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visit MIT OpenCourseWare at ocw.mit.edu. KEVIN DESMOND: All
right, everyone. So welcome to 15.S50,
Poker Theory and Analytics. So this is going to be
Monday, Wednesday, Friday from 3:30 to 5:00. I just got a room for a
review session on Tuesday, Thursday for anyone who needs
to catch up a little bit. The class is here, 4370. I'm Kevin Desmond. I'm going to be the instructor. Paul Mende is the
faculty advisor. And this is worth
three H credits. The game play aspect--
so this is what I did. And I think this is really cool. So Poker Stars gave us our own
private league for only MIT people in this course. And my goal here is
to separate people who are fairly new from people
who are very competitive, because I don't want someone not
to pass the course because they happen to be not
that great at poker. So I created this thing
called the Beginners' League. And these are going
to be Daily Turbos. Turbos means they're
fast-ish tournaments. And to get the game play
credit, you can cash, you can make money
in one of them, or you can play in 10 of them. So those who are struggling
can get this game play credit by playing 10 tournaments, which
is about a 10-hour commitment. Let's go into the
game play aspect more. So Poker Stars created
this private league for us, which is really cool. So Poker Stars is generally
considered the most reputable online poker site. That's why we use them. So they have two
different types of games. So they have real money
and play money games. Now if you're in the US,
you can't do real money. It used to be something
that was very gray area. And then there was one
poker site which turned out to be legitimately like a
Ponzi scheme, and as a result, now poker in the US is like
much more black and white, definitely not OK
for real money. However, their play money
scene is pretty resilient, and that's what we're
taking advantage of here. The Poker Stars play
money scene is broken down into two different things. They have public games, where
you can just go and play for play chips against anyone
in the world, which is cool. And you can do that,
and I recommend you give it a shot just to
get used to the software. In addition, you
could do home games, which is what we're
generally going to be doing. That's what they call
their private leagues. So in the private leagues,
in their home games, they have this showcase. And you might notice
as soon as you log in that the MIT League, Poker
Theory and Analytics, is already at the top. That's not just for us. That's for everyone. Anyone in the world who
logs into Poker Stars and looks at home games
has the MIT League at the top, which I
think is really cool. So to access this, I'll send
a more specific instructions later. I gave you guys just the
passcode of what you need. But to actually get
there, what you need to do is, you log into Poker Stars. You go to this button,
which is a little house, to access home games. And then you want
to join a game. And what you do is, you put
the Club ID, which is 557832. You put the invitation
code, which you're all going to have on Stellar. And then you put your real
name, preferably the one that's listed in the course,
because I actually have to approve everyone
that joins the league, and I can't do it just based
on someone's screen name. And I guess you have to
agree to some sort of terms and conditions. So let's talk
about hand history. So a lot of analytics
are going to be based off of hand histories, which are
just text files that Poker Stars gives you to the extent
that you indicate that you want to save them down. So these are kind of
jumbled messes of text. Each line just shows
one thing that happens. And you might get
used to reading it, or might not,
depending on how much you're going to scrutinize it. But more importantly,
you can use these in all the data
analytic programs that we're going to use. In particular, Poker
Tracker runs off of that. You'll load just thousands
of hands into Poker Tracker, and it'll do analytics for you. It knows exactly what's going on
based on that format, which is generally considered universal. And then for the sake of
visualizing these hands-- if you just read
it, that's fine. But then if you want
to show other people, I'm recommending we use
something called the Universal Hand History Replayer, which
is something that's free. And what it does, it just reads
the hands, and it plays them. It animates what happened as
if you were seeing it for real. So the deal with
hand histories is, if you're a real money player,
Poker Stars dedicates databases of hand histories so
that, if you want, you can request all your
hand histories at any time. For play money players, they
let you capture your own hand histories if you want, but they
definitely don't save them. So the reason I'm
showing you this now, and I'm going to email
it out to you later, is if you lose your
hand histories, so you don't capture
them in time, you'll never get them back. So make sure you're actually
capturing hand histories, because we're going to be using
that for a lot of the analysis we do. OK, so let's talk
about the league. And honestly, I
