11 Rules for Winning at Daily Fantasy

Whenever someone asks me for tips on how to win playing daily fantasy sports, I refer them to…my own books.

Duh.

But even before that, I always suggest reading a few books that have nothing at all to do with fantasy sports. One of them is The Drunkard’s Walk by Leonard Mlodinow. Another is Antifragile by Nassim Nicholas Taleb. I do this because I think the biggest weaknesses of most daily fantasy owners aren’t in their sports knowledge-most people who play daily fantasy seem to know sports fairly well-but rather in risk management and understanding volatility.

One of my favorite writers to read is author/entrepreneur/hedge fund manager James Altucher. If you aren’t familiar with his work, I highly recommend checking it out. So much of daily fantasy success comes via the ability to think critically about complex problems. I believe the largest strides one can make come outside the field of sports by studying the work of people like Altucher because it aids us in problem-solving and thinking analytically.

At his blog, Altucher recently published a piece titled “Life is Like a Game. Here’s How You Master ANY Game.” It’s one of my favorite blog posts in recent memory and, as I read it, I couldn’t help but consider how the advice could be applied to DFS. Come to think of it, I pretty much do this all day long; hey, our waitress wasn’t very consistent in bringing out our food…she’s probably pretty high-variance and not a great play for my daily fantasy server leagues.

So anyway, Altucher’s post on mastering games suggests that those who are good at pretty much any game-poker, board games, whatever-usually have the ability to master all games (through a combination of critical and contrarian thinking). Altucher-at one time a poker player and one of the world’s best backgammon players-lists 11 rules you need to know to master any game…in our case, daily fantasy sports.

 

1) Look at all the ‘candidate moves.’

“List all the options that can happen. Don’t go deeply down ANY OF THEM. Then start to look slightly deeper down each one and see which options you can quickly eliminate. This saves you mental energy and time.”

One of the reasons that I write my daily fantasy books is to help users streamline the process of daily fantasy research and lineup creation. I think it’s really important to figure out which aspects of daily fantasy research are the most important, then dedicate your time to those so that you can see the greatest return on your time.

I personally like to aggregate projections, which gives me a really accurate foundation for identifying value in a short amount of time. Leveraging the Vegas lines is another example of obtaining high-quality, actionable information “for nothing.”

2) Don’t take too many risks.

“Games are all about taking risks. But if you take too many risks, you always lose.”

Daily fantasy football is indeed all about risk management. Taking risks isn’t inherently bad, but the key is to maintain a positive expected value.

If I were to give you 3-to-1 odds on the roll of a die, for example, that would be a risk that you wouldn’t want to take; with just a 1-in-6 chance of rolling a specific number, you’d have a negative expected value. If I were to give you 10-to-1 on your money, though, you should take that bet, even though the risk is exactly the same.

Don’t take too many risks, but don’t be afraid to embrace volatility when it’s appropriate.

3) Look for the shortcuts.

“Every game, and almost every life situation, has short cuts: ways you can get better without learning the entire literature of the game from beginning to end.”

My book “Daily Fantasy Football Pros Reveal Their Money-Making Secrets” was filled with interviews of daily fantasy’s best players, many of whom are DK Pros. One of the coolest parts of talking with those guys was learning different heuristics they employ to make sound decisions when creating their lineups.

I actually think there are a lot of reasons for players of all skill levels to use heuristics like “Always stack a quarterback and receiver in a GPP” or “Never start a running back and wide receiver on the same team,” but that’s especially true for new players; such heuristics are shortcuts that can be used to improve your odds of winning when you’re not yet sure when to side with the exception to the rule.

4) Play people better than you.

“You learn more from losing than winning. Losing is not failure. Losing gives you a treasure trove of insights into how you, personally, can get better.”

Play people better than you…but play them cheaply. Enter $1 and $2 50/50 games because they expose you to a whole bunch of lineups for a low cost. Study the lineups of the best players, but also analyze the losing lineups, too.

There’s not much to be gleaned from an individual lineup, but continue to assess different lineup types to see what they consistently have in common; how much more often do winning lineups place a certain position in the flex as compared to poor lineups, for example?

5) Luck favors the prepared.

“Whenever you feel like saying, ‘I was just unlucky,’ trust me when I say, ‘you’re probably an idiot.’ Analyze the reality. Don’t just try to make yourself feel better.

In chess there’s a saying, ‘Only the good players get lucky.’ This applies to every area of life. As Scott Adams (creator of Dilbert) said to me, ‘if you know you’re only going to succeed at 10% of the things you try, make sure you try 100 things.’

Daily fantasy sports is awesome because anything can happen in a single night (and truly anyone can win). Over the long run, though, there’s not really such a thing as luck; the prepared users win, and the unprepared lose. You can put yourself in a poor situation and win in the short-term, but that won’t continue to happen.

