A lot of people have been setting yearly poker goals this month. I think it's a good idea to have goals and ambitions in general, but I'm also aware that most people's new year's resolutions are often broken within weeks, if not days. Maintaining motivation for a whole year is pretty tough, as evinced by the low number of PSO members that kept up with last year's Time Vault promotion. (Congrats, by the way, to everyone who kept up with the challenge for the whole year! I doubt I would have managed it, especially since I had a burnout even without the pressure of being locked into the Time Vault).
I've not yet decided on my own goals for this year, but I'm sure about one thing: I won't be aiming to win a specific amount of money. This blog was inspired by a very interesting debate about goal-setting, started by royalraise85 in his "rant thread". I took part in the thread, but I want to clarify my position here. I think that using the S.M.A.R.T. criteria is generally a very good way of defining and tracking goals in the business world and many other activities (e.g. a fitness regime), but the problem I see it with SMART goals as they apply to poker is the way we measure success. Poker achievements cannot be measured very accurately, because of the luck factor, as pointed out by Ovalman.
A couple of quick examples:
Ryan Riess is the reigning world champion at no limit holdem. Was he the best player in the tournament? Only in his imagination!
Nik Heineker only played 68,.000 cashgame hands online in 2013, and ended up over six million dollars in profit; more than double his nearest competitor. Is he twice as good as Ben Tollerene or six times as good as Ike Haxton? Of course not!
Jason Mercier hasn't won a live holdem tournament for two years! Is he a fish, or what?
Beginning players tend to obsess over bad beats. Seasoned pros will advise them "Don't be results-oriented", and I think this advice should be carried forward to when we are looking at results over a whole year of play, or when planning ahead to the next.
One of the reasons I don't favour setting a monetary goal is because - in a game where luck plays a significant part - past results have little correlation with future expectations. To believe otherwise is to suffer from the gambler's fallacy.
I very much approve of ImpactPoint's post about not being results oriented. That said, as quoted by TrustySam in Raiser's thread, I think Jared Tendler raises a valid point about "fear of failure". The subject of process and results goals (along with many other fascinating topics) is also debated at length by Andrew Brokos, Nate Meyvis and PSO's own Gareth Chantler in this Thinking Poker podcast. I remain convinced that results-based poker goals are usually a Bad Thing. But then I'm a risk-averse nitbox with terminal runbad.
I'm going to use the dread word variance now, and show you exactly why it is a mistake to assume that you'll make just as much money in 2014 as you did in 2013, or to base your expectations on your previous winnings.
Let's say you you were beating 10NL last year for 5bb/100, and you won 50 buyins ($500) in 100,000 hands. If you play another 100,000 hands of 10NL with the aim of winning another 50 buyins, your goal has a 50% chance of failure. DUCY? In case it's not obvious, the luck factor means you'll be above expectation half the time, and below expectation the other half of the time. Just how far above or below expectation depends on how much luck - or variance as we call it - you experience. And here lies the rub: Variance in poker can be a lot wilder than most players realise. This can be shown with the help of a variance simulator. A tool like this allows you to enter your winrate and standard deviation (a stat indicating the "swinginess" of your play, which can be found in HEM/PT4) and then it simulates a number of "random walks" around (or away from) your expected value (EV).
So let's go with a 10NL player that won 5bb/100 over his last 100k hands. If he sticks with a TAG style with a typical standard deviation of 70bb/100 for another 100k hands, what kind of variance could he experience? Here's a graph showing 20 simulations, along with the confidence intervals.
The expectation is another +50 buy-in year, represented by the black line through the middle of all that chaos. And I mean chaos! 100,000 hands isn't anywhere near enough for "variance to even out" like some people seem to think. Based on the given numbers, we can only say with confidence that this 5bb/100 player has a 95% probability of winning somewhere in the region of 5 buy-ins and 94 buy-ins, which is a pretty wide range of results. (At the 10NL level, that's a range of $890). 5% of the time, the player will be outside of this range. He could have a super-sick heater, like the 1 in 1000 chance shown by the bright blue line, winning at 12.3bb/100 (more than double his expectation) or he could have some runbad from Hell, shown by the dark red downswing. Through sheer bad luck, a player that won at 5bb/100 for his previous 100,000 hands could lose at 2.2bb/100 this year. Imagine that! You win 50 buyins in 100,000 hands and feel like a boss, and then - through no fault of your own - you lose 22 buyins in the next 100k. (For the record, about 1.2% of 5bb/100 TAGs will lose money in their next 100k hands). That's variance, and that's why past results in poker have a low correlation with future expectations.
I won't be setting a profit goal for 2014 because I cannot control my luck, and I know I'd lose motivation if I fell behind on a schedule. I'm not aiming to win 50 buy-ins or even 10. I know that - based on my previous winrate and standard deviation - I could actually lose money this year. Since I don't want to feel like a hopeless failure if I have a bad run in 2014, I won't be focusing on results. I'll be setting goals based on the things I do have control over. More on those in a future blog.
Some readers may disagree with my approach, of course, and the last thing I want to do is trample on your dreams. If you can cope well mentally with setbacks (or even thrive under the pressure of unexpectedly bad results), then aiming to win specific amounts may be fine for you. For me, however, the prospect of failing to meet objectives is just too depressing to think about. Poker is a tough enough grind as it is, so I'd recommend freeing yourself from the burden of expectations. To use one of my old clichés, focus on making good decisions, and the money will look after itself.
Good luck to all in 2014!
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