows why some fancy plays are made. Bluffing and calling bluffs depend on expected value. When you make a bluff, you should have some estimate in your head about the bluff's chance of success. This chance of success should meet with a positive expectation. For example, if the pot is $100 and I make a bluff of $50, I need at least a 33% of winning (assuming I have 0% chance of winning if I am called). This is because I need to win 1 out of 3 times in order to break even. Expected value also helps clarify the differences between big mistakes and small mistakes. Big mistakes occur when a player makes a decision that has a very high negative expected value whereas a small mistake is when one gives up a small amount of expected value. See When to Fold for more detail about situations where players make small or big mistakes. If you plan on playing poker a lot, you should eventually be able to know your expected value of an hour of play. In order to do this, you need to keep accurate records. You should record the amount of time you spend playing, the type of game, and the place where you played. You can do this using specialized poker recording software, such as Check Your Bets. After a while, you will be able to reasonably estimate your expected win or loss per hour of play (you need to log at least 200 hours at a given location/limit to have a decent estimate). Expected value is another reason why you should never play in a poker game that you cannot afford. If you play with scared money, you will be reluctant to play when you have a small edge. You will give up a lot of expected value on some hands, which will probably turn you into an overall loser.
I have gambled for over 15 years... I started with baccarat and devised MANY money management and playing strategies that had veering degree's of success. I then moved on to card counting which was real but yielded to much work for the return (about $10 per hr these days). I have recently taken up controlled dice throwing with Craps (the verdict is still out on this) in the last 7 months. All the time I've always played live and now online poker. NET NET NET after 15 years I have lost money, mostly because there is always a learning curve and that's expensive and then once you master the game and finally become profitable the Casino changes all the rules and it's not worth the effort. I've had lots of fun though, travelled the world met a lot of very interesting people .....and my losses have been acceptable to me. Johhny Walker - The Fly in your ointment is that even though the probability is fixed in poker the amount you loose or win per hand is NOT. Think about that for awhile ;-)
I am a professional gambler and I can tell you 100% that if you are enjoying the gambling then you probably aren't doing it right. I am saying that is ok for you to be compulsive about it as long as you are playing with an edge against the house. Otherwise you are just gambling. It is hard work to find an edge against a casino, execute it flawlessly and then be able to play long enough to get into the long run. You also must size your bets so that you won't go broke first. Very much like trading. I will say that it is easier to make money in gambling than in trading. The counterparties in casinos aren't as sophisticated as those in trading. Problem is that gambling doesn't scale up very well. You can make 100% on your first 100k but your ROI goes down quickly after that. Traveler
LOL Your going to take a lot of heat on this post BUT I agree with you with you 100% the only reason that I put the majority of my effort into trading is because OF the scalability. Care to share with us your game ??? Cards, Dice ????
thanks for the lesson on EV. i think someone mentioned it to me in grad school. but just by knowing your current expected value doesn't mean you will be profitable in the long run in a game like poker where bluffing is an integral part. by your arguments then all options traders should be profitable in the long run because they know their expected value. I am still curious to see some verfied data that says in the long run a poker player with strict playing is profitable. if you can show me that, I will write a program to take advantage of every online poker site on the net.
An interesting gambler story: http://www.lasvegasadvisor.com/frugalfridays.cfm?FrugalFridayID=331 http://www.lasvegasadvisor.com/frugalfridays.cfm?FrugalFridayID=332
Exquisite zxcv1fu, That guy's not a gambler, hes a day trader. What a beautiful story about an edge and money managment. Thanks.
I played poker as a semi-pro for ten years, I had a little problem with other games too (craps, BJ etc) so like Sam (from Cheers) an ex-alcoholic got myself a job in a casino. I am mostly writing now and will one day write a paper on gambling called "Lady Luck is a fickle Bitch and her name is Karma"
Come to California and play 2/4 Texas Hold em. There is absolutely no need to bluff in these games, usually at least 8 people take the flop. The people playing these games are so bad that straight forward poker theory and a bankroll is all one needs to win. There are already people using POKER BOTS in online poker games but the casinos supposively eliminate them and tell the public they do not exist. The University of Alberta has developed a machine that can play tougher higher stakes poker games called Vex bot. Here is quote and link about it. http://www.cs.ualberta.ca/~darse/Papers/AAAI99.html "5.1 An Expected Value Based Betting Strategy Loki-2âs new betting strategy consists of playing out many likely scenarios to determine how much money each decision will win or lose. Every time it faces a decision, Loki-2 invokes the Simulator to get an estimate of the expected value (EV) of each betting action (see the dashed box in Figure 2 with the Simulator replacing the Action Selector). A simulation consists of playing out the hand a specified number of times, from the current state of the game through to the end. Folding is considered to have a zero EV, because we do not make any future profit or loss. Each trial is played out twiceâonce to consider the consequences of a check/call and once to consider a bet/raise. In each trial the hand is simulated to the end, and the amount of money won or lost is determined. The average over all of the trials is taken as the EV of each action. In the current implementation we simply choose the action with the greatest expectation. If two actions have the same expectation, we opt for the most aggressive one (call over fold and raise over call). Against human opponents, a better strategy might be to randomize the selection of betting actions whose EVs are close in value. Simulation is analogous to a selective expansion of some branches of a game tree. To get a good approximation of the expected value of each betting action, one must have a preference for expanding and evaluating the nodes which are most likely to occur. To obtain a correctly weighted average, all of the possibilities must be considered in proportion to the underlying probability distribution. To select the candidate hands that our opponent may have, we use selective sampling."