Nosebleed-Stakes Psychology

Part I of this series discussed the huge cash games at FullTiltPoker.com. A handful of young wizards are playing heads-up no-limit hold’em and pot-limit Omaha with blinds as high as $1,000-$2,000. Some pots have exceeded $1 million, and there have been several multimillion-dollar wins and losses.

These players are exceptionally talented, but some of them have irrational motives and unrealistic perceptions. They reduce their profits by yielding to their desires to prove how good they are, become celebrities, and get an adrenaline rush. They overestimate their edge and believe that they can ignore bankroll-management rules. At least one of them has already been busted, and it will probably happen to others.

Since sane recreational players won’t take such huge risks, I’ll focus on pros and wannabes. They can shoot for the stars, or grind out a living.

Of course, it’s not an either-or situation. The nosebleed-stakes players are at one extreme, and the low-stakes grinders are at the other. Most pros are somewhere in between. To make a rational choice, avoid wishful thinking and realistically analyze both poker and yourself.

You Can’t Avoid Trade-offs
Trade-offs are inescapable for most important decisions. To get A, you must sacrifice B. Pretending that no sacrifices are necessary is natural, but destructive. My book Poker Winners Are Different contains a chapter titled “Winners Make Good Trade-offs.” You should make informed choices about several trade-offs.

Profits vs. Risks: To increase profits, you must take greater risks. The critical issue is whether or not the value and probability of greater profits compensates for the higher risks. The value of each dollar decreases as you accumulate more of them. Without a large edge, it’s foolish to risk your first million to get a second million, and it’s nearly crazy to risk $5 million to get another $5 million.

Profits vs. Ego-building: Winners forego ego-building to increase their profits. Many losers sacrifice profits to build their egos by trying to prove how good they are. Since the nosebleed-stakes players are so talented, you may object to the word “loser,” but anyone who wastes his talent trying to prove something, but ends up broke, is a loser. Some nosebleed-stakes players will probably do it.

Profits vs. Status and Fame: Online players were once anonymous. Becoming famous can create income from endorsements and sponsorship, but it also can cost them dearly while playing. For example, because Isildur1 became famous, data on his play was obtained that resulted in him losing millions of dollars.

Profits vs. Testing Yourself Against Tough Competition: The desire to challenge tougher players has destroyed countless bankrolls. If you have an excessive need to test yourself, you could be headed for big trouble.

Profits vs. Developing Your Skills: To maximize your immediate profits, play in soft games. But, if you don’t sacrifice profits by challenging tough players, you won’t develop the skills needed to beat larger games. Card Player columnist Matt Lessinger deliberately made this trade-off: “I have played in games in which my EV was very clearly negative … [They] were learning experiences, and thus well worth the sacrifice. I was willing to pay my ‘tuition’ in order to get schooled.” (“Less is Back for More,” Card Player, June 6, 2003)

Smart Pros Make Rational Trade-offs
They know what they want, accept the necessary sacrifices, and balance risks and rewards. For example, they don’t pay excessive tuition by playing in games that are much too big and tough.

You also must accept the critical trade-off: To get a shot at the top, you must take huge risks. You may not just lose your bankroll, but also may feel like an idiot. Conversely, if you avoid that risk, you can’t become a top player.

Noted professional Daniel Negreanu summarized these trade-offs in “Why Do Sharks Eat Other Sharks?” (Card Player, Aug. 28, 2007) He described two fictitious pros. Larry will never go broke because he selects weak games and plays within his bankroll. Johnny repeatedly goes broke because he challenges tough players and bigger games. Larry can never become a top player, but Johnny has a shot.

He then asked, “So, after whom should we pattern ourselves in our poker careers? Well, that, my friends, is entirely up to you. … Larry … probably couldn’t deal with the idea of going broke. For Johnny, that’s just part of the learning process.”

You Must Be Brutally Realistic
If you kid yourself, you probably will choose the wrong path. You may become a grinder, get bored when you’re 30 or 40, and wonder if you should have tried to become a top player. Or, you may shoot for the stars, build up a sizable bankroll, play too high, go broke, and bitterly condemn yourself: “Why didn’t I stay where I was?”

Fortunately, you can change your mind. This change is almost always toward becoming more conservative, because people become more realistic as they get older. For example, Matt Lessinger switched from being a Johnny to a Larry because going broke and trying to get staked is “a humbling, humiliating situation, and I’m thankful that I’ll never experience it again.” (“Johnny or Larry? Which One Am I?” Card Player, Oct. 27, 2007)

Countless pros have found that they can’t get staked. So, they play in tiny games, hoping to build up a bankroll and wondering, “Why was I so stupid?” I believe that some nosebleed-stakes players will go broke and become unable to continue playing at that level. It’s hard to rebuild a multimillion-dollar bankroll, and hardly any backers put up millions.

The nosebleed-stakes players may believe that they can get staked or quickly rebuild a bankroll, but they ignore history. Stu Ungar, Nick “The Greek” Dandolos, and Johnny Moss all won fortunes and were inducted into The Poker Hall of Fame, but died broke; so have many other high-stakes players.

Young people often ignore this sort of lesson because they think, “I can do anything.” Nonsense! Everybody has limitations, and only fools ignore them. The top poker players are as different from the average pros as superstar athletes are from the average ones. If you don’t have the great players’ gifts, you should accept it and work within your limitations.

As they get older, most people slowly and reluctantly accept their limitations. They realize that they can’t become president of the U.S., professional athletes, movie stars, and so on. So, they make more realistic career decisions.

Should you give up your dream of becoming a top player? Not at all. If you’re young, resilient, fearless, and have no responsibilities, test your limits. Learn whether or not your dream is realistic. Challenge the tougher players, move up to the bigger games, and put your bankroll on the line. However, if you repeatedly go broke, accept the painful truth: You’re not one of the unique few.

Find games that you can beat consistently, and then spend most of your time in them, winning enough to live comfortably. Perhaps you still should take occasional shots at bigger, tougher games, but don’t risk your entire bankroll. Most important of all, keep complete, accurate records, so that you don’t kid yourself about your results and talent level. Accept reality and enjoy a comfortable, profitable career.

Author’s note: I’d like to thank Lou Krieger, David Sklansky, Arthur Reber, Barry Tanenbaum, Nick Christenson, and Matt Lessinger for their help.

Dr. Schoonmaker, is the author of four poker books: The Psychology of Poker, Your Worst Poker Enemy, Your Best Poker Friend, and Poker Winners Are Different.