Trading and Poker

I've been a trader/day trader for years. I recently took up poker at the suggestion of a friend, having long heard that trading and poker were similar in many ways. I've done suprisingly well in the few months I've been playing online (albeit play money.) I believe my trading experience has greatly helped my poker results.

Trading and poker are similar in the basic things essential to success, these being:

• taking sole responsibilty for your results
• money management
• emotional control
• being patient
• embracing risk
• playing percentages
• experience
• knowing the game

Taking responsibility is the most important and the foundation of all the others. Losing traders blame the market or their broker or their computer or the neighbor's dog barking when they were trying to place a trade. anything but themselves. Losing poker player blame bad beats, the "donks," their computer, the neighbor's dog, again anything but themselves.

Here's the bottom line though. If you blame anyone but yourself, you are a loser and will remain one until you realize that all the unfair things that happen in poker (or life for that matter) are part of the game, and that winners don't blame, they take action, they adapt, they find a way to win. In the end, winners in these games learn how to embrace risk and make it work for them

I put "knowing the game" last because, if poker is anything like trading, the first six are actually more basic than the last two. Experience and knowing the game are really one thing, knowing the game including study and other ways of learning.

However, losing traders are always looking for the "secret," that secret trading system that will make them rich. But trading systems are a dime a dozen. A poor trader can take a good system and still lose money, and a good trader can take a poor system and make money with it. What the losing trader won't face up to is the problem isn't the system, it's him. I have little doubt it's the same with poker.

Losing traders try to make back money they've "unfairly" lost by angrily doubling up. This is the stupidest thing they can do. Losing poker players move up a level to try to make back a bad beat, and end up losing five times more. What's the problem? Lack of self-control.

Basically 5 to 10 traders in 100 make money. The rest fund the winners. I assume the same is true in poker, though I've heard its closer to 1 in 99. This makes sense because of the "play" nature of poker. There are surely a lot more casual poker players than casual traders. Some traders trade "for fun" to "see what happens" but they don't do it for long. Besides, as a game, poker is much more fun than trading, although both have potential for unlimited income.

The stark success numbers should not scare you, however. You can become a winner. You just have the realize that the essentials for success come down to dealing with demons in your life you probably never thought you had: laziness, denial, deflecting blame, unwillingness to admit weaknessess, etc. Stay with it and don't let go of your dream, but don't quit your day job either, until it's time.

Hope this helps in some small way. See you at the tables.

GCB

I agree that poker and trading are closely related. You came from trading to poker, do you know if anyone did a study using poker skills to hire/train new traders?

greywind50 said:

I agree that poker and trading are closely related. You came from trading to poker, do you know if anyone did a study using poker skills to hire/train new traders?

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No, I don't, sorry.

I do know that poker has helped my trading. One thing it really helps is in realizing that one hand (trade) doesn't make you or break you. I realize more easily in poker that it's about the percentages.

Another is that dry stretches are the norm, but winning will come around again. This is hard to see when you are trading because it's easy to think your trading technique doesn't work anymore, when in fact the percentage of losing trades (hands) are just getting bunched together.

I've noticed my poker equity curve tends to look something like this:



With shallow drawdowns and then big jumps when I start winning again. This is the way it should be, in trading and poker.

A truism in trading is "cut your losses and let your winners run." The nice thing about poker is that if you play it right it's easy to make your winners much bigger than your losers. In trading you have to wait for your winners to get big and then sometimes they turn around and get small or become losers even. This would be equivalent to a "bad beat" in poker, where you did everything right but still lost. Happens.

