Howard Lederer: On Poker and Trading

Lederer hasn't won anything significant in poker in years. His sister Annie "P"uke has actually done better than him over the years, and she isn't even that great a player anymore. All you see are commercials of her and Hellmuth doing those ridiculously stupid poker shows. lol
Hey Annie, forget trying to cake on the makeup, it doesn't help.
 
Quote from rc822:

"... Hey Annie, forget trying to cake on the makeup, it doesn't help.
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Beauty must be "in the eye of the beholder"... though she's aging and, sort-of chunky, my buddy thinks she's HOT.. for a broad with 4 kids..!!
 
So does Bill Clinton but we don't agree with him either!


Quote from Scataphagos:

Beauty must be "in the eye of the beholder"... though she's aging and, sort-of chunky, my buddy thinks she's HOT.. for a broad with 4 kids..!!
More...
 
Quote from makloda:

http://www.bloomberg.com/apps/news?pid=20601109&sid=alximP6.Eta8&pos=10

"Nov. 20 (Bloomberg) -- Brandon Adams, who teaches behavioral finance at Harvard University’s Department of Economics, says some of the best candidates for Wall Street trading jobs are the professional card players at FullTiltPoker.com and similar Web sites. "
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Pretty timely article vis-a-vis this thread. It would seem that the Street disagrees with those who maintain that poker's skill sets are not relevant to trading. Having played both poker and traded professionally for years, the similarities are obvious to me...not sure why some people don't see it.

"An increasing number of hedge funds and brokerages are scrutinizing professional poker to find talent and analytical tools, according to financial recruiters including Options Group, a New York-based executive-search company. Susquehanna International Group LLP, the Bala Cynwyd, Pennsylvania-based options and equity trading company, uses poker to teach strategic thinking.

“Someone who has made a successful living as a poker player for a few years would more likely be a good trader than someone who hasn’t,” said Aaron Brown, a 53-year-old former poker pro who is now a risk manager at AQR Capital Management LLC in Greenwich, Connecticut, which oversees $23 billion. “They know to push when they have the edge and they know how not to bust, and that’s a tough combination to find.”

Skill Sets

Skills that define successful traders -- rational approach toward risk, speedy decision-making under pressure, discipline and a well-trained memory -- are the same ones that separate elite poker players from ones known as “dead money,” financial recruiters say.

After the World Series of Poker started in Las Vegas four months ago, Options Group recruiter Simon Satanovsky said he received a hedge-fund request for online poker players with no financial experience. He wouldn’t identify the client."
 
Quote from makloda:

http://www.bloomberg.com/apps/news?pid=20601109&sid=alximP6.Eta8&pos=10

"Nov. 20 (Bloomberg) -- Brandon Adams, who teaches behavioral finance at Harvard University’s Department of Economics, says some of the best candidates for Wall Street trading jobs are the professional card players at FullTiltPoker.com and similar Web sites. "
More...

That guy blew out his trading account in 2 days during the summer of 2008, leaving his prop firm with a 7 figure account deficit, so I'm not sure he is the best person to ask as to what makes a good trader.

The main problem is that poker - especially no limit, where the big money is - rewards aggression whereas the market rewards it for a while then punishes it. Poker doesn't have any black swans or even grey swans, whereas in the markets you can never really be sure you hold the nuts. You need to be inherently more conservative as a trader than as a poker player.
 
Quote from Ghost of Cutten:



The main problem is that poker - especially no limit, where the big money is - rewards aggression whereas the market rewards it for a while then punishes it.

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Contrary to popular belief in cash games (or what is commonly called a ring game as opposed to a tournament) the biggest stakes are generally limit games. As an example what is known as the "Big Game" is at the Bellagio in Vegas starts each day in the early afternoon and is a $1,000 - $2,000 limit game. The buy in as set at a minimum of $100,000 and there have been many days where individual players have won and lost upward of $500,000.

