Playing Poker with a short stack
Posted by : support on Thursday, June 12, 2008 permalink
By forum moderator : Guojing
Been running hot the last few days of poker. Since my last entry on May 1st, my 2000 or so hands of 2cents/5cents at Prima network has brought a return of almost 50 dollars. I have been employing a short-stacked strategy, I buy in for 2 dollars instead of 5 dollars, and when I double my buy-in, to 4 dollars or more, I will leave when the big blind reaches me and go into another table buying in for another 2 dollars again.
This was a strategy suggested by Chris Ferguson in his quest to turn $0 into $20,000. Analyzing this strategy using economics will tell us that it is adopting a "low risk and low return strategy". Yes, when your monster hands hold up at showdown, you will win much less than if you had a full stack. Yet, during those times where you may have to go all-in pre-flop, at the flop or at the turn, and you get out drawn due to the "miracle river card", you will be glad you were short stacked, because you will also lose less.
Demerits of being short stacked
Many critics would say this does not train your post-flop skills. I can see where they are coming from. When I have only $1.90 and I get pocket aces, I find that I might as well go all-in preflop because there is usually at least one caller who will play with K-J or K-Q suited. By going all-in, I am assured of jamming in with my best hand preflop and I am saved from making tough decisions at the river.
Sometimes when I get pocket queens with a stack of say $1.50, I find myself going all-in preflop and still gain a profit overall. Too many people at micro limits will call an all-in bet preflop with medium pairs or any pair for that matter hehe. Often, when I slowplay my pocket queens and the flop has a scary overcard like an ace, they will always go all-in and sometimes I fold, giving them too much credit when all they had was a lower pocket pair. So going all-in preflop on a short would be better for such a situation.
Merits of being short stacked
A lower risk
Applying my economics perspective into this issue, as well as combining the knowledge from poker about the term known as the emotional bankroll, I begin to understand better some of the hidden benefits of being short stacked.
Ultimately, a person's decision to gamble is a decision on risk and return. We gamble everyday in our lives without even realizing it. For example, when the traffic light tells you that you can cross the road, we are making a gamble that the drivers will not accidentally step on the accelerator and injure us. You can minimize these by staying at home all year round but we are willing to take those risks for a better quality of life.
Now gambling in the form of playing poker is a deliberate decision to take risk in search of higher return. However, it is axiomatic in economics that people are risk averse. This concept is best illustrated by how one person explained why he will never gamble, "I don't gamble because winning $10 really doesn't mean anything to me but losing $10 is something that will really make me upset!"
But of course, economists are very much more concerned about decisions at the margin, meaning that decisions should not be framed on whether should I gamble or should I not gamble. Instead, the decision should be whether to do a little bit more gambling versus a little bit less gambling. Seen from this perspective, my decision to go short stacked can be viewed as trying to do a little bit more gambling, but still take into account my risk averse nature by minimizing the variance of gambling.
Thus, I am perfectly happy with giving up a higher return to gain less risk, and this is precisely achieved using the short stack strategy. This is analogous to investments and why some people are perfectly happy with fixed deposits compared to investing in unit trusts.
About emotional bankroll
Expert poker player recognizes the difference between playing within your gambling bankroll and playing within your emotional bankroll. Yes, you should always put no more than 5% of your total gambling bankroll on the table at any one time, but the amount at stake matters too. You may gladly take a 60-40 bet on whether you win or lose $2 but if your poker opponent is offering you the same 60-40 chance of winning or losing $5, and the roll of the dice unfortunately fall into the 40% chance, you will feel more emotionally affected when you lose in the second instance as compared to the first one.
Thus, this rule of moving up the limits when your poker bankroll is enough for 20 full buy-ins must be adjusted according to your emotional bankroll. Again this is where playing with a short stack may be better for most people.
So the obvious conclusion is that, before I ever move up the limits to playing 5 cents/10 cents, a better strategy would be to continue with 2 cents/5 cents but now buy in with the full $5. Once I am perfectly comfortable with the swings that come from having a full buy-in, then the next step will be to move up the limits to 5 cents/10 cents but again start with a short stack strategy, buying in for $5 only. Then I repeat the process.
This should ensure that I will continue to enjoy playing poker for a long time.