think this league is going to be really cool. Usually the
evolution of a player is they're terrible at
poker, and then they start becoming good at
playing against bad people. And then when they actually
start playing for real, they get crushed
again because they're used to playing against
other bad people. So this will actually
hopefully get you used to playing
against other people who are playing correctly, which is
not something you can commonly learn just from playing
around with your friends. In addition through playing
in these online leagues, you can collect stats
that you could never get from playing live. And I think this is why the
live tournament scene is dominated by online pros. It's because no live pro
can get as many hands or analyze their play in the
way that you can do online. It's not even comparable. So this is given-- even if your
whole intention is to only play live the entire rest your life,
doing this type of analytics would give you a chance to
learn at a much faster rate and learn things that
you would never see live. So every week we're going to
have a major tournament, which is basically going to be
the same structure, maybe a little bit slower, than
the ones we do daily, except they're going
to have real prizes. So Akuna is giving us, for
their first tournament, Beats headphones. And Apple TV, Bose speakers
and a lot of gift cards. And then for their
second tournament, they're giving us
all of those things plus an iPad Air
and an iPad Mini. But we're not done yet. Because this class is
focused on playing live, we're going to end the
class with a live tournament sponsored by Optiver
on the 31st, which is the day after the
last day of the class. So after the league's
over, and after you guys are good at poker,
you'll have an opportunity to play each other in a live
tournament, where their prize pool is all of the Akuna
prizes, plus a PlayStation 4, plus an iPad, plus a
Kindle, and plus a GoPro. I want this to reflect
the type of things an online, multi-table
tournament player would do. How it normally works is,
during the week, and basically every single day, there
is a uniform amount of tournaments that will
just run every single day at the top of the hour. And these pros will
just grind those out. They'll get used
to the structure. And that's where they'll
kind of grind their teeth. And then on the
weekends, that's when you get a lot of the square
money, a lot of the newer guys who only play poker
on the weekend. And those are more gimmicky,
idiosyncratic tournaments, but also the highest value. So that's why I'm producing the
tournament structure like this, where the bulk of
your tournaments will be very similar
to each other. But then the tournaments
that really matter will be completely different,
at least relatively different. So that's why I'm doing that. That'll make you
get a feel for what these guys have to go through. So let's talk about turbos. Turbos let you focus on
pre-flop decisions, which are the area where I
think there is the most to learn among people
who are new at poker. Basically, all of
your value that you're losing in tournament is
from screwing up pre-flop. No one gets that right live
because it's really difficult to be able to feel comfortable
doing what's generally considered right. And we're going to spend
a lot of time on pre-flop. But these turbos encourage
you to do that sort of thing, because live is a
lot of pre-flop, and you're going to be doing
that in the turbos online, too. In addition, no
one wants to spend six hours doing a tournament. So I'm making these
turbos so you can be in and out in 45 minutes. And then you boot up
another tournament, or you can be done with
poker for that night. In addition, you have
the opportunity-- you can play as many
tournaments as you want. It's common for pros to do
something called multi-tabling which is they'll do multiple
tournaments at the same time. For the beginners, I'd probably
recommend you just do one. But for the regular
league, have at that. you want to do like all four
tournaments at the same time, go ahead, to the extent
that they overlap with each other a little bit. OK. So that's the end
with the prize league. So the schedule is, we're
going to go through what I'm calling basic
strategy, which are the basic axioms that we're
going to be using in order to analyze the decision
making process in poker. Then we're going to be
doing pre-flop analysis. And we're going to be doing
a lot of this, because this is really where the
value add is going to be, is getting this right. I think the way
that we can tackle this thing is kind of a
way I recommend that you learn anything complicated. So we're going to
break this down into three different sections. Fundamental concept, practice,
which are actually implementing those concepts when you have
10 seconds to make a decision, and then more advanced stuff. With regard to
concepts, I'm going to call this the basic
framework for decision making. It's being unexploitable. You want to get to the level
when you sit down at a table, every pro in the room
doesn't turn and go, I want to sit at
that guy's table. You want to be a
