Thursday, August 30, 2007

Why Your Hourly Rate Matters

I have always said that my personal measuring stick for poker is dollars earned per hour. This is the way that I compare different games like MTTs, S&Gs, and Cash as well as different buy-in levels to see where I am most successful and can best maximize profit. Playing with this goal in mind and keeping records of your play can tell you a ton about your game. It can also tell you how you are running vs historical trends and makes it easier to see if tweaks to your game are helping or hurting.

Not everyone plays like this. The vast majority of players keep little to no records of their play and the ones that have systems like pokertracker tend to under utilize them or not understand the results. The big MTT score is glamorized by Hollywood and an abundance of TV shows on high stakes poker tournaments. I played in the WSOP, so I myself am not immune to such longings for a big score. The thing is that $/Hr is what really counts, not the value of an isolated big score. $/Hr is the only way you can possibly compare two poker players and end up with who is best. If 100 poker players worked 2000 hours a year for 20 years playing poker who had a more successful career. The player who netted 5 million or the player who had three million dollar+ MTT cashes and netted 2 million overall. The only way that you can really say you are better at poker than someone else is if you $/Hr rate is higher long term at whatever version of poker that you tend to play than theirs. Now stuff like table selection, choice of stakes and game matters, but this is part of the skill of being a good poker player. Who is better the 9th best player who is always seated with the 1-8th best players in the world, or the 10th best guy who is always against the 100,000- best players. 9th best loses money in his game of choice and 10th absolutely crushes his. 10th is actually a much better player, just ask uncle Sam.

So if you want to keep track of how your doing, you keep records that show how much money you won or lost, and how much time you spent doing it. Now Hoy actually thought that I should take my post down. The first ever such request. Let me tell you all that I am not breaking any new ground here. Read any poker book the deals with beginners. Now I know most of us our not really beginners, but too many of you skipped over this very important process that all good poker books for beginners cover. The concept of bankroll management, record keeping, and stakes selection. You are actually supposed to keep track of hours played and dollars won/lost in all of the books. I guess all the authors are wrong here. You are supposed to start at very low stakes, and learn how to beat the low levels. When your records show you are doing well, and your bankroll supports it, you move up to the next level. Not being able to beat low level MTTs is not a reason to take shots at the higher levels. I don't care if we are talking about cash games, Sit and Goes or MTTs, this is the advice that's given by all authors who are trying to help beginning players. And the measuring stick is always dollars/hour. Sometimes BigBets/Hr is used, but that is easily converted. This process is not supposed to end as you get better. There is always a higher level to strive to beat, but you play the majority of your time at a level that you can comfortably beat.

When I am talking about maximizing my dollars per hour when I play poker, I am in line with the vast majority of successful poker players. They think along these lines as well. Any real professional poker player thinks along these lines. If it was your job to play poker, can you honestly tell me you would not be maximizing you dollar/hour rate if you could? Many are interested in getting the "big score". That is fine, but don't fool yourself into thinking that you are trying to maximize your ability as a poker player. When abilities are compared $/Hr is the measuring stick. Remeber that Poker at its heart is a game about money management and limitied information. The measuring stick is money. And the rate at which you accumulate the money does matter.

So when I start questioning the value of satellites (there was a question mark in the post title) I am saying what I honestly believe. Yes, this is heavily biased towards my frame of thought towards poker, but I honestly think more of you guys should think along these lines. This is how the successful think. I started at very small stakes, and moved up level by level. I played S&Gs and did the same thing. I kept records the whole way, and knew when it was time to move up, or move back down and what forms of poker to focus on. I don't play enough right now to keep improving my game, but I am happy with where it is now as a result of this process. When I look at my hourly rates at Cash Games, S&Gs, MTTs, Token S&Gs, MTT sats, it is very easy to see that sats have the lowest hourly rates of them all. I am pretty sure that MTT sats have the lowest hourly rates for most of you guys as well. Though some losing players, can probably beat sats but not MTTs. The thing is that unless your highest hourly rate is in Satellites, and you are also fairly successful in MTTs, you would do better to play something that earns a higher hourly rate. This is pretty simple stuff. The only argument that I can really accept is somebody who can show (or at least has the data to know) that their highest hourly win rate of all forms of poker is in satellites. That would be a pretty good argument against what I am saying, but I am not expecting it. The other argument is that people don't care about hourly rates, and I see this as a problem for a serious poker player.

