My last two poker/gambling articles were literally more positive than this one. My first was about winning a major poker tournament when I was 22. My second was about how winning nearly $200k was paradoxically one of the most painful days of my career. Despite the second article being emotionally painful for me, I still won a lot of money. This one is instead about an extended losing streak I am currently experiencing.
My Average Day Lately
I wake up with purpose: I’m motivated and intent on success. Before starting work, I go through my daily morning routine to clear my head: I make my bed, do 10 minutes of stretching exercises which have meditational and restorative purposes, eat a healthy breakfast, walk my dog, go rock climbing, shower up, eat a healthy lunch, watch a few instructional poker videos to make sure my mindset and logical thinking is in line with other top players, and then get to work.
However, it isn’t long before I start losing money and doubt creeps into my mind. How much will I lose today? After my recent performance, it was a fair question: in the past month and a half I’ve lost roughly $60,000 with very few winning sessions booked. No matter what decision I make, things seem to go the wrong way.
Don’t pity me
I’ve still had a great year: 4 big months to end 2015 followed by a huge January and February with other strong months mixed in since to more than offset the recent downswing. Don’t get me wrong, $60k is a lot of money to lose for almost anyone, but the painful thing for me is not so much the money I’ve lost, but instead it is the steadily increasing doubt in my abilities. Have I lost it? Am I not good anymore? Did the games pass me by?
If I always won, nobody would play me
Before poker and fantasy sports came into my life, my passion was Starcraft: a real time strategy computer game where players balance economy, offense, defense, military tactics, and scouting to outplay their opponents. I played for years and despite being one of the top players in the USA at my peak, I was nothing compared to the top players in the world, most of whom were Korean. If I played them in a match, I was 100% to lose, completely incapable of winning. I would jump at the chance to play them for fun, but playing them for higher stakes would be burning money.
In poker and fantasy sports, there is a much larger luck element involved in the short term. Recreational players may have inferior strategies to the very best, but they are not incapable of winning. That’s part of the appeal: play a game you enjoy against some of the best players in the world where you have a chance to win!
Of course many of these players lose money long term, but between the enjoyment of playing, the thrill of winning against some of the best, the possibility of winning huge million dollar prizes, and room for improvement and the chance to become a winning player through hard work, losing players can still very much enjoy poker and look at it as a form of entertainment that also stimulates their brain. But none of this would be possible if winners always won. Losing is an essential part of being a poker player.
Variance
Assuming I play in games where I’m one of the better players, every session I play my average result is expected to be positive, but with a large standard deviation. The exact numbers vary greatly based on length of session, amount of money risked, strength of my opponents, and how well I play that day, but assuming I play 2000 hands of poker on 4 tables (which equates to roughly 8 hours of work) that each have a $400 initial buyin, my average win should be roughly $400; but it’s possible for me to lose as much as $4500 or win as much as $5500. The graph will be normally distributed around $400-500 with a standard deviation of around $1500:
I win roughly 60% of my sessions, but finishing down $1500 or more is still possible
These swings are referred to as variance. In probability theory, variance is the expectation of the squared deviation of a random variable from its mean. Variance is formally defined as the standard deviation squared, and in layman’s terms represents the downswings and upswings involved with gambling, the difference between what you expect to make and what you actually see as your results.
The poker situation I described above where dealing with losses and wins likely between -2500 and +3500 (and possibly even wider) may seem extremely swingy, but is actually the lowest variance game I play. In fantasy sports I have a higher hourly winrate, but I also have more variance. I still win 60% of the time, but the actual money won on any given day differs more from my expected performance: when I win my wins are greater than in poker, but when I lose, my losses are much worse. Unfortunately for me, lately I have been losing at an extreme frequency.
The downswing
Fantasy Golf
Every daily fantasy sports contest has a real money buyin: for instance I can pay anywhere from $0.25 to $10,600 to enter a single DFS contest. The rules for making a team are pretty simple: each athlete has a set salary, make a team of athletes while staying under a set salary cap, get points based on how they do in their real life games, and the fantasy team with more points wins.
In golf, the salary cap is set at $50k and every player needs to choose 6 golfers, for an average price of $8333 per player. The strongest golfers cost roughly $12.5k and the weakest ones in the field are $5k to draft. You can pick any golfer in the tournament, but due to this salary cap you cannot have all the best players. So an underpriced $7k player is more valuable than a slightly better player who may be overpriced at $10k because despite being a weaker player, he allows you to field an overall stronger team.
