Note: Not at the old Poker1 site. A version of this entry was first published in Poker Player newspaper in 2007.
This is part of a series by Diane McHaffie. She wasn’t a poker player when she began writing this series. These entries chronicle the lessons given to her personally by Mike Caro. Included in her remarkable poker-learning odyssey are additional comments, tips, and observations from Mike Caro.
Diane McHaffie is Director of Operations at Mike Caro University of Poker, Gaming, and Life Strategy. She has traveled the world coordinating events and seminars in the interest of honest poker. You can write her online at firstname.lastname@example.org.
Lessons from MCU
— With bonus content by Mike Caro (pending) —
Lesson 111: Stop Loss (and Mike’s feelings on it), Part 2
In my last column, we examined stop loss, which is a concept some poker players use to set a pre-established limit on how much they’re willing to lose during a session. This maximum loss is a trigger point for leaving the game. So, if you use stop loss, you know in advance that you will never lose more than a given amount.
You use stop loss to protect your bankroll. Mike doesn’t use stop loss and doesn’t like it, as we’ll discover today. But, to be fair, last time he gave me some reasons why it might be effective in some cases. We saw that stop loss can keep you from crossing Caro’s Threshold of Misery. That’s the point where you’ve lost so much that you’ve maximized your agony and additional losses don’t register. There’s no more pain to feel.
Today, I’m going to tell you what’s bad about stop loss.
What are the negatives of stop loss? Mike states that good decisions and self-control can be a much better method of holding onto your bankroll. You have control of when to quit or stay in the game. Is the fact that you’ve decided on a certain number that you’re willing to lose actually going to benefit you? Mike says no.
Mike says, “Stop Loss can have the opposite effect.” If poker is your livelihood, you need to be spending more hours at the table, not fewer. Yes, there will be good days and bad days, as with any job. If you’re a doctor, do you dash away from the hospital after a bad operation, or do you continue on to the next operation, vowing to do better? If you’re a carpenter and you measured a board, and then cut it wrong, are you going to call it a day and go home, or will you take greater care on the next cut?
Mike says that in poker you get paid by the hour. Some hours you lose, some you win. But overall, if you’re a winning player, each hour averages a profit. Therefore, the more hours you play under favorable conditions, the more you eventually earn.
Say you’re in a promising game where the money is loose and then suddenly you suffer a series of losses. You reach that alarm-sounding, pre-set number signaling your stop loss; well, you’ll have to leave.
Hey, you could be walking away from winning hours of play. It seemed like a profitable game at first and it could be again. Instead of walking away, you could still be involved in the game, enjoying the camaraderie, choosing your hands carefully, and making consistently good decisions until the money starts to flow your way again. Wait a while and it could get better. It’s just as likely that the cards will turn in your favor now as tomorrow. Mike says, “The cards aren’t monitoring your fortune, so they don’t know who to be mean to next hand.”
The decision to quit or keep playing should be left to your best judgment at the moment, not to a phony pre-established number. Maybe winning hands are right around the corner, and you’ll bring your good fortune to a skidding halt through stop loss. Do you truly want a set number making your decisions for you?
Mike says if you’re losing, leaving the game is an option, simply because you don’t have an intimidating image. But you might want to consider: What led to your losing? How was the game prior to your loss? Could it turn profitable again?
If you strictly practice stop loss, you’ve taken away your chance to recoup your losses under favorable circumstances. The decision is now out of your hands. That special number is in control of your destiny. So, who should determine whether you play or quit — you or the chosen number?
If you’re losing, change tactics, play better, make superior decisions, stick it out, and you could be back on the winning side. See, it’s all up to you. — DM