Tuesday, December 09, 2008

My Worst Poker Hand and a Trading Lesson



Last night I was sitting at a hold em table with a 10/20 blind and started with $3000. After about an hour, I was up to about $3600, without having played any big hands. Then I got the hand we all wait for, pocket aces in good position. The guy before me raised the pot to $70, I re-raised to $330 and he called.

There's close to $700 in the pot. The flop comes down 2, 3, 6 rainbow and my opponent puts in a $700 bet. I know from playing with this guy before that he's willing to make big bets with nothing more than top pair, so I raise him up to $1400. He not only calls, but puts me all-in. There's over $7000 in the pot. I call and he's got an A-6. The only way I lose is if another 6 comes down. Thus, I had about a 95 percent chance of winning a huge pot.

Unfortunately, he hit a 6 on the river. I lost my $3600. I pride myself on being "zen" and taking emotion out of things like poker and trading. I trade and play poker based on probabilities and risk, but I couldn't control my emotions here. I was pissed. I told the guy that it sucks that a bad player gets paid off for playing stupid (I wish I could take those comments back).

I should have taken my loss and went home. Instead, I put down another $3000 and played for another 2 hours. By the end of the night, I had lost another $900 making bad plays. I was what is referred to in the poker world as "playing on tilt", making bad decisions because I was pissed.

Can you see how this related to trading? Have you ever taken a loss off a great setup, only to get upset and then start making bad trades? If you have, take heed from this poker lesson: never play when you are emotionally off balance because of a losing hand.

11 comments:

FeirFactor said...

I love these poker posts! That's a terrible bad beat. I'd be steamed too.

I feel the same way: there is a lot in common between poker and trading. It's all about probabilities and pressing when you have an edge. Otherwise, be patient and wait for your spot.

Ron Sen, MD, FCCP said...

Outstanding (and expensive) lesson.

. said...

Board 2c3d6h: AsAh (90.61%) Ac6d (9.39%)

Not quite 95%; even by the rule of 4 and 2, he has ~8%. And he has tie outs if it comes running 4, 5.

Good point though, emotional control is hugely important in both trading and poker.

Chris said...

Thank you for sharing that. It happens to the best of us, and I admire your integrity for sharing rather than hiding. Finding a way to tap that zen in the critical moment is such a key component of risk management.

CardPlayerDotCom said...

Nice, I always like it when people make logical connections between poker and the stock market. It's always been my favorite comparison for people who lump poker in with games like craps, roulette, or slots (or even, to some extent, blackjack). I've posted a link to this blog on the Card Player FaceBook page and the Card Player Twitter account. How's that for cross-pollination? Haha.

Casino fan said...

It always sucks losing on a nice pocket hand like that. The other day I went all in with pocket kings before the flop only to lose against pocket aces. But i guess thats the game. You can find percentages of the win rate for pocket hands at www.poker-play-site.com/texas-holdem.html

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