I think the Scott Adams quote “If you know you’re only going to succeed at 10% of the things you try, make sure you try 100 things” has a direct impact on tournament strategy. If you’re trying to build a bankroll and want quick growth with a big tournament cash, it makes sense to fire as many bullets as possible, i.e. play multiple lineups instead of using a single lineup and placing more of your cash on that one lineup. Five entries at $10 is superior to one at $50.

6) Study the history.

“Every game, every industry, has its history. A history of successful business models, of successful people, of styles in which the game was played. If you don’t love the history of what want to master, then you will never master it.

Poker players have read Doyle Brunson’s classic a dozen times. And entrepreneurs have all now read Walter Isaacson’s book on Steve Jobs and dozens of other biographies of successful businessmen.”

The “history” of daily fantasy is the data. My book Fantasy Football (and Baseball) for Smart People is filled with data on the best daily fantasy strategies-those that are actually winning leagues on DraftKings.

7) Master your psychology.

“View everything as an experiment. Every experiment has problems. As Peter Thiel says, ‘Get good at solving hard problems.’

When something doesn’t work out, see how you can make it 5% better the next time. There’s always a next time.”

Daily fantasy is unique in that the gap between the average user and a pro might not be as wide as you think. Lots of people know sports and some are really good at specific areas of the game, but it’s the collection of small edges that adds up to one big edge for the best players.

No single move is going to turn you from a loser into a winner; there’s no “secret” that the pros have found. It’s just about accumulating as many small edges as possible and getting incrementally better over the course of time.

8) Tewari Analysis

“Someone wrote to me the other day that they had made $50 million dollars when they were very young. Then very quickly, the person had lost $30 million and was feeling horrible.

Tewari analysis would say: ‘Well, what if you had simply gone from $0 to $20 million, rather than from $0 to $50 million and then down to $20 million?”

Last year, I subbed out a player at the last minute that ended up costing me $100,000. It felt pretty awful, and it actually affected my play for a brief period of time.

But the thing is…I actually won $1,500 that week. In any other week, I would be happy with that and have a positive mindset moving forward, but because I harped on what “could have been,” I got distracted.

If you play daily fantasy sports, you’re inevitably going to go through ups and downs. When you’re losing, it’s important to frame situations in the right way from a psychological perspective if you want to maintain a healthy (and profitable) mindset.

 

9) Play the cards in front of you.

“Too many people don’t have the right preparation. They haven’t tested their product. They haven’t studied the game they are in. But they play as if they are already on top.

Just play what is in front of you. Improve incrementally and be PATIENT. You will have your chance to win many times. But you will lose ALL of your chances if you waste them.”

I think this tip is pretty important in regards to bankroll management. There are a lot of users who have an edge that could potentially be exploited, but they don’t ever realize that edge because they become impatient. They might have a losing week or two and give up or get crazy with their bankroll.

If you feel like you can win on DraftKings, it’s important to stay in the game. Poker players sometimes throw away hands even when they think they’re a slight favorite to win if it significantly increases their risk of ruin, i.e. going “all-in.” In daily fantasy, you want as many opportunities to realize your edge as you can get, which means generally avoiding those “all-in” situations.

10) A bad plan is better than no plan.

“Having a bad plan gives you several things:

– realization that you need a plan

– opportunities to see if that plan is not working

– ways to analyze when the plan goes awry

– a chance to change the plan if it’s not working.

Having no plan gives you none of these opportunities to get better.”

One of the reasons I’m such a proponent of analytics is because a scientific, mathematical approach to fantasy sports is evolutionary; it’s self-correcting and changes based on new information. In short, bad stats can become good stats. A bad approach to daily fantasy can become a good one.

Don’t set your lineups blindly without any sort of strategy. Even if your plan of attack isn’t a good one, you can at least gather information and make tweaks, continually making small improvements until you’re a profitable player.

 

11) Maybe most important: THE THREAT IS STRONGER THAN THE EXECUTION.

“H. Ross Perot used to buy up shares of a big company (for instance, GM) and start shouting how poorly the company was run and that he could do a better job. He wasn’t really going to take over the company but many people thought he was because of his ‘threats’ and they would start buying up shares. Then he would sell his shares after they had run up significantly.”

Altucher’s quote about Ross Perot is directly applicable to daily fantasy sports, which is a form of a marketplace. Player salaries rise and fall based on performance, so your job is to determine when those salary changes are warranted and identify situations when a player’s cost isn’t representative of his fantasy outlook.

Just as Perot used inefficiencies in public psychology to profit, you too must identify marketplace inefficiencies to become a daily fantasy all-star.

The End.