I have some stocks myself.But still cant ensure wether stock market is predictable.I think poker has skill that can make you money.But to stock,I dont know.

the thing i agree with the most is your statement regarding self control. it is one of the most true things with putting your money on the line. you're gonna lose buddy. you're gonna have a lot of losing days...gonna have a lot of losing days in a row too.

my betting generally has come from football and horses before i messed with poker. i learned a lot of things that keep me from going bust in poker...same things that keep me from busting out in anything else. its college football, your 5 star bet of the century loses...lord help me, the same night, your for-fun 1 star bet that pitt beats the 28 point spread against west virginia works...in fact, pitt beats wvu...leaving you scratching your head going "dammit! i shoulda bet the money line!!!! i woulda won huge money!!!" ...but no you shouldn't have...there was on way pitt was beating wvu before that game started and you knew it, you knew it was the back yard brawl and they hated each other and it was gonna be a nasty game, wvu was gonna win by 50 or pitt was gonna hang in there and make a game of it no matter how lousy they were. one thing you know not to do is that you had a losing day even though you just watched an exciting game, you're pumped up, you won your little bet, you can't lose! should you look for a west coast game that's kicking off late and bet big on an over/under? no! call it a day, get out of there, there's always next week. you usually do all right; no need to double down now, might take you a week or two or three but you'll fix the loss with well thought out bets when you did your homework

so you just got killed...5 bets in a row at the race track, your horses didn't win, place, or show! and they were races with just 6 or 7 horses, maaaan are you retarded? what were you thinkin? your bankroll just took a booboo...but hey man, there's this race at indiana downs...snicklebritches is a 3:1 in a 6 field race...you won on snicklebritches before...just 6 weeks ago...this bet breaks every rule in the book with your system but come on, just one more bet, make it a big one, across the board, can't lose, no way snick is gonna let you down. should i? nope! cause there's horses racing tomorrow, after you played some poker and got some sleep, and got over the ouchie you got.

betting on what you think is going to happen sucks sometimes, cause "you think"...you never know. you may think very well a lot of the time, don't let an owie cloud your judgement. tomorrow is another day with more "i thinks" present. catch a spankin...hang out in the corner, cuss and sulk for a little bit, let the trainer get in your face, get you some ice, try to slow that swelling down, and figure out what the bad guy is doin, and get back in there for another round...tomorrow

There are a lot of successful pro poker players who were traders, Phil Laak comes to mind.

GCB said:

No, I don't, sorry.

I do know that poker has helped my trading. One thing it really helps is in realizing that one hand (trade) doesn't make you or break you. I realize more easily in poker that it's about the percentages.

Another is that dry stretches are the norm, but winning will come around again. This is hard to see when you are trading because it's easy to think your trading technique doesn't work anymore, when in fact the percentage of losing trades (hands) are just getting bunched together.

I've noticed my poker equity curve tends to look something like this:

With shallow drawdowns and then big jumps when I start winning again. This is the way it should be, in trading and poker.

A truism in trading is "cut your losses and let your winners run." The nice thing about poker is that if you play it right it's easy to make your winners much bigger than your losers. In trading you have to wait for your winners to get big and then sometimes they turn around and get small or become losers even. This would be equivalent to a "bad beat" in poker, where you did everything right but still lost. Happens.

Click to expand...

man your poker curve looks like small little waves compared to the tsunamis in my graph

Infamous1020 said:

man your poker curve looks like small little waves compared to the tsunamis in my graph

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Well, the graph is idealized to give the basic idea, and I'm talking about play money. But basically that's the trader in me. I started playing poker to help my trading, so I wasn't interested in going all in to see how much I could win fast, because you would never do such a thing in trading. I was interested in seeing if I could steadily grow my bankroll with little risk and a steady graph. In other words, I wanted something predictable. Basically I've been able to do that. Though who knows how it would go with real money.

GCB said:

Well, the graph is idealized to give the basic idea, and I'm talking about play money. But basically that's the trader in me. I started playing poker to help my trading, so I wasn't interested in going all in to see how much I could win fast, because you would never do such a thing in trading. I was interested in seeing if I could steadily grow my bankroll with little risk and a steady graph. In other words, I wanted something predictable. Basically I've been able to do that. Though who knows how it would go with real money.

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Real money is completely different to play money.

Just load your account up with $500 and start playing the low stakes cash tables.

5 - 25NL (you will be bankrolled for any of those)