slightly winning player way before you want to
become a huge winning player. In order to let you
know the type of thing that we're learning, I'm going
to label the slides with this, to indicate that this
is like a basic concept. Learn this thing
before you move on. The advanced stuff
is, once you learn how to do things-- which how
to do things is pretty broad-- we're going to learn minor
adjustments that we can do to get quite a bit
of extra money, like how to grind out that
additional half big blind an hour out of our opponents. So any real deviations
from what we normally do, in addition to meta game. Meta game is always
fun, like anything not related to the
hand to hand decision making process, like
table selection, or bankroll
management, or deciding whether or not to play. That stuff is really
fun, and that's to be indicated
by this ace here. OK. So I'm going to label those
slides for anything that's considered advanced, and stuff
you should only really do when you get the concepts down. And then a lot of
this class is going to be focused on practice, which
is how to actually implement these concepts on a day to
day basis when you're actually playing, especially live. We are not going to have
all the information. We're not going to
have calculators, and we're not going to have that
much time to make a decision. So how to apply these in real
time, making rules of thumb, figuring out what
you can just ignore and what you have
to definitely do, and then some the
psychology stuff related to actually performing
live is going to be what I'm calling
practice, which is going to be indicated by
that poker chip with a P in it. Let's talk about what I'm
bringing to the table here. So this course is
primarily going to be from my perspective. And the decisions about what
I'm going to teach you here, and the value calls
I'm making, is going to come from what I
consider the appropriate way for someone to play poker. So my background is that I
was an online multi-table tournament grinder, not
because I was a great pro, but because I sat
more than I played. I was definitely a
person who did not play every single tournament. I told you the World
Series of Poker has like 25 different
tournaments. 10 are Texas Hold'em. And then they have an Omaha
tournament, and a horse tournament, which is
a combination of five different games. And what is common is
that any pro who plays one plays them all. I consider that ridiculous
for someone who's actually interested in making any sort of
money or career playing poker. So I'm definitely someone
who prefers identifying value and monetizing it. So anyway, that's
the perspective that I'm going to be
teaching this course from. I like ROI. It's a great efficiency metric. Usually you try to maximize
your ROI up until the point where it's below
some sort of hourly that you set for
yourself, because one of the ways you supplement ROI
is by moving down in stakes. Usually lower stakes
are easier games. You should have a
higher win rate. But that win rate's multiplied
by a much lower number. So usually you're going to move
around in stakes until you have a good ROI, but hopefully above
what you consider your lowest amount that you can feel
comfortable earning. In addition, I want to
focus on live tournaments because who knows what's
going to happen to online? Whereas I think live
tournaments are very social, they're very public. Everyone knows who
wins live tournaments. So I'm going to teach in
a way such that focuses on these types of values. OK. So let's move on to some
of the concepts and tools that we're going to learn. So we're done learning about
what we're actually going to be doing during this class. So let's learn a
little bit about poker. So first thing is, we're going
to be using PokerTracker a lot. So I'm going to
email out exactly how to install this thing. PokerTracker has
donated 115 licenses to their product for us. And then our next
lesson, on Wednesday, is going to be Joel
Fried teaching us how to use this thing and going
through some of the analytics. So one other thing
that I like using is the Universal Replayer. And what this thing does is it
just visualizes hand histories. So you'll feed it a hand
history in a text file. It animates it. It probably does other
things, but it's free. And this thing's been
around for a while. I've not even sure if
it's supported anymore. But it's a thing
that I'm used to. So this is what it looks like. So you give it a
hand, and then it reproduces what you might
have seen if you actually played that hand. So let's move on to a concept. So stack size. So this might seem
fairly simple, but we ought to make sure we're
talking about the same thing when we go through this. So your stack size,
it's the value of the chips in front of you. So that's fairly normal. But we have this thing called
effective stack size, which is what we're usually going to
be talking about when we refer to stack, which is the
minimum of your stack or the next biggest
stack after you. And the way to
think about this is the number of chips you could
possibly lose in this one hand. That's what your
relevant stack size is. And the way you make decisions
