Last week, I discussed stop-losses and bankroll limitations in detail. I’ll finish this topic by discussing how to effectively use a stop-loss.
The short and sweet of it is this: if in doubt, just stop. That’s really it. Just stop. Having said that, it’s easier to say than do, so in this article, I’ll give you some guidelines and a trick to help you implement and execute your stop-loss.
PROPER USE OF A STOP-LOSS IS PERSONAL
If you are the type of person who has a strong will, never falters, and always follows through on their resolutions, then you probably do not need a stop-loss. For the vast majority of people, a stop-loss will help protect your winnings, reduce the size of your losses by minimizing the effects of tilt, and mitigate the potential for outsized losses.
The proper use of a stop-loss is not an objectively precise decision. For example, the decisions you face in blackjack are clear cut. In blackjack, each decision has a computed value attached to that decision. When the player is faced with two competing decisions, such as to hit or stand, the player compares the the gains or cost derived from one decision versus another decision. The decision with the higher value is the objectively ‘correct’ decision.
The use of a stop-loss is much more subject because it’s personal to each player. Also, the value or cost of stopping or continuing can fluctuate depending on the current mood and mental clarity – or lack thereof – of the player.
I do not claim to know your circumstances or your strengths and weaknesses, so I cannot tell you what you should do; rather, I will explain my thought process for doing what I do. After you hear me out, you can tailor my ideas, hypothesis, and strategies to your own needs.
I’ll give you my personal formula so that you can derive your own answer.
I KNOW MY STRENGTHS, WEAKNESSES, AND FEARS
My strengths, when it comes to gambling, is that I have a relatively large bankroll. Having a large bankroll allows me to ride the roller coaster of swings that would end the vacation of the average gambler. Sometimes, this supposed ‘strength’ is not really a strength, but that’s another story.
My other strengths are that I can look at a situation in a cold and calculated way, and I’m quite aware of the optimum strategy with most games. I also know my limitations with regards to this supposed ‘strength’.
When it comes to my personal weaknesses, I follow a rule that I teach all my students: do not fall into the trap of admitting your weaknesses to anyone but yourself, unless there is an objective reason to do so (such as professional remediation).
I’d rather be direct than give you a corny answer like, ‘my weakness is that I care too much.’
I’ll be forthright and say, ‘my weaknesses are not up for discussion.’
But I do know my fear…
My fear is that I will gamble too much. I love gambling. I love the thrill and excitement of it. I love the way the casino smells, the sights and sounds of the casino. I love the interaction of ordering a drink from the cocktail waitress. I love it all. But at the same time, I fear it because I love it so much.
I have personally seen people who gamble so much that they end up broke. Actually, sometimes I hear from them because they call me up and ask for backing.
As a former advantage player, I saw it all the time. As a poker player once told me, ‘you aren’t a professional poker player until you go broke at least once.’
The vast majority of the reason why people in such positions go broke is a lack of discipline. Every reason and excuse can be traced back to the lack of discipline.
That’s why I set a strict budget for myself, why I use cash and never use markers, and why I believe that discipline is of the utmost importance.
It doesn’t matter how large your bankroll is because without discipline, you will go broke: Gambler loses $127 million and blames casino.
So you should identify your fear.
If One Day I Ever Lost Discipline, I Would Stop
My main motivation for using a stop-loss is to show myself that I have discipline. If I ever find that I am unable to exercise discipline, I would just stop gambling. I would take up golf and never ever gamble again.
Sure, I’m highly disciplined now in 2019, but people change. Maybe one day because of some unforeseeable circumstance, I’ll change. That’s another fear. That’s why I use a stop-loss.
By addressing my fears and having a mechanism to keep myself in check, I make gambling all that much more enjoyable for myself now and later. RoadGambler 2030 may thank me, as he’s sitting by the beach sipping Belvedere martinis.
So ask yourself why you should use a stop-loss. Identify the reason. If you don’t have a reason, that’s okay too. Maybe you just want to practice discipline. Test yourself.
I don’t know your personal reason why you should have a stop-loss, that’s something you must figure out.
HOW TO USE A STOP-LOSS
Once you’ve figured out the ‘why’, here is the ‘how’…
The Most Difficult Thing About a Stop-Loss
Most problems in life have stupidly simple, albeit unhelpful, answers as their root solution, for example:
- If you want to not be an alcoholic, stop drinking;
- If you want to lose weight, eat less;
- If you want to get better grades, study more;
- If you want to get along with your spouse, just argue less
The problem isn’t the answer; rather, the problem is how to implement and exercise the answer.
