I've been meaning to make a post about my experiences with online poker since that old thread you mentioned. Several people were interested, but I never took the time to write it out. So, I'll write about my experiences here. I'll also write about how a pro poker player sees the game, and how to become an expert. This could end up being a long post.

My GF and I play poker for a living. Almost all of our play is online Holdem for a variety of reasons I'll explain.

Prior to becoming poker players, my GF and I had played professional blackjack for a year and a half. It was a lot of fun and good money, but I started getting barred from casinos. While counting is not illegal, the casinos will not allow anyone to play if they have a mathematical edge in the game. If they detect you are a winning player, they inform you that you are no longer allowed to play. On one of our trips, we saw the 2003 World Series of Poker on TV in our hotel room. It was exciting TV, and we could see that Holdem was going to become very popular as a result of this show. Since they were barring me from blackjack and I was almost certainly already in the infamous Griffin Book, I could see our days as pro blackjack players were numbered, or at least become much more difficult. I decided to research poker, and especially Holdem poker.

I learned a few very important things about Holdem quickly. First, you are playing against other patrons, never against the house, so the house doesn't care how good you are. There is no risk of being barred for being an expert poker player. Second, it is possible to play poker with a consistent edge. In fact, the edge is significantly larger than our blackjack edge, and the variance is considerably lower. This has tremendous implications for the professional gambler, as I will describe below. Third, you can play poker online, playing multiple games simultaneously in different windows. This means that you can play a lot of hands. This is an important factor, and I will talk more about it later. Fourth, there are resources available to learn the proper strategy.

Actually, it turned out that almost all of the resources available to learn poker strategy are complete garbage. Getting in to it seriously, though, I was able to figure out where to get the good information. In the process, I read almost every poker book written, and there are a LOT of them. Fortunately, 99.9% of them can (and should) be completely ignored.

From the beginning, I had a different view of poker. While I had played as a kid, like everyone, my blackjack experience caused me to have a specific goal. I was not interested in playing for amusement; I wanted to play poker like I played blackjack -- a perfect mathematical game that guaranteed me an edge. To understand what that means, you need to understand what an "edge" is to a professional gambler. It is related to a mathematical concept called "expected value", which pros call EV.

All gambling games have a random element in them. This random element makes the outcome of any one particular hand unknowable, but if one understands the probability of various outcomes, it is still possible to quantify the outcome, even if it is unknown. This is called "expectation", or "expected value". Let me quote an example from the best Holdem book out there, Small Stakes Hold 'em, by Ed Miller:

Quote:
Expectation is the amount of money that you will win or lose on average by making a wager. Say you and a friend agree to bet on the outcome of a coin flip. If the coin lands heads, he will pay you $1. If it lands tails, you will pay him $1. Your expectation for this bet is zero. You expect to win $1 half the time and lose $1 the other half. On average, this bet is break-even.

To calculate expectation mathematically, you must take an average of all the possible results, weighted by the likelihood of each one. In this case, we have two results: +$1 and -$1. Each result has a likelihood of 1/2. Thus your expectation (referred to as "EV" for "Expected Value") is 0.

0 = .5(+1) + .5(-1)

Let's say your friend decides to pay you $2 for heads, but you still pay only $1 for tails. Now your EV is $0.50.

0.5 = .5(+2) + .5(-1)

The key to winning at poker is to be able to always choose the play that has the highest expectation. In some cases, this means choosing the play with the least negative expectation. The goal as a serious poker player is to maximize your expectation over a series of decisions. This is identical to how one plays professional blackjack, incidentally -- the count model gives the highest expectation play for every situation. Poker is vastly more complex than blackjack, so it is not possible to pre-compute EV for every possible situation as it is in blackjack.

Here is a Holdem example: suppose on 4th street (after the turn card has been played, so there are 4 community cards dealt), you have 4 cards to a flush, and the Ace and one other card of that suit is in your hand. We have one opponent, and he bets into us. We want to know what to do, so we need to compute our expectation. Computing expectation involves two things: understanding the probability of the possible outcomes, and understanding the payoff of each outcome. In this simple example, we assume that we will lose if we don't make our flush, but we will definitely win if we do make our flush. That means, if we make our flush we win the pot, if we don't make our flush we lose this bet.