will depend on your effective stack much more
than anything else. So an example of
this would be, say you're in a heads up situation
where you're the hero here on the small blind. Big blind has,
whatever, 300 chips. And you have some amount
of chips with queens. So if you have 1,500
chips, and so does he-- say blinds are like 10/20--
you have, what, like 50 times the blinds combined here. So this is a pretty
different hand than aces. Why? So say that you raise with
queens, and then he raises you. So you raise to 60, he raises
you to 200, you raise to 600, and he pushes to 1,500. Your queens are probably not
really that good anymore. It matters how many
chips you have here. However, if you have 300
chips, you raise with queens, and then he pushes over,
you can't fold that. You might as well have aces,
and it makes your hands, the way you play hands,
materially different. That's why chip size
matters in general. When the chip stack
is low, you're playing these two hands
basically identical. You're saying-- you're
just playing this range. However, when we're talking
about effective chip stack, it's the same thing, where
even if you have 1,500 and he has 300, if you
raise, he's going to push. You don't have the opportunity
to do that back and forth anymore. So you might as well
have 300 with regard to your decision making here. That's why we're looking
at the effective stack, because it really matters who
has the least number of chips, because that determines when
the action is going to be over. So really, I like this
definition the most, the most amount of chips that
you can lose in the hand. It's a lot more, I think,
simple to think about than this min formula. OK. And then we're almost always
talking about effective stack. Let's talk about Dan Harrington. So Dan Harrington is a player
whose style I very much like. His nickname's Action
Dan, which the consensus is, he just kind of gave
himself, because he's considered Mr. Fundamental, like
tight aggressive ABC player. So this playing style, this
temperament, tight aggressive, is something that is used to
characterize basic playing styles. So let's quickly go
through what those are. So there are two
different axes here. There's how often
you bet, where bet means you are
raising the stakes, so either you bet or you raise. And then here's
how often you call. Either you call a lot or
you call not that much. You can get a good feel for
the type of person someone is by what box they fill in. So these have names. So someone who's
tight aggressive, you would just refer
to them as Tag, which is like what Dan Harrington is. You bet when you have
good hands and you fold when you have bad hands. Another possibly winning
strategy is loose aggressive, Lag, where you certainly bet
when you have good hands, but you will see a lot
of cards before you'll give up on a hand. You're definitely
willing to call a lot. These, type passive, are
not pronounceable words, so the community generally
came up with different words to describe these. So a tight passive
person is weak. They're someone who you
can completely run over, because they fold when
they have a bad hand, they check when they
have a good hand. I guess they would
be called rocks. You never need to worry about
having a big losing night against these guys. So someone who's type
passive is generally considered playing
sub-optionally. And then the loose
passive people are described-- this icon,
which I forget what it's from. I think it might be from an
old version of PokerTracker, or maybe it was on Party
Poker or something. But everyone loved
seeing this icon which you could label people as,
because a loose passive person is what? They are a calling machine. That's what that
stands for, and it means that when you
have a hand, they will call all of your bets. You will extract
value out of them. But when they have
a hand, they're OK with letting you
look at your draws to make a decision about whether
by the river you have a hand or not. There's virtually no
way that these guys are making money in poker. I think it would be, like
over a realistic sample size, there's no type of player who
could fit in this quadrant and be good enough on any
other metric to actually be making money in poker. So in general how
we look at this is, we would call this
Tag guy solid ABC. That's what I'm recommending
you guys play as. Tag players, as a
quadrant, are going to be the biggest winners. Lag players, someone
who's very aggressive and plays a lot of
hands, could possibly be a pretty good winner. It depends on the
type of game, and then their opponent and their
ability to pick spots. But there are a lot
of big Lag winners. There are not a lot
of big weak winners. And there are not
a lot of calling machines, loose passive
players, who are not big losers. So anytime you see-- this is
a definition of someone who's a complete fish, a huge
donater to the game. And your ability to
recognize this type of thing will help you find
good games to play, when you see someone
doing this kind of thing. Anyway, back to Action Dan. So Dan Harrington is a
pretty good poker player. He's been around the block. He won the main event
