Online Poker's Big Winner

Discussion in 'Trading' started by Diamond Geezer, Mar 26, 2011.

  1. From today (Saturday March 26th) New York Times weekend magazine

    http://www.nytimes.com/2011/03/27/magazine/mag-27Poker-t.html?ref=magazine

    And some quotes:

    "Daniel (jungleman12) Cates, a 21-year-old self-made multimillionaire, lapsed economics/computer-science major and one-day Bubble Trouble champion of the world."

    And after losing money consistently:

    "Within 18 months, Cates went from routinely losing at local $5 games to winning at the highest stakes of online poker for anywhere between $10,000 and $500,000 per night. In 2010, his reported $5.5 million in online earnings was more than $1 million higher than the nearest competitor. Unlike other young poker millionaires who make the bulk of their money by winning televised tournaments — a proposition that, because of the high number of players and the unpredictability of their actions, involves roughly the same amount of luck as winning a small lottery..."

    And the (for me anyway) punchline:

    "Cates earned his stake by grinding, the term used to describe the process of pressing a skill advantage over an extended period of time. Because poker is a game of high variance, where a significant difference in ability can be mitigated by a bad run of cards, a player’s Expected Value (E.V.) must be actualized over thousands of hands. Every year, a few dozen kids go on hot streaks and take a shot at the big time. Almost invariably, these kids are eventually ground down by higher caliber players."

    Remind you of anything? I recommend reading the whole article.
     
  2. the speed at which he went from a losing nickel and dime player to the stakes at which he plays is mind boggling. I could never comprehend how thats possible.
     
  3. Good point but when I first started trading, so called mentors were telling new people that it takes 6-9 months to become proficient.

    This poker wiz is an exceptional person I'm sure you would agree so if it took him 18 months to get proficient at poker, how long would it take the average person (answer, the average person never makes it)? But those (minority) that do make it, take much longer than 9 months

    The parallels with trading and successful online poker trading are many. The NY Times article is a great read.
     
  4. kxvid

    kxvid

    What I don't understand is how these guys are keeping millions with online poker companies. How do they know their money is safe, accessible, and wont be seized by the IRS or something? The industry that is not even entirely legal, so anything could happen. Also, nobody seems to raise any concerns about the likelihood of an online poker game being fixed somehow.
     
  5. Grinding: it means you are putting in a ton of volume at a lower lever rather than playing less at a higher level.

    Not a bad idea, but is the stress worth it?
     
  6. As far as govt seizing funds and stuff, I guess anything is possible but to your question about fixed games. Yes its software and again, anything is possible but you have to look at it from the sites perspective. What incentive do they have to cheat? or rig the game? None.

    They will make far more money running an honest operation collecting the rake 7 days a week, 24 hours a day. There is way to much competition in the online poker world and if it got out (which it would eventually) they would be finished and multi million dollar operation gone. So they have no incentive to cheat players out of money.
     
  7. In trading, my edge is "high variance". Edge being the net P/L to a strategy above a ranndom entry and exit. It comes and goes, has streaks of success and streaks of losing but it is there and real and measurable

    I can get a string of bad results just by luck resulting in a drawdown of capital. This requires smart position sizing to survive those drawdowns. This requires me to grind it out.

    Cates spreads his games among many players simultaneously and plays a lot of games to mitigate this high variance reality. The analogy in trading is to have multiple strategies with modest position sizes.
     
  8. Agreed. If I had millions stashed with an online poker company, I would be looking to speak with someone directly regarding financial statements or some other assurance as to the likelihood of the company going bankrupt.
     
  9. When you have that kind of play you have the keys to the kingdom when it comes to your venue of playing, online, Las Vegas or wherever. They come talk to you.


     
  10. when i used to play at full tilt, i used to see some huge swings in the higher tables, when i would peek in just to see some games...I saw an Alias by the name of "terror of sweden" lose about 500k in about 2-3 hours of play. he would just reload , reload , reload. I've seen "durrrr" play heads up with Gus Hanson ( it could be someone else, but it was hansons avatar ) in PLO...crazy bets. like betting a car or a house...WTF
     
    #10     Mar 28, 2011