The first 3 months of the fantasy golf season I steadily won and built up my confidence as one of the better daily fantasy golf players in the world.
2-3 months of winning before the shit hit the fan
The downswing all started during The British Open: one of golf’s four major championships which took place July 14-17. Think of it as the golf version of Wimbledon.
After hours of research on the course set up, how players had done on similar courses and this one in the past, checking the weather, recent form, sportsbook odds, and crunching projections, I came up with what I thought was the best possible lineup of golfers. Every golfer was extremely underpriced and I had a few of the best in the world. Because I liked my lineup so much I invested more than usual, trying to push a larger perceived edge than I have in other weeks. Unfortunately my most important player (the lowest owned guy relative to the people I was playing against) did terribly and there was no recovering. I invested over $20,000 and got back pennies on the dollar.
Two weeks later was another major championship. Once again I created the optimal lineup: I had Rory Mcilroy and Dustin Johnson, two of the three best players in the world and the most likely people to win the tournament alongside some of the best value plays in the event. Again I invested more than an average week due to the strength of this lineup.
Dustin winning a major championship just 4 weeks prior to his epic fail when I owned him
Both Rory and Dustin played awful and despite all of my cheaper players exceeding expectation, because my two most expensive choices failed miserably, I was doomed. I lost another $12,500.
This has basically been the story for me in 6 straight weeks of fantasy golf. I believe in 5 of the weeks I made near perfect lineups, and played badly in 1 week, but the result was always the same. Daily fantasy golf is extremely high variance: if just one of your golfers fails to make the cut that can ruin your entire week.
The losses in golf over this 6 week period total to around $40,000. Despite winning over a longer period of time at the start of the season, because I went bigger in these 2 majors and lost another 4 weeks after, I am now down overall on the 2016 golf season.
Fantasy Baseball
I play DFS in 4 sports: basketball, football, golf, and baseball. Baseball is my weakest sport of the four. Just as in golf, I started off the first 3 months of the season winning. But around the same time as the British Open I started losing money.
Unlike in golf where I attribute most of my losses to bad luck and variance, my fantasy baseball losses come from a number of things: traveling and taking weeks off and not playing every day while around so I’m less fresh and sharp on what’s happening in the league, less passion for baseball than the other sports I participate in, and I’m relatively worse compared to other top players. Every day my lineups were similar to other top players, but the small differences always seemed to matter, and my players came up just short.
While I do believe I was unlucky over a stretch of a few weeks to lose almost every day with similar lineups to other players that were winning, the other factors probably played a larger role than luck, so I decided to stop playing more fantasy baseball in 2016, and ended the season on a roughly $20,000 downswing.
Putting it all in perspective
So while I’ve been losing consistently for a month and a half, there are positive things to take away from this:
- I actually won money in poker, but only played 30-40 hours and didn’t play high enough stakes to offset the other losses.
- My process in golf is strong, I just got unlucky at the wrong time of the season. While it’s extremely unlikely for a winning player to lose 5 consecutive weeks (I believe 1 of the weeks I made mistakes), it’s not impossible, it will still happen roughly 2% of the time, and I think most of my choices had positive expectations.
- While the baseball losses were less due to bad luck and more due to bad play, I am cutting this out of my routine and will be concentrating on things I am better at.
- I won consistently for 18 months prior to these 6 weeks
Am I mentally beaten down? Absolutely.
But despite some of the self doubt, I’m still confident in my abilities. A 6 week downswing, mostly due to 5 bad weeks of golf and something I’m less skilled at in baseball, does not erase 18 months of DFS success in a 10 (never had a losing) year career as a gambler, and I’m going to keep pushing forward and working hard. Winning in poker and knowing I've been on the wrong end of luck in golf assures me that the games have not passed me by, and my sadness and frustration in this losing streak are normal emotions but I cannot allow them to dominate my thinking.
To be a successful gambler, one must not let the losses affect how he plays, and although bent, I am not broken.
My name is Ryan Daut and I would love to have you as a follower. Click here to go to my profile page, then click in the upper right corner if you would like to see my blogs and articles regularly. My interests include poker, fantasy sports, puppies, health and fitness, mathematics, astrophysics, cryptocurrency, and computer gaming.
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