The other problem with satellites that I mentioned in my first post is Bankroll management. If you Bankroll is 5k it is not a good idea to be taking shots at 1k buy-in MTTs Satellite or not. You guys only remember the sat that you got a seat in. If you are taking 10 to 1 satellite shots at $100 a pop you are doing some serious damage to your roll, and you can't win any cash in a Sat. So even when you get your seat, you still need to cash or better in the MTT to restore your BR. You will also bleed your roll away, when you don't get a seat. These types of shots way above your current level are not recommended by many authors. There is also a fee for a sats of about 10% just like the MTTs charge. The 10% vig, makes it so only about 10% of players can beat MTTs longterm. This applies just as well to Sats. Only 10% of players beat these as well. I don't think I am out of line here, though I may be crushing a dream or two. You will also never know if you can really beat the higher level MTT from a single big score. You need to run the same MTT hundreds of times to see if you can really beat it. You will never find out by satelliting in, as you will never get the 100s of trials. You will find out if you ladder up to the higher levels by beating the lower ones over the long term though.

If your motivation is to improve your poker game relative to other players, then improve your $/Hr rate. If you motivation is to play poker for fun only, and look for an isolated big score or two, then take your shots and play Satellites. There is nothing really wrong with the play for fun approach, and you really should not take my posts seriously if that is your motivation. That is not my motivation for poker. My goal here is to get people to improve the measuring stick that matters if you want to go pro someday, or at least see how your game stacks up against the pros. I actually thought this was the goal of at least a subset of this community.

Below are a few examples for those who still don't get the point of my argument here.

Player A
1/2 NL Cash +$30/Hr
$20 S&Gs +$18/Hr
$10-26 MTTs +2/Hr
MTT Sats +3/Hr

This player should earn MTT buy-in by playing 1/2 NL Cash.

Player B
.25/.50 NL Cash -2/Hr
$5-$10 S&Gs Break Even
$10-26 MTTs +4/Hr
MTT Sats +2/Hr

This guy should buy-in direct to $10-26 MTTs, and use his winnings to try higher levels.

Player C
.25/.50 NL Cash -2/Hr
$5-$10 S&Gs -1/Hr
$10-26 MTTs -4/Hr
MTT Sats +2/Hr

This guy should be playing Sats, but will never really make any money by doing it. Needs to improve his Cash, S&G, or MTT games to be successful.

Player D
2/4 NL Cash +10/Hr
$20-$30 S&Gs +8/Hr
$26-$110 MTTs +12/Hr
MTT Sats +5/Hr

This guy should buy-in direct to MTTs.

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At 10:37 AM, Blogger SirFWALGMan said...

I am not sure net $/hr is all that makes a good player.. for instance if Hoyazo has been playing for 2 years and has numerous scores in 26K events and stuff and has amassed like 12K in his two years.. and Ick bursts on the scene and luckboxes his way into a 13K score in a FTOPS events.. does that make Ick a better player? I mean $/hr he is right? Over time he may lose all of that and give it back where Hoy has shown consistent results.. Who know..

Also you keep saying pro's are against satellites but most pro's I would think would satellite into big tourneys.. or be sponsored by other people.. so hardly any of them would buy in directly.

BTW - I am not picking on anyone and I do not know if Hoy or Ick have made more or are better poker players. Just illustrating a point.

At 10:46 AM, Blogger Blinders said...

$/Hr Longterm is the measuring stick. Hoy is long-term by now in many MTT levels, and Iak/LJ are not. Only time will tell who is better, but you can make a case for Hoy being best right now, as he has "real" numbers to look at.

