From poker player to stock trader.

R

RYL

I found this place out by looking at the archives in twoplustwo.com (a popular forum for serious poker players). There was a poster who was a member of twoplustwo.com and a member at Elite Trader.com who suggested to take a look at this post---> http://www.elitetrader.com/vb/showthread.php?threadid=12455.

To give you a brief history on myself, I've been a winning poker player since November, 2004. I'm currently making $300/ hr. playing 4-tabling 1000NL at Party Poker. I play poker only for one reason and one reason only, to make money. I've also been a stockbroker for about 1 and 1/2 years so I have some general knowledge on stocks.

Some people might be saying to themselves, "This guy's making 300/hr. Why would this guy want to be a trader?" There's many reasons.

1. The richest trader is more wealthier than the richest poker player. There's several multi-millionaire traders. I'd be hard pressed to find even the best cash poker player professional with a net worth of 50 million if not 25 million.
2. To say you're a poker professional is looked down upon the general population because it's viewed as gambling(which it is, but people don't realize poker can be +EV).
3. I want to tell people I trade stocks for living and can make money doing so!
4. From 9am-4pm, poker table are generally tough so usually during those times I can trade stocks, and after 4pm I can play poker.

The only problem is, I don't know even where to start. I have $35,000 saved up and I'm willing to put up $5000 this year to trade. Is there any books or websites you guys strongly recommend for someone like me who doesn't know where to begin? Any suggestions would be appreciated. Thanks in advance, and I hope everyone makes a nice six or seven figure payday this year!!:D
 
Your reason for wanting this is all wrong. You think you will make huge money. You think it's impressive to tell people you trade for a living. Here's reality.........Less than 10% of the people that try this actually make it. Of the ones that make it........maybe 1% make those millions you mentioned and could give a crap what it is that they tell people they do for a living.
 
Quote from Weasel:

Your reason for wanting this is all wrong. You think you will make huge money. You think it's impressive to tell people you trade for a living. Here's reality.........Less than 10% of the people that try this actually make it. Of the ones that make it........maybe 1% make those millions you mentioned and could give a crap what it is that they tell people they do for a living.
More...

It's the same for poker. Less than 10% actually make it. Maybe 1% of those make a million. I read Theory of Poker, posted in twoplustwo.com and thousands of hours of poker to become a winning poker player. I just want to know simply what steps to take in order to be a money making stock trader.
 
It takes serious discipline, a true love and passion for the markets challenges, the ability to bounce back from being down and keeping your ego to a minimum when you are doing well as well as months upon months of making nothing (and possibly being down) all the while working your ass off to learn how to spot good opportunities. wow, what a run on sentence!!
trading is a very very demanding business. and the last thing you should be thinking about while you are learning to trade is how much you can make. Once you learn how, money will not be an issue


Quote from RYL:

It's the same for poker. Less than 10% actually make it. Maybe 1% of those make a million. I read Theory of Poker, posted in twoplustwo.com and thousands of hours of poker to become a winning poker player. I just want to know simply what steps to take in order to be a money making stock trader.
More...
 
I'm generally winning playing poker although i almost never make THE big gain.
I generally make the top 3 on my football/baseball/hockey pool.
I have a winning record with trading.

I've given up the dream of getting rich that way a long time ago. Just keeping my head out of the water is good enough for me. That's what the game is all about. Big gains mean big risks, and big risks mean in the long run, you will lose it all.
 
I used to know a guy who is a professional poker player like you. He also played 4 tables at a time on party poker. That must be the most someone can pay attention to at once I guess? Anyway when he was explaining his "system": his expectancy, his money management plan, etc... It sounded to me like poker was very similar to trading. I've always thought he would be a good trader.

I would imagine that the money management skills you have developed in poker, would carry over to trading very well. By "money management", I mean controlling your risk exposure... changing your bet size with the odds and knowing how much to risk so that you won't go broke from a bad string of bets. Proper money management is one of the most important skills traders need. It also seems to be one of the hardest aspects of trading for many traders to learn, so already having these skills gives you a nice head start in your learning.

Probably the main new thing you'll need to learn for trading is how to get an "edge". You already have an edge in poker...that is something that puts the odds consistently in your favor. I don't know much about poker but I imagine your edge (positive expectancy) in poker comes from knowing the odds on particular hands+intuitively knowing what actions your opponents will take from watching how they play? Well whatever it is, you'll need to develop something like that for the markets. That is you'll need to learn what the odds are for certain situations., then just use the money management skills you already have to use your capital appropriately when you see that the odds are in your favor.

(I hardly make any money trading myself so please take anything I have said with a grain of salt.)
 
If you make $300 an hour, I would stick to poker. I have a feeling the easy money has been made on both the long and short side of the market. This market is going to go sideways to down with short lived rallies like we just went through for the forseeable future. You're savings will get sucked out by attrition. Swing trade and play poker. That has potential.
 
trading is much harder to grasp because even if you do stick to your set of rules you could still lose money over an extended period of time. Applying a valid set of poker rules should put you ahead of everyone else and keep making you money. Especially with all the dumb money coming into poker rooms everyday. (if anyone knows it's me)

Trading is still dependant on the market. Some may disagree with me here, but no strategy will work in every type of market. I've been trading five years and had to change my strategy four times. Each time was like starting over.

Poker by nature always has money to take. Markets can go flat. whatever.

Poker doesn't change (unless they bring out a new face card, but not likely) and poker is growing. More and more people open accounts every day and that should be free money for a guy like you. In a way your catching a wave like I caught in 1999. Ride it till it's dead.

A good friend of mine told me this and it makes a lot of sense. Concentrate on one thing. Trading takes focus. anything but 100% is unacceptable. better to do one thing amazing than two things half ass.

For me, poker is fun. I am now down about $400 in online poker (it's just for fun, and that's my problem). I know what I should do I just can't seem to get myself to do it in the heat of the moment (sounds like trading)

Funny how I can make money trading and still there are days where I break all my rules trading. The only difference is it never gets to the point where I'm down money on a given year.

Maybe I need more than $400 to learn to stick to my rules in poker. Bringing up my next point, $5000 is borderline to make it in the trading business. I'm sure tons have done it but I would think one would need to have more risk capital than that. I'm sure you could get more from poker. but give yourself 25 000 of purely risk capital that you are fully willing to lose.

If you do make the jump here are some of the similarities I've noticed.

In Poker the more you bet, the more you learn about other players hands. Same as in trading. If you have the capital to move a market and you can't..... that should tell you something.

In poker doing the "right" thing to win is hard because of human nature. ie. "you want to play for as cheap as possible" will kill you in poker. In trading that equates to taking a trade that is feels safe. The best trades are the scariest. The ones that naturally feel good at the time are usually traps.

In Poker you make money off other people's greed and fear. same as in trading. Without it, I wouldn't have a job.

hope this helps, It's pretty much just rambling

oh and there is no such thing as a "NUT" trade in trading.

good luck
 
Nice post by GSCO,
I play poker and make money at it- and find it easier than trading because of the reasons he mentions.
You can always calculate the odds - to an actual number-with poker but not with trading.
The thing with trading that makes it appear simple is that the market either goes up, goes down or goes sideways. What is needed is judgement on how to read what is happening and weed out what is unnecessary for doing that.
For a beginning trader there seem so many different ways and methods that it takes thousands of hours just to wade through all the junk, and find what type of trading suits and how to go about it.
I also play on www.tradergames.com which is a mix of poker and forex trading- it might be right up your alley and is a good way to learn trading for a small stake.
 
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