Understanding Edge in Poker: Part II

In my previous column I discussed the edge concept and its application to your poker decisions. If you haven’t read it, please go to Cardplayer.com and read it before reading this column. It’s the most important concept in poker, and something you must understand to play well. Let’s continue.

The edge concept is particularly valuable whenever you’re wondering whether to quit a game. Many players, even very good ones, base this decision on nominal results, quitting when they’re ahead or stuck a given amount. They focus on having a winning day or on not losing substantially. Their decision is based on emotion, on how they feel about winning and losing. But money is generated by betting with an edge. And the greater the volume of money bet with an edge the greater the number in your recurring expected value (EV) field.

Whenever you play with a sufficient edge, you’re increasing your total EV. Conversely, whenever you play without a sufficient edge to cover your costs, you’re decreasing your total EV. Therefore you’re giving up money when you quit a good game as a small winner or play in a bad game just because you’re stuck. It’s even worse when you’re playing that bad game poorly because you’re emotionally affected or tired. In short, if the game is good, don’t quit it just to “lock up” a win.

Conversely, don’t play in a bad game just because you’re stuck. And if you’re tired, or distraught, even if the game is good, you won’t have the same edge as if you were fresh. Not only should you manage your money by playing only when the edge is large enough for you to prosper, but you should also manage your mental assets so that you wager only when you have a significant edge.

Along the same line, it’s important to remember that, while humans divide their poker results into plays, days, weeks, months and years, the cards have no understanding of the dimension of time. The questions that determine your lifetime results are: how much did you bet and at what overall edge did you bet it? Whether you start your next hand, next year or the subsequent hand dealt is immaterial. So base your decisions about when to play on when the economics are correct. Base them on anything different and at best you’re giving up something both economically and in life. At worst you’ll destroy yourself.

Lots of good poker players are lifetime losers. To some it doesn’t matter. They’re not playing for the money; they’re playing for the competitive challenge and/or ego gratification. Others just think they’re something they’re not, overstating their abilities to themselves and condescendingly underestimating their opponents’ abilities. But most often the reason they’re stuck is that they play against players who are too tough.

If you want to win money at poker over the long term, you need to play with opponents who play sufficiently weaker than you to overcome the playing costs and turn a significant profit. Your success at poker depends not on how well you play but on how well you play in relation to your opponents. For many, this creates a significant problem; almost all players put themselves closer to the front of the pack than they deserve to be.

And in order to be able to analyze poker games and assess what they’re worth, you must be realistic in your assessment of both your own abilities and the abilities of your opponents. Using the edge concept is one method of evaluating the situation by assessing what each player is earning in the game. Let’s use the $20-$40 limit hold’em “rough justice” numbers as an example. Say there are five professionals in the game and they’re all playing well, but with small edges differentiating them. The total players’ costs are $180 per hour. You assess two pros as full bet per hour winners, two more as $30 per hour winners, and a $20 per hour winner. So you think the winning players win $160 per hour between them. Add their $180 in costs and $340 per hour must come from the other four players.

Do the other four players average losing $85 per hour? If so, they play really poorly. You have to play very badly to average losing over two big bets an hour. Did you assess the equation accurately? Can the five pros really make those kinds of hourly rates against this field? I think not!

So those numbers don’t add up and you must adjust your assessment so that they do. Analyzing the game in a reverse context, let’s say two of the players lose $80 per hour, one loses $50 per hour, and one loses $20 per hour (note, he actually breaks even in the game, and just pays the expenses), adding up to minus $230 per hour for all four. The total players outlays are $180 per hour, leaving $50 per hour to be divided up between the five pros. Some of those pros are going to be very hungry or more likely in very deep debt very quickly.

The previous examples were formulated using the edge factor as a methodology for game selection. How is your edge in your current situation? Can you find a better spot, maybe even in a smaller game? If you can successfully wager two-thirds of the volume in a $20-$40 limit hold’em game and average a one-third greater positive edge than you could get in a $40-$80 limit hold’em game, the games are EV neutral. With the lower swings and lower physical and mental wear and tear, the $20-$40 game is a better economic proposition.

The right decision depends on what you want to accomplish by playing. Is it excitement, competitive challenge, ego satisfaction, or money you’re looking for? It’s a question all poker players should honestly ask themselves and adjust their decisions accordingly.
Finding the right combination of balance between the hands you play, the opponents you chose, the style of poker you covet, and how they all relate to edge is hard to quantify, but you must learn to accurately assess them to obtain your highest and best possible numbers.

You may bet more in a $40-$80 game than a $20-$40 game, but your edge is liable to be lower. You may be able to bet more money per hour in one $20-$40 game over another, but the greater action may just give your opponents a better drawing price on hands that they would play under any circumstances. The lower action game may be more profitable if you can fashion plays that take advantage of the lower action level. Tight games in which you can often bluff successfully are frequently more profitable than fast action games in which your opponents are capable of adjusting correctly to their pricing. Or more commonly, the larger prices makes their normal “weak” calls much more correct.

Think about your total edge. Can you alter your poker game or situations to adjust them in any positive way? Keep in mind that if you’re a full time $20-$40 limit hold’em player, that a 1 percent differential in edge is $20,000 per year. When you wager $1,000 an hour, in a 2,000 hour work year bets $2 million, of which 1 percent equals $20,000.
Such a dramatic effect from such a small difference is hard to perceive, but it illustrates how much small differences in edge add up dramatically over time. If you want to win the most money, you must emphasize edge, including the small edges, in all your poker decisions.

And money is how we keep the score! ♠

Roy Cooke played poker professionally for 16 years prior to becoming a successful Las Vegas Real Estate Broker/Salesman in 1989. Should you wish to any information about Real Estate matters-including purchase, sale or mortgage his office number is 702-396-6575 or Roy’s e-mail is [email protected]. His website is www.roycooke.com. You can also find him on Facebook or Twitter @RealRoyCooke