Here is a great example:
http://www.pokerlistings.com/blog/dw...-hand-from-hsp

I just registered to make this comment so appreciate it

Another example

Our opponent floats a twotone flop and a flush card comes off. We bet and he raises. Now we know our opponent thinks we think he has a flush. We know his though process and that he does this way too often without a flush though, so we snap him off with our pair.

thinking levels get deeper when you play players you know alot as well and can lead to some exciting play

a simple example would be continuation betting a dry flop, you know that you likely had the best hand preflop and the flop is likely to have missed your opponent so you make a c-bet. Your opponent may have realised this however, perhaps you have been raising the btn frequently and he may decide to play back at you with a raise as a bluff. The result of this is that to adjust to each others strategy you each adjust your own as well as bet sizing etc, as a result you both move closer and closer to an equilibrium strategy

Are there any articles on this topic? I have never heard of this before and it seems interesting. Does everyone apply this theory everyday when they play?

A word to the wise for those of you working up from the lowest stakes. I've recently been super-busto for one reason and another and playing very low limit MTTs and although in general I'm pretty good at adjusting, I've often found myself on the 1.5 level and still it's too high. I cannot stress enough what a danger this is when you start to learn proper poker strategy but are still playing micros - it's often right to just play your own cards! I can't tell you how many times I've made a thin value bet with 2nd pair top kicker and run into the second nuts that just thought that's how you're supposed to play poker - make a strong hand, you check! Or made a straightforward bluff on a 6789 board vs someone who very clearly has nothing, and he snap-calls with a pair of 6s. Against these players you MUST play 1st level and 1st level only. How many bets is my hand worth? What size of bet is my hand worth? Remember there are no prizes for getting on the highest level, only for being 1 higher than your opponent currently understands.

Edit: I suppose in a sense there is a zeroth level which is purely reactive ('I have something, I call!') as opposed to the first level where you have the option of concealing your hand strength, albeit still not acknowledging your opponent's hand

You do it everyday. We all do.

You have 6 6 on the button, it folds around to you, you raise 3xBB. SB folds, BB calls. Right now you are doing three levels of thinking:

1st Level: Your cards / 2nd Level: What does your opponent have/
3rd Level: What does your opponent think you have

1st Level: I hope I flop a set or at least lower cards 2nd Level: he's probably just defending and might have nothing 3rd Level: he might think I was just stealing and I have nothing

Flop comes Q 6 4

BB checks

1st Level: OH BOY I have trips! 2nd Level:he probably still doesn't have anything and will fold if I bet ...

You check

3rd Level: Now he thinks I was on a steal, I hope

Turn comes - now board is:

Q 6 4 9

BB makes a pot-sized bet

Level 1: I still have trips! Level 2: He might've he paired that 9 Level 3: if he thought I was stealing he thinks I might not have anything still so if I call he might think I am on a straight draw of some kind Level 4: trying to suck out on his pair

You call

River comes - board is:

Q 6 4 9 4

Level 1: WOOHOO! FULL FREAKIN' HOUSE!!! Level 2: Man, I hope he was actually betting a pair of 4s and made trips, Level 3: I wonder if he'll bet again because I would have missed my straight draw? ...

BB checks.

Level 1: WOOHOO! STILL FULL FREAKIN' HOUSE!!! Level 2: Maybe he actually paired the Q and will call something -

You bet the pot, hoping it looks like a bluff because...

Level 3: ...he put you on a steal and then a busted straight draw....Level 4: and he thinks you are putting him on the pair he has.

BB goes all-in.

You were right - he was just defending with a crappy 9 4

well said

that was an enjoyable read, thanks!

at what level is image manipulation, metagame and balancing employed

The higher levels, of course, but not only because the players are better - it's because the fish pool is smaller, so you'll be facing the same players over and over again; and they'll start to read you very well, requiring you to 'mix it up.' Even fish can adjust to your play - I know one who, after having overplayed TP to me for two buy-ins, avoids me whenever possible. Usually the first time you stack someone w/ a set v. overpair, he'll regard it as a cooler as he had no reads. But then he notices that you don't feel confident bloating the pot w/out at least two pair, causing him to fold to your flop aggression more often. So now it's your responsibility, assuming you want to keep playing with him, to start bluffing HIM more by raising flops because, one, that play should show an immediate profit and, two, once he makes an adjustment you can start getting paid off again...

I'd say that many players worry way too much about balancing and range-merging and advanced concepts like those when they should instead focus on fixing fundamental leaks

Definitely the higher levels as you'd need competent and intelligible opponents who think on a high enough level to where those tactics would be useful and effective.

Basically the whole thing with the levels of thinking is to: help gauge where you are personally as a player, what your opponents are capable of, and ultimately what level you should be thinking on so that you have edge on your opponents. As Sklansky says, there's no need to be thinking on level 3 when you playing a level 1 opponent who is solely concerned with the strength of their own hand. You need to be just one level of thought above your opponent to have effective edge on them. Actually, thinking on a level too high relative to your opponents level is not only unnecessary but can actually cost you money as it becomes easy to "over think" certain situations when the correct move is quite plain and simple.

EDIT: I realize this is very much common knowledge now and that this thread is really old but I was searching for a specific thread I saw a while ago on leveling and I decided to throw a post on here, sorry for taking up space

jesus

there are only 3 levels. no need for 4567asdf

currently on level 18 thinking
villain is on 17 = profit

Can someone give an example of levels 4 and 5 as I find it confusing there?