Poker and the Beginning Trader

i just read this thread for the first time. i had skipped it because i don't know how to play poker.

traderNik,

i have never played poker in my life; i don't even know how to play, but that was a great post. i agree with much of what you said. i really do believe not making mistakes is one of the keys. evidence of this is that i've been able to lose money consistently--no matter what system i used. the common thread throughout all my trading is probably that i make the same mistakes even when i know not to.

here's a perfect example... you may know the following is NOT the way to handle the situation, but while in a real trade, your emotions will make you stray from your plan. say you're in a profitable trade and the gains are quickly erased. back at the breakeven point, you may know the right thing to do is get out. however, we all know what it is like at that point. you think things to yourself like, "i was just profitable! i had a profit, didn't take it, and now i have nothing! i'm gonna hold on to it til it goes back up again, i know i'm right!" then it slowly turns into small loss. then you say, "a small loss is ok, if it goes down any more i'll get out, i'm sure it'll go back up. i just had a profit and i know i'm right anyway." then sure enough the loss becomes larger and you say, "i can't get out now with this huge loss! this trade once showed a profit!" then it turns into a much larger loss than expected. you think to yourself, "holy shit, this is terrible, i better get out now! fuck it!" then you exit with some big loss. exactly the opposite of what you should have done AND YOU KNEW IT ALL ALONG.

wanting to be right = the enemy

i started a thread about this not too long ago. some people laughed at my thread because they thought it was totally useless. but imo, it made the greatest point of all. we all know we don't need to be right all the time to make money. yet when the time comes to make a trade, YOU STILL DO WANT THE TRADE TO BE A WINNER! wanting the trade to be a winner leads to holding on to a loser, hoping it becomes a winner! your emotions make you do exactly what you do not want to do. this is why it is so easy to lose money. another thread of mine asked why it is so easy to do the wrong thing, yet so difficult to do the right thing. well that is why.

i've said this recently in another post, but i really do believe you can make money by controlling your risk and not making newbie mistakes. once you have yourself under control, then you can work on finding and exploiting real edges that exist in the markets. that is what i believe sends the real traders over the top. there are some on this very site, but i'm not going to name them.
 
Gordon, you have to try this! It's soooooo much easier than the stock game. