This post was originally published on April 1, 2011.
As a general rule, I am pretty strict with my discipline in all forms of gambling. However, even in the famous book, Market Wizards, you see wildly successful billionaires note that there are occasions when it is not only acceptable to break your rules, but when you should actually feel compelled to do so. Far too often, though, overly aggressive traders use that loophole as a convenient excuse for reckless gambles and, in the end, breaking your rules that frequently will cost you too much money. A classic example of this happening is when it comes to your position sizing.
A few years ago while in Las Vegas, I found myself in an interesting $80/$160 Texas Limit Hold ‘em game at the Bellagio. The game was pretty good (weak players, but a lot of action), and I was playing my usual tight aggressive style. At one point, a seat opened up to my right and in came a well-dressed guy who could have been a stunt double for Dr. Christian Troy from Nip/Tuck. He had two attractive blonde ladies with him, and he was wearing a white golf glove. He sat down next to me, and started chatting me up. He told me that he had just flown in on a private jet from California after playing golf all day. He had alcohol on his breath, but said he hadn’t had a drink in a few hours. The women he was with wore a lot of jewelry and had expensive handbags. Basically, this is exactly the type of person that I want to play poker with in an upper limit game–Flashy, wealthy, pretentious, probably just looking to have fun and doesn’t mind if he loses some money. He played every hand he was dealt for the first 15 minutes at the table, and hardly ever folded thereafter.
The cocktail waitress came over and took our orders. Most of the pros at the table ordered green tea, coffee or water. Mr. Golfer looked confused. “No one is drinking here? Cmon, guys! We’re supposed to be having fun!” He shouted at the table so loudly that players at other tables in the room shot annoyed glanced over our way. Of course, a few of the losing “pros” at my table were losing badly and were too frustrated to even play nice with Mr. Golfer, which is a huge mistake. You always have to be affable with the mark in the game.
Now, as a pretty strict rule, I never, ever, drink at the casino when I am playing for any kind of serious money. If I am out with some friends playing $1/$2 Hold ‘em, then maybe I will have a drink. But, not a chance for the upper limits. However, in this situation I knew that if Mr. Golfer didn’t feel like he could have fun at the table, then he might very well get up and leave. At the very least, he would probably focus on playing better poker, which is exactly what I did not want to see happen.
So, in this specific situation, I broke the rules. I told him I’d be happy to drink with him, and I let him order a few shots of tequila for us. Right on cue, he unwound and started throwing money around the table some more, allowing me to win a few big pots off of him. While the phrase, “rules are made to be broken,” is too extreme for trading and poker, it is important to have the discipline to know exactly when you should break the rules…and when you are just fooling yourself.