At 11:40 AM, Blogger richk_30 said...

Blinders... I'm a long time lurker/short time blogger.

I kind of see where you are going with this argument (and I don't necessarily agree), but I think you are using the wrong measuring stick in your analysis.

You mention using hourly rate to define who "the better player is." This is just flat wrong. If you take a winning 1/2 NL player vs. a winning 2/4 NL player, the 2/4 player could have a higher hourly rate. But does that make him a better player? No it doesn't.... the 2/4 player is just playing at higher stakes.

The true measure of a better player is BB/100 hands. If the 1/2 player wins 10BB/100 hands and the 2/4 player wins 8BB/100 hands, the 2/4 player has a better hourly rate simply because he's won more money ($64 vs. $40 in 100 hands), but I would consider the the 1/2 player a better player because of the BB/100 value.

By satelliting into an event, yes you are playing above your bankroll. However, when I've done it, I consider it a freeroll. And if it's so -EV, then why do many mid-level Pro's who have won $10K events still satellite into $10K events?

At 11:42 AM, Blogger Mr Subliminal said...

Do you guys keep track of your ROI in these things? Lets say that you could get a 20% ROI on satellites (I question this big time).

I am a live cash game player, but several months ago when I was more active in the blogger tournaments, I would use the $8.70 18 person SnG's to acquire my $26 tokens. I have never been a good tournament player, but the flat payout structure for these token satellites suits my cash game temperament and the following stats from show that an ROI of 20% or more is possible. And yes, I know a sample of 95 is nowhere near the long term, but I believe it is sufficient to make my point.

Player: HomelessShelter
games 95
tot profit $252
av profit $3
av stake $9
av roi 30%

However, the fact that I basically did nothing moneywise with these tokens does lend credence to your argument that the subsequent success or otherwise in the follow-up MTT is an even more important factor. If and when I do return to this form of activity, I will be looking to make a business deal with a profitable tournament player looking for free tokens.

At 12:40 PM, Blogger Hammer Player a.k.a Hoyazo said...

Btw no one would (or should) dispute that mtt satellites are not a great idea for someone who literally never makes the cash in the underlying tournament, even when he does win that mtt's buyin via mtt satellite. Many of us (myself included at one point btw) have come to the realization at some point that our bankrolls are going down because we keep satelliting in to large buyin mtts but then not making any money off of them. Even if you played $8.80 into $216 every night of the week via mtt satellites to play into a 100k guaranteed mtt with that $216 buyin, if you never ever cash in the big buyin mtt then you're still losing money by playing all of those satellites, without a doubt.

That said, the major flaw of this entire piece (other than richk_30's smart comment above, which I assume Blinders will agree with), is this idea that $ won per hour is the right measuring stick for everyone. I accept that for Blinders $ won / hour (or BB/100 hands, whichever) is how he assess his own play, and I respect that decision based on Blinders' own strengths, goals, financial situation, time to play poker, etc. But it is factually just not the measuring stick used for everyone. I would guess that a very small percentage of the bloggers out there, for example, are tracking dollars or bets won per some amount of time as their end-all-be-all statistic to govern their play. As I've mentioned here a couple of times over the past few days, I most certainly do not play poker just "for the money", and I am much, much more interested in playing in the big-buyin mtts -- which again I feel confident I can win in -- than I am in attaining the absolute maximum $$/hour from poker. I have never approached poker in this way and thus the whole premise that I should not play mtt satellites due to not producing direct $$ per hour is misapplied as to myself and I would think mostly all of the people who read this blog.

Also, pros satellite all the time into big buyin events, or they get fronted. That is well known fact right there, so not sure why you keep bringing that up.

Lastly, the silly idea that we are somehow "not doing it right" by not keeping detailed stats of every time we sit at the table is also totally off-base and just another example of Blinders placing his own personal construct for poker play on everyone else. Again if you are not trying to make it as a professional, not relying on poker money to make your monthly nut, and simply not really concerned about exact dollars and cents calcuations of your historical play, then to suggest that not keeping a detailed book of all this is somehow bad or wrong totally misses the mark, again at least as applied to me and I would say mostly everyone who reads here.