So when I tell you that it’s good for you to have a stop loss, you should know that the most difficult thing about a stop-loss is actually stopping.
How many times have you gone to a casino, blown through your gambling budget and then told yourself that you should have stopped or that you knew you should have stopped, but didn’t stop? Don’t beat yourself up too badly, it happens to all of us. It’s human, and being human is a strength, not a weakness. Mistakes are not reasons to quit, they’re just opportunities to improve and become stronger and better.
Just acknowledge that you need a stop-loss.
Set a Realistic Stop-Loss Before You Head At Some Point Prior to Play
Look at your bankroll, determine if your bankroll is really your bankroll. If your bankroll is $1000, but you need $500 to pay rent, then your bankroll is not really $1000. You bankroll is really $500. Understand your bankroll limitation and don’t confuse your limitation with stop-loss amounts.
IMPORTANT: I can’t emphasize this enough, bring only what is your bankroll. Do not bring any amount that is not part of your bankroll for gambling (by bankroll, I include your expenses).
Tell yourself at what point you will stop and set that point before you get to the table.
Here is my stop-loss before I hit the table:
- On a large buy-in, I will either do a one and done or break it into two. I am willing to go down to zero and lose it all, but I will not buy-in again if I had a ‘one’, or I will only buy in one more time if I had a ‘two’
- On typical 20x games, I allocate $10,000 broken into various parts. I will not allow my total buy-in to exceed $10,000.
- On games less than 10x, I will buy in a maximum of 6 times at $500 each time, or $1000 three times.
There are exceptions to the above rule, but that’s what I tell myself before I hit the tables. My stop-loss allows me to go down to zero. I am more focused on controlling my rebuys.
Most people use this version of a stop-loss:
- If I lose x% of my buy-in, I’ll stop
I’m not a fan of this form of stop-loss. It’s the most common stop-loss. The problem I have with this stop-loss is that it causes the player to misjudge the size of their bankroll. You may end up overbetting your bankroll because it’s smaller than you realize. In the long run, there’s nothing wrong with a smaller bankroll. Just be aware that you’re playing a high volatility game.
So let’s say your stop-loss is 50% of your $1000 buy-in. If that’s the case, just buy-in for $500. There’s no beneficial reason to buy-in for $1000. If anything, having the extra money may tempt you into breaking your own stop-loss.
No matter what you do for your stop loss, remember this important rule for setting a stop loss: make sure your stop-loss is realistic.
Do not set unrealistic stop-losses.
The Problem with Setting Unrealistic Stop-Loss
When I was a kid, my mom was the disciplinarian and my dad was the permissively fun parent. I never took my dad seriously because anytime he set boundaries for us, he would later forget or not enforce the boundaries. If my curfew was at 8 pm, I knew that I could home at 10 pm and not face any consequences.
In deference to my dad, he taught me how to make good decisions and used positive reinforcement. He just wasn’t good at discipline. My mom was the one who we all feared.
In that same spirit, if you set a stop-loss for yourself that is unrealistic, you will not take yourself seriously after you continually defy yourself.
Take into account all the variables of your trip.
Are you going to a game with high limits and small bankroll? Have you taken into account the time it took you to get to the casino? The time in between gambling trips? Are you going say, ‘screw the stop-loss, I drove 3 hours to get here’?
Consider all your factors and then set a realistic stop-loss. Do not set yourself up for failure.
If you can’t control yourself, then you are being controlled by the game.
IT’S NEVER TOO LATE TO DO THE RIGHT THING
This is another important rule of disciplined gambling: it’s never too late to do the right thing.
If you bought in for $1000, set a stop-loss of 50%, and you find that you already blew through your stop-loss, and you only have $300 left, it’s okay to stop right now. Even if you told yourself that you were going to stop at $300, but then you blew through your remaining $300 and all you have left is $50…it’s still okay to stop with your remaining $50.
Let’s say you blew through your remaining $50 and have nothing of your bankroll left, what now?
Repeat after me: it is never too late to do the right thing.
You can still do damage by hitting the ATM or pulling out more money. Just stop.
STOP-LOSS WHEN YOU ARE WINNING
This is my formula for stop-losses when I am winning. I call this a fluid stop-loss because it’s a stop-loss that I implement and change as the game wears on.