It turns out in this case we can compute our chances of winning almost exactly. We have seen 6 cards in the deck (the 4 on the board and the 2 in our hand). That means there are 44 cards that we haven't seen. There are two cards of our suit in our hand and two on the board, so we know that the remaining 9 cards of our suit are mixed in with those 44 unseen cards. The odds, then, of the next card being a card of our suit are 9/44, or about 1/5. If the pot is larger than 5 bets, we have a positive expectation and can call profitably. Assume that the pot contains $100 and it costs us $10 to call the bet (not an uncommon situation). Then 4 out of 5 times we lose $10, but 1 out of 5 times we win $100! If you did nothing but place bets like this all day long, you would be guaranteed to make money. Look at our expectation:

$12 = .2(+$100) + .8(-$10)

In the long run, we profit $12 for each situation like this. Notice that we are still losing most of the time. That doesn't matter. The only thing that matters is do the payout odds we are being offered exceed the odds against us winning?

Playing poker well means being able to determine the answer to that question in a huge variety of situations, almost all of which are much more complex than this simple example. Many situations involve probability-weighted logical deductions about opponents' holdings. Our simple example didn't need to consider this because we were drawing to to the "nuts" -- an unbeatable hand. In most situations, we can't know our exact odds of winning because we can't see our opponent's cards.

Logically deducing our opponent's hole cards is called "hand reading", and it is a beautiful and fascinating intellectual challenge. Hand reading turns every single poker hand into a logical puzzle. If we could become perfect at hand reading, we would always know our opponents hole cards, could always compute our odds of winning exactly, and would play "perfectly". This unachievable ideal is what provides the enjoyment to a serious player. It is not fun in the sense of a "thrill" of gambling that most players experience, it is the fun and satisfaction of solving a really complex puzzle.

One becomes a serious poker player when they make the mental shift away from mere entertainment and begin to try to maximize their EV and play in a profitable way.

Poker is a strange game. The rules of the game are such that in the short term one can make poor EV decisions and still win, or make great EV decisions and still lose. This is due to the randomness of the game and how the rules are structured. In the long run, however, it is impossible to win without making EV-centric decisions, but the long run is really long. People can (and do) play incorrectly for thousands of hands and win simply due to the high fluctuations that occur in the game.

The balance between skill and luck in a game has a mathematical term: variance. It's actually a statistics term. The best gambling games have a high variance which means that a player can do everything wrong and still book a huge win -- if they are lucky. Craps and blackjack are both extremely high variance games, but the rules are such that in every single situation the house has +EV on every wager (the exception being a card-counter in a good blackjack game). The high variance means that short-term results will be almost entirely a matter of luck, while long-term results are entirely a matter of skill (which is just another term for EV). This messes with the human learning process, which seems unable to handle true randomness. Humans are constantly looking for patterns, even where they don't exist. The variance also provides another thing that screws humans up: intermittent reinforcement. Combine this with the silly and romantic notion that some people are "naturals" and you've got the reason why millions of people gamble. Don't be fooled by all these things. I promise you that if you have not studied how to make +EV decisions in poker, you are NOT a winning player and your winning has been variance. That sounds harsh, but its true. You can't beat blackjack without counting, and you can't beat poker without playing a tight game focused on EV.

The discussion about EV explains why I am attracted to online poker. If one is making consistently +EV decisions, the only limit on how much you make is how many hands you can play. In a live poker room, a fast dealer will deal about 35 holdem hands per hour. Online the shuffling, dealing and pot-pushing are instantaneous. Games range between 60 and 100 hands per hour. Since playing a +EV game of holdem means playing around 17% of your hands, in a live game one will only play 5 or 6 hands per hour. Remember that you lose 4 out of 5 turn flush draws and you can see how a lot of time can pass before you make any money. But online, you can play multiple games simultaneously. I routinely play 5 or 6 games, which means I almost always have an active hand to play. It also means that I'm getting well over 400 hands per hour. My hourly rate is thus over ten times higher than playing in a live game. What all of this means is that it is possible to make a living in the lower limit games if you play online. To play live games professionally, it is usually considered impossible below $15/$30. In comparison, I know a guy making $11k per month playing $3/$6 online thanks to multi-tabling.