back in 1995, when it had, like, 300 people in it. He has two World Series of Poker
bracelets and one World Poker Tour title. But anyway, so
Harrington popularized this thing called
the M-ratio, which was invented by someone else. So the M-ratio was invented by
this guy Paul Magriel, who's a backgammon theorist,
apparently one of the best backgammon players in the
world, commentator for the WSOB, World Series of Backgammon,
and eight WSOB final tables. Anyway, so he's supposedly
really, really good at math, even by MIT standards. But he invented this
thing called the M-ratio, but then it never caught
on until Harrington started doing it. All right, so
Harrington's M-ratio is your effective stack
divided by the sum of the blinds and the empties. So you'll hear
people talk about, like, oh, I had 10 big blinds,
or 15 big blinds or whatever, to talk about their chip stack. But that has a
fundamental problem. It has a lot of
different problems. One is, it doesn't
tell the story. So the usual blind levels
are like 1/2 or 2/4, where the big blind is
just twice the small blind. So that's the assumption. But if you're at a blind
level that's like 1/3 or 3/5, the number of big
blinds you have is not indicative of anything. It's not indicative of how
many hands you can see, or how much you care about
winning a pot pre-flop. So using the blinds
is bad, in addition to, once you start having,
like, if you're 50/100 blinds and you have an ante of 25, you
have basically half the stack you had before, in
realistic terms. Just to get big blinds doesn't,
in fact, earn antes at all. And that's a major problem
referring to it like that. So using M seems to
make a lot more sense. So what it is, is it's basically
the percentage of your stack that is the blinds in the ante. So it's like how
many rounds of poker you can survive if you just
fold every single hand. Of course, you're
not going to do that. Although I think that's what
he's actually getting at, because he uses M to
refer to when you have to make a move, which is not
generally how I recommend you do it. I think it's more important,
because it means how important the blinds are to your stack. The only reason anyone
plays any hand of poker is because someone
wants to win the blind. So even if you have
kings, to some extent, if you could win the
blinds, 99% of the time you would just do that. You don't really all
the time want someone to go up against you. So the blinds are really
driving the decision making process, at least pre-flop. And the percentage
that those blinds are of your stack matter a lot. If they're 1% of your
stack, if your M is 100, the blind basically
don't matter at all. Whatever happens
after the blinds is going to materially
impact your decision. Where if your M is 2, and the
blinds are half your stack, winning those seems
really important. You should do whatever you
can to kind of maximize your chance of winning that. So that's why M is
a good ratio here. And then, in addition,
for tournaments, it makes it much easier
to talk about hands without having to worry
about all the different parts of the tournament life cycle. If you have 1,500 chips
and it's 50/100 blinds, you can basically make
the same decisions as if you have 10 times as
many chips at a level that's 10 times as high blinds. You could just
divide in your head and basically make
the same decision. You don't need to
worry about doing anything different as a
result of having more chips. So Harrington
invented or brought up a bunch of other things
that never really caught on. He invented a thing called
the queue ratio, which is your stack size divided
by the average stack size in the tournament. So I guess you might use this
to get an idea of how far behind you are in the tournament. Like if your queue
is 5, you don't need to be that aggressive. But if your queue
is .2, you have a lot of catching up to do
before you're realistically going to be anywhere
near the money. I don't really make
decisions based on that. I think the community doesn't. So it never really
caught on for anything. I've never actually
heard anyone use that. So he came up with
this thing called effective M, which
makes sense, if you look at M from his perspective. Effective M, it's your M
divided by-- you multiply by how shorthanded your table is. And it gives you the
equivalent of the number of 10-handed tables
you could survive. It just means that,
say you have 10 Ms, you could survive
10 rounds of blinds. If you have three
people at your table, you can't survive for
another like six hours because you actually pay
the blind every other hand. That's what
effective M is doing. It reduces your
M proportionally. Since he's looking at this
from the perspective of when you need to start making
moves, it kind of makes sense that your M would be reduced
if you're shorthanded. But I look at M from the
perspective of how valuable it is in terms of blinds. So I don't really use that. I don't know anyone who really
uses effective M either. But he invented them, and maybe
they'll catch on eventually. So I think that's going
to be done for today. Thanks, everyone, for
a good first lecture.