A little background on the Put Bet craps game…
I wanted to make a put bet video because very few people have actually seen a put bet in action. I also wanted to make another high stakes video. I had set a stop-loss at zero, meaning that I was willing to lose it all. I didn’t really set a win goal. I had an idea, but not really a hard goal. I just knew that I wanted to play hard and fast.
While I was eating dinner after the game seen in Part 1, I thought to myself, I want a win goal of $50,000. I thought it would be a nice round number. I also set a floor of $20,000 and if my losses brought my win to $20,000, I would cash out my win.
My budget was $12,000 or so.
Because of the smaller budget, I pared my bet down to the approximate $1000 put bet that you saw in the video. After the dice heated up and I ran my win total up to $40,000+, the thought crept into my head that if I had not trimmed by bet down to $1000, I would have reached my $50,000 win goal already.
That’s my first red flag. The mental game of, ‘shoulda, woulda’
Have you ever seen the movie Casino? Remember this scene when DeNiro’s character says that the whale, ‘he doesn’t see it as winning $10,000, he thought of it as losing $90,000’.
When these thoughts start creeping into my head (and I assure you it was in my head), I think it is time to go.
I also thought about it this way…I really thought this to myself in my head…
That’s my way of thinking when I set stop-losses for my wins.
A TRICK TO FORCE YOURSELF: THE FEEL OF THE WHEEL WILL SEAL THE DEAL
I’ll leave you with this trick to help you with self control…
If you have ever left the table in regret because you lost self-control, then this is the one trick casinos don’t want you to know.
Heck, it’s the trick car dealers don’t want you to be aware of.
Confession about myself: I have an ownership interest in automotive retail.
One of the tricks we use in the automotive business is that if a person is on the fence about a deal, we convince them to take a test drive. We have a saying that, ‘the feel of the wheel will seal the deal.’
The theory goes that humans are tactile creatures who feed off of touch. I could explain and describe a loaf of bread to you, but not nothing is more descriptively powerful than putting an actual loaf of bread in your hand.
Similarly, I can tell you about the features, comforts, and benefits of the car that’s in front of you, but nothing can beat the ‘feel of the car.’
So, to create an attachment to the product, we convince you to take a test drive. We do everything possible to make the car feel like it’s more than a car; it’s an extension of you.
It’s a highly effective trick.
How Does This Apply to Your Table Play?
I’ve taken this theory, which I practice in business, and use it as a form of instilled discipline. The casino does everything in its power to make you forget that you are dealing with money and lose perspective of money. The casino wants to psychologically detach you from your money.
You want to create a re-attachment to your money.
In Part 2, I up and would eventually approach $42,000. On the way up, I was debating going to $50,000. I instinctively knew that I should stop because it wasn’t worth it to go for an additional $10,000 when I was already up so much.
I had this internal debate with myself, and you can see it going on within myself as I was shifting the chips. I was touching the chips and moving them and handling them to remind me that this is real and this is now in my possession.
I took the stack of chips and broke them down into upward-facing groups of four chips to remind myself that this isn’t a stack; rather, it’s ‘$2000’.
It’s my money, not the casino’s money because I won it from them.
I was feeling the chips to remind myself that these are my chips; they’re no longer the casino’s chips.
Next time you’re having a moment of internal debate, put your hands on your chips and handle them. Visualize them as not just chips, but as money.
If you must, do this…tip the dealer a few dollars to hold your spot and take all your bigger chips, just leaving the reds. Go cash out all your greens, blacks, purples, or whatever else you have. The game will still be there after you cash in your chips. After you cash in your chips, find a private area or somewhere safe. I like counting on an empty or closed table that has a dealer nearby. Slowly count your cash and look at the cash while you’re counting. Don’t just focus on the count, rather, pay attention to the bills while you are counting.
Touch it and feel it. Do you want to risk that green cash that’s in your hand?
Congratulations. You just did a sales job on yourself.
Now that I’ve discussed with you my philosophy on stop-losses, next I’ll talk about how to maximize comps. If you’re wondering how comps are related to stop-losses, it’s this reason: comps are inducements by casinos to get you to gamble more (and with them).
I’m here to help you hunt down comps in a way that subverts the casino’s expectations.
That’s why I wanted to talk about stop-losses before we walk about comps.
More to come!