This is the final part in the 3-part series on Self-Awareness and Wagering. Part I and Part II can be found at these links. While this is the final part of this series, much more can and will be said about self-awareness and wagering throughout the blog and accompanying books. Here I will cover:
- Tilt: We’ve all experienced “tilt,” that combined feeling of lack of control, need for higher amounts of betting, and need to get even that occurs in gambling. It usually sets in after a horrible beat, such as a last minute (or second) change in the score or result that takes you from win-to-lose. An improbable poker loss, a poor result in a photo finish, or a last second turnover can all push us into tilt. Under the influence of tilt, we take more chances and risk more capital than we normally do. If we are not careful — and we rarely are during tilt — it can wipe out months of capital accumulation. It may be the hardest emotion to fight in wagering. But it is extremely important to recognize the change in yours bets — bet size and bet frequency — and shut down betting for a while. I’ve seen pro players put down cards or bet slips and literally walk away for a while. You should do the same if you recognize it — time is typically the only salve.
- Balance: You need to be aware that you are considering all the factors that make a good gambler and that you hold them in balance with each other. It is somewhat the opposite of tilt, but not entirely. It is a feeling that you are considering both short-term and long-term and are betting within your budget. You are maximizing your edge. You are experiencing flow, a sense in which you are one with the wagering and that you’ve found the right amount of risk. And you are balanced with other activities in your life, which makes your gambling less susceptible to burnout.
- Dealing with Losing: Losing streaks happen. They are part of betting on uncertain events. Flips of a coin rarely, if ever, comes up at the long-term probability; you rarely see heads-tails-heads-tails-head-tails, even though this is the long-term expectation. You need to be aware that you can be doing everything right in your wagering and still lose. Besides from the need for sufficient capitalization, emotionally you must accept the losing. Importantly, you must separate it from your process and not let unjustified negativity seep in.
In Part I, I discussed the need for self-awareness in your wagering. You need to be constantly checking to make sure that you are not influenced neither by variance or by emotional betting, such as being motivated by fear or greed. You need to remain humble at all times — long-term trends tend to dominate and positive emotion can skew you off to the side.
I’d like to add a few more specific items which you need to be aware of in order to be a winning player at wagering. Here’s the list:
- Strength of own position: You need to have an accurate and realistic sense of where you stand at all time in whatever game you are playing. Overconfidence will lead you to make poor decisions, which while turning out okay in the short term, will bankrupt you in the long term. It is perfectly okay (and encouraged) to take longshot positions, but you need to be realistic on the edge that you actually possess.
- Playing Scared: The saying goes, “Scared money never wins,” and it’s true. A corollary to this statement is that playing to break even is playing to lose. When you are afraid of losing money, that is exactly what happens — you lose money. The fear begins a risk-averse thought process that leads to poor long-term (and usually short-term) decisions. You need to be aware if you are cutting corners to save money and playing less than needed for the situation. Or whether you are making a bet that you can’t see lose. Much money at the end of budgets is lost from playing scared.
- Gambler’s Fallacy: There is an overwhelming belief among gamblers that after a series of loses — especially close ones — that they are due for a win. This is a fallacy because you are never due — each bet (for the most part) is an independent event and its resolution has no effect on others. Those earlier losses have no effect on the next bet and there is no added probability to it because of them.
The first area to focus on when perfecting your psychological edge is self-awareness. You need to able to assess your own strengths and weaknesses accurately. This is easier said than done. It is assumed that you already have developed an edge in the data/info side of the game. This list is focused on what needs to be developed to deal with the challenges of emotional control. In order to win, you need to score high (or low) in these areas:
- Patience: Variance is high, especially for a player who focuses on longshot type wins (future bets, horse racing) and value is not distributed evenly. Payouts on value do not always happen, even in the best of situations. You need to be able to wait to have success.
- Fearlessness: You cannot let fear enter into any decisions. Usually, this is a fear of regret, that a certain play would have resulted in a win. Listening to this fear results in wasted capital that could be used better elsewhere.
- Greed: We all go on hot streaks. It’s the nature of the game. But we have to constantly ask ourselves if we are seeing value when it’s not there. Greed distorts our view at all times, especially when we are winning.
- Humility: The opposite of greed and the answer to the variance of the game. We have a lack of control over what happens — that’s the nature of wagering on uncertain events. You need to have an appreciation of your limited role in the process. Be water — move towards stillness.