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1. Introduction to Poker Theory

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Jun 05, 2015

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1. Introduction to Poker Theory
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  • 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.

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MIT 15.S50 Poker Theory and Analysis, IAP 2015
View the complete course: http://ocw.mit.edu/15-S50IAP15
Instructor: Kevin Desmond

An overview of the course requirements, expectations, software used for tournaments, advanced techniques, and some basics tools and concepts for the class are discussed in this lecture.

License: Creative Commons BY-NC-SA
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