There is another major advantage to online poker. Every time you play a hand of poker online, a text file called a "hand history file" is stored on your computer that contains all of the events of the hand. There is a fantastic piece of software called Poker Tracker that reads these files into a database. Not only can I review every single hand I've ever played online, but I can view statistics about my game to look for areas where I can improve my EV. Most importantly, however, I also have statistics about my opponent's play. Using another bit of software called PokerAce HUD, I can display these statistics as an overlay on the tables while playing, which provides me with so much data on my opponents it's staggering. I know how many hands they play, how often they raise, how often do they fold each street, how often do they go to showdown, when do they checkraise ... it goes on and on. In a live game I need to keep track of all that myself, and that's a lot of work.

To become a winning poker player, there is only one place to start. It's with the book I mentioned above, Small Stakes Hold 'em, by Ed Miller and David Sklansky, which is referred to as SSHE among serious players. David Sklansky is a name you're going to get to know, because he is THE authority on the mathematics of poker. He is the author of what is considered the most important book on poker, Theory of Poker, which should be the second book you read (after re-reading SSHE about a dozen times).

If you play as described in SSHE, you will be able to beat online games up to about $3/$6. That's because these games are mostly "money and odds" games where hand reading is not so important. Beginning at $5/$10, hand reading becomes much more of a factor, and this takes experience. One caution, ignore the "loose" preflop strategy in SSHE if you're playing online. Online games are tougher than live games and considerably tighter. Use the "tight" preflop recommendations.

SSHE, Theory of Poker, and Holdem Poker for Advanced Players (also by Sklansky), are all published by 2+2. 2+2 hosts a BBS dedicated to the discussion of poker strategy. It is THE place to learn poker, and is the only resource you'll need other than SSHE. It is possible to learn how to beat middle-limit and even high-limit games by reading and contributing to the 2+2 Forums. It is widely acknowledged that the best players in the world are almost exclusively "2+2ers".

Before you set up a lot of online poker accounts, you should be aware of something called "rakeback". Poker sites pay a commission to people to attract new players. The commission is a fraction of the rake you generate as a player on the site. The people collecting the commission are called "affiliates". Some affiliates will share their commission with you if you sign up under them. Since they are paid a percentage of your rake, this is called a "rakeback relationship". Poker sites officially forbid rakeback, so its an under-the-table deal. It's also worth thousands a month -- on top of your winnings.

Last year I saw Charlie Rose on PBS interview the amazing poker player Chris "Jesus" Ferguson. Ferguson said, "I think poker has a lot to offer someone." I agree 110%. It can be very emotionally challenging, and it is a tremendous intellectual challenge. I got some coaching from Bob Ciaffone, a professional poker player, Life Master bridge player, and International Master chess player. He told me, "Holdem is more complex than either of those other games." I didn't believe him at the time, but as you learn more and more about the game, it just becomes more complex and fascinating.

Barry Greenstein, considered one of the best (if not the best) cash-game players in the world, describes three levels of development of a serious poker player. First, one masters the math, odds, starting hands, and other fundamentals. At the first level, you pretty much play every hand and situation in a consistent way. Second, one adjusts their play based upon their opponent in the particular hand. Third, one learns to randomize how they play the same hand against the same opponent, since the opponent is now good enough to learn your consistencies and read your hands with a high degree of skill.

SSHE will get you to the first level, which is enough to beat any small stakes game. The 2+2 Forums and experience will get you to the second level, which, according to Greenstein, is enough to win up to $300/$600. Above $300/$600 is the realm of the truely world-class players -- and they don't discuss their strategy much. If you want to know what that's like, read a great book called The Professor, the Banker, and the Suicide King, by Michael Craig. It's a great book and a really interesting look into the best players in the world, whose "normal" game is the Bellagio $4000/$8000 mixed game. The book tells the story of the pros taking on a billionaire banker who wanted to play big -- $100,000/$200,000 limit Holdem.

You should buy Poker Tracker and PokerAce HUD immediately. I have some charts from SSHE you can print out, and some articles, and links to the best 2+2 articles. Send me an email to jrcampbe <at> visi <dot> com and I'll share this stuff with any of you guys.

It is possible to make a TON of money playing online poker. I could regale you with many examples of people I know personally. It's a great hobby and a great challenge. I hope this helped some of you guys get going in the right direction.

I'll watch this thread in case anyone wants me to go into more detail on any of this stuff.

Best,

Jim