LESSON #4 of 5
Subject: Lesson 4 of 5: The often overlooked “levers” that control your profit
Welcome back to Part 4 of this special email exclusive training:
The Six Levers Of Poker Profits
If you’ve missed any of the lessons so far, make sure you go back and read them all.
Yesterday we covered the first two levers
(and they were big ones)
Skill and Efficiency
Today we are going to cover the final four levers and start to show you how you can use this information to discover which area your next big poker breakthrough will come from.
The final four levers are:
… and they make up something I call “The A-Game Player’s Skill Stack.”
They are the non-technical “soft skills” that have a massive impact on long-term poker success. Those who manage this aspect of the game well, see a boost in earnings, even without an increase in technical skills.
Let’s jump right in with…
Your Edge represents the gap in Skill between you and your opponents. The more significant the gap, the larger your Edge, and the bigger your profits become.
Are you starting to see how the different levers interact, and how you can increase your profits even without an increase in Skill?
Play in a game with players who are very close to your Skill level, and Edge will be small, and so will your profits.
Play in the same game with players who have much less Skill than you, and your edge increases, as does your profits.
You could be the 8th best player in the world, but if you’re playing against #1-#7, you’ll be a losing player (in that game).
On the other side, you could be a losing player in almost every game spread, but if you’re a 5/100 and sit down with seven 0/100, you’re going to clean house.
Edge positively correlates with Efficiency and Volume.
The larger your Edge (aka your Win-Rate), the fewer swings you will have, meaning your profits will steadily go up, and you won’t experience as many prolonged downswings as someone playing with a smaller Edge.
This means you will face less adversity and have a stronger feeling of control.
That creates an environment where it’s relatively easy to play your best (Efficiency) and put in a lot of Volume.
There are some scenarios where the opposite could be true. If you’re playing with a high Edge, but for low Stakes, the lack of challenge could lead to boredom and thus a drop in Efficiency and Volume.
By now you should be starting to see just how crucial it is to find the right balance for your game to optimize your profit number.
Next up we have…
Volume is simply how often you play for real money.
It’s the number of hands you play in cash games or the number of games you play in MTTs and SNGs.
Volume is how you translate poker skill into actual profit.
All the skill in the world is irrelevant if you’re not actually applying it at the table.
Simply put: If you don’t play, you don’t get paid.
Volume is a significant leak for many players.
You can be highly skilled, play in amazing games, and always play your A-Game, but if you only play a few hours each week your earnings are capped.
Keeping all other factors static, a 25% increase in your volume will yield a 25% increase in your profits. This is obtainable for many players who continuously struggle with putting in the hours necessary to achieve their profit targets.
This is a balancing act because Volume negatively correlates with Efficiency.
An online player who adds more tables will eventually start to lower their Efficiency. It’s just not possible to play each hand optimally with so much action going on at once.
Too much Volume can also lead to burnout, which can lower both Efficiency and Volume. Burned out players often need to take weeks or months off to recover and give up any profits that would have been earned over that time.
Always remember that it’s your job to maximize your profit number, not any individual levers. The relationship between Volume and Efficiency demonstrates this principle nicely.
It’s often worth giving up a bit of Efficiency to add in more Volume, as the extra hands/games mean more total profits even if you’re not always at 100% Efficiency.
Finding the perfect long-term balance is critical for optimizing profits.
Next up we have…
The Stakes you play has a major impact on your overall profit potential.
Moving up through the ranks increases your lifetime profit potential exponentially but doing it too quickly can set you back months or even years.
Managing this balancing act well is a vital skill that can mean the difference between a long and prosperous career, and one that never makes it off the ground.
For the most part, the Rake lever is independent of the others. However, Stakes negatively correlates with Rake, meaning the higher stakes you play, the less rake (as a percentage) you usually pay. This is especially important at the micro and low stakes, where Rake can eat up the vast majority of your profits.
Stakes is often (but not always) negatively correlated with Edge, as the further you move up the stiffer the competition gets.
For a player just moving up or taking a shot at higher stakes, you’ll usually find a negative correlation with Efficiency. Playing for an amount of money that will sting if you lose, isn’t a great recipe for playing your best poker.
On the other hand, a player used to playing higher stakes might have a lower Efficiency when playing smaller stakes, as they don’t treat it as seriously.
As I mentioned in the last section, finding the perfect balance for your specific situation is the key to using this framework to optimize your profits.
Just because you can beat certain Stakes, doesn’t necessarily mean that playing at that level will yield the most profits. Comparing the Volume and Edge that you can achieve at different Stake levels, gives you the proper data you need to make the best decision for your game.
And last, but not least, we have:
Rake is the least sexy of all the levers, but it’s important to be aware of the Rake that you’re paying and how it affects your overall profitability.
A high Rake, like you will often find in micro and low stakes games can eat up all your profits, while a low rake can make players profitable who would be losers under ordinary circumstances.
An excellent example of that would be the old SuperNova Elite grinders who would often break even or lose money at the tables, but still, come out on the positive because they were essentially paying little to no rake with their bonuses.
A high rake doesn’t necessarily mean you must avoid the game; there could be a game where you have a very high Edge, making the game quite profitable even with a high Rake.
The important thing is to be mindful of Rake, as most players don’t even factor it into their decision-making process when choosing a game.
Now that we know all the factors that control our profitability in poker, how do we use this knowledge to actually boost your profit?
The key is understanding that these six levers represent a dependent system, not six individual factors.
This means improving profits isn’t as simple as randomly improving in one (or multiple) areas.
If you’ve ever felt like you were working hard on your game and doing everything right, but just weren’t making the progress you “deserved,” chances are a deficiency in one of the areas is holding back the progress you make in all of the others.
What’s Your Bottle Neck?
In a system of interdependent variables, a bottleneck in just one area is enough to slow down the entire system.
For example, if you were the best player in the world (Skill) but only played $1/$2 NL, your profits would be severely constrained. It wouldn’t matter how much you improved your game (Skill), how big your Edge was, how often you played your A-Game (Efficiency), how much you played (Volume), or how low the Rake was…
…without increasing your stakes you wouldn’t be able to make any meaningful improvement to your profits.
In this scenario Stakes is your bottleneck, and the only way to move the needle is to move up.
The Rake factor is also a good example of this phenomenon. A high enough rake can make a game literally unbeatable. If you were to play in a game with those conditions, no amount of improvement in any of the other areas would make a difference.
Many players get trapped in the micro stakes because even though they have a large Edge over their opponents, the high rake makes it very difficult to grind up a bankroll.
Rake is the bottleneck, and the only way to become profitable is to find a game with lower rake.
The key to using the Six Levers framework to improve your profits is to take an honest look at each of the six levers and discover the lever, or combination of levers, causing your bottleneck.
Once you know what is actually holding you back, you can search for resources (such at technical training or my upcoming A-Game Poker Masterclass) to help you remove the bottleneck and the constraint on your profits that it’s causing.
To show you have to do this, I’ve created a list of “Bottleneck Profiles” that I see repeated over and over again in the players that I work with.
All Heart, False Start
The Delusional Gladiator
The Extreme Game Selector
The Bankroll Nit
The Glass Cannon
The A-Game Player
From their titles, you might be able to guess some of the traits that make up these profiles, and tomorrow we’ll go into detail on each and see if your game fits into any of these profiles.
Check back tomorrow for the fifth and final installment of The Six Levers Or Poker Profits training.