Because of the nature of no limit it is much more common for someone with a hand that is clearly "playable" in limit to fold it in no-limit thereby causing a fair amount of no-limit hands to end either pre-flop with a small pot or on-the-flop with a smallish or medium size pot.

The better players in Atlantic City are quite comfortable sitting in on the biggest weekday no-limit hold 'em games with a bank of three or four thousand yet would consider themselves under capitalized in the $75 - $150 stud game that is spread regularly at the Borgata.

There are a number of first rate players with big bankrolls that will chose high stakes limit to no-limit every time. Their feeling is that a lucky amateur has a much higher chance of cleaning them in a single pot than he has grinding it out 150 or 200 hands.

If anything high stakes limit poker is where they should look for potential traders. The skill sets are more similar and the mind set of those that play big limit poker is much more likely to produce a long term profitable trader.
 
Quote from Ghost of Cutten:

The main problem is that poker - especially no limit, where the big money is - rewards aggression whereas the market rewards it for a while then punishes it.
More...
I disagree. IMO, both reward discipline first and foremost. You bet aggressively only if you have reason to believe that the odds are strongly in your favor.
 
Quote from thurstonhowell3:

Pretty timely article vis-a-vis this thread. It would seem that the Street disagrees with those who maintain that poker's skill sets are not relevant to trading. Having played both poker and traded professionally for years, the similarities are obvious to me...not sure why some people don't see it.

"An increasing number of hedge funds and brokerages are scrutinizing professional poker to find talent and analytical tools, according to financial recruiters including Options Group, a New York-based executive-search company. Susquehanna International Group LLP, the Bala Cynwyd, Pennsylvania-based options and equity trading company, uses poker to teach strategic thinking.

“Someone who has made a successful living as a poker player for a few years would more likely be a good trader than someone who hasn’t,” said Aaron Brown, a 53-year-old former poker pro who is now a risk manager at AQR Capital Management LLC in Greenwich, Connecticut, which oversees $23 billion. “They know to push when they have the edge and they know how not to bust, and that’s a tough combination to find.”

Skill Sets

Skills that define successful traders -- rational approach toward risk, speedy decision-making under pressure, discipline and a well-trained memory -- are the same ones that separate elite poker players from ones known as “dead money,” financial recruiters say.

After the World Series of Poker started in Las Vegas four months ago, Options Group recruiter Simon Satanovsky said he received a hedge-fund request for online poker players with no financial experience. He wouldn’t identify the client."
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aaron brown told me the opposite.
traders make poor poker players because they have no patience. poker players make poor traders because they are too directional in their thinking. they think it should be a certain way and they go for it.
 
This is the retail mentality, continually perpetrated by people that have never seen what trading is when it is run like a business.

The point he makes isn't wrong, it is just that he is perpetuating the way retail traders trade, which in the face of no real edge, becomes poker-like. Let me be more clear. Take Macys or other retail stores like that. It is well known that many of these businesses just try to break even or lose a little most of the year, and then they make a killing during the holidays. This is akin to taking small loses and letting the winner run. It is a statistical business that barely works. The statistical camp will sight an instance here or there, like Paulson or Livermore as their evidence, but this is not the way Rentec trades, nor Citadel, nor the countless numbers of boutique trading shops that litter downtown Chicago.

What I am saying is that trading as a business is more like operating a Jewel or a Dominicks. People walk in on a daily basis, and you ring the cash register continously. Your margins are small, but leverage it enough and you have a business.

I am not blaiming the retail trader. Hardly, it is extremely difficult to get to be like these guys that ring the cash registers every day, mostly because it takes money to make money, something the retail trader lacks. So when you have to make $50,000 on a $50,000 account (100% returns) with retail leverage, you are reduced to statistical hopes and a bartending job at night.

The closest thing I have ever seen on ET that is representative to what trading as a business should be, is the Bright OO strategy. Coupled with leverage and keeping your costs low, it behaves much like a business does. That trade is crowded now, but when done right, you leave _every_day_ with more money than you had at the beginning of the day after expenses.
 
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