Other than all this, the original post from Thursday was sheer brilliance. Nice work Blinders.

At 1:54 PM, Blogger Blinders said...

BB/Hr is not valid measuring stick (unless you convert it to $/Hr. You could argue that a .01/.02c NL player is better than a 5/10 NL player by that measure, but give me a break. The games get tougher as you move up and you must be a better player to beat the higher stakes. Please give me an example of any profession where someone who makes less money per hour is concidered more successful. Charity does not count.

I still have not heard the argument from someone who says they make $10/hr in cash games and $2/hr in satellites, that satelittes are the way to qualify for a tournament. The rest of your arguments just don't make sense to me. Obviously I am specifically talking about people who are serious about improving thier poker game here. If that is not one of your goals just move on. Most people who are serious about anything and successful (business/hobby or other) use some type of metric to see how they are doing. If this type of stuff is not important to you (i.e. you don't care that you have no idea how you are doing or if you are improving or not), then you are simply not serious about your activity. I am getting a little tired of the arguments from people who have no idea what their rates are in any from of poker saying I am dead wrong here. At least I am arguing from facts (my own records), and not emotion or a "gut" feel.

If you look at Subliminals numbers, he is showing a profit $3 per token S&G. I don't know if he multitables them or not, but lets say he runs 2 at a time. So he saves $6/hr by running them. Now I don't know what his hourly cash game rate is. If it is below $6/Hr then sats seem to make sense, assuming that he can convert the tokens to cash later. It is noce to look at numbers for once here.

Lastly, keep in mind that 90% of entries into the big 10k+ buyins lose money long-term. 10k is a lot of money even for a "mid-level" pro and a huge portion of the so called "pros" are not winning players long-term. Lets say you were a pro, and wanted to play in the big ones, but you were not sure if you were +EV in them yet. If you figure that your hourly rate is high enough in sats compared to other forms of poker, I could see them going the sat way. These guys would all be better off playing 1k type buy-in events though. I still maintain that if you are satelliting in you are either under-rolled or not sure of your expectaion value in the MTT you are targeting. Both are very dangerous things for your bankroll, and "mid-level" pros who want to make it should be more responcible.

Do you guys ever wonder why Helmuth/Ivey/Cunningham... never play satellites? Because they are +EV in the big events and as such Sats are a waste of time for them.

At 4:37 PM, Blogger Alan aka RecessRampage said...

Interesting topic. But did you consider that some people play for fun? I rarely play satellites because I think like you, in that sense. It's just not worth it for me to play 3 hrs, just to win an entry into a $215 tournament while I could make that at a cash table in less time. However, I still do that once in a while. Why? Because it's fun. Cash games are such a grind. And I do treat poker like my second job and I closely monitor my BB/Hr rate because I do believe that in the long run, that's a clear indication of how I'm doing. And I also know that MTT's are -EV for me. But on the same token, I play tournaments as a different game. In other words, I play to get better in tourneys and satellites is just a different variation. I guess playing in a satellite vs playing in an MTT is different, just like playing NL is different from limit hold'em. All I'm saying is that I agree if everyone's goal is to maximize their hourly rate. But I've also heard from so many that poker is their hobby, not their job, and as such, if they can parlay $8 into $150 into $4000+, that's ok, regardless of the amount of time it takes because again, it's not so much "can I maximize my winnings per hour" but rather "I want to take a shot and play for hours but what's the least I can lose." And for that argument, satellites make sense.

At 9:56 PM, Blogger bayne_s said...

Offers his own take on satellite play

At 1:36 AM, Blogger Minh said...

This is great advice, but not factual. I have a poker buddy who I am more intuitive than and I give advice to, you could call him a student because he only started playing poker because of me. I play 2/5 NL and he plays 5/10 NL. He averages $15 more an hour than I do. But put him in a 2/5 game and he will not make a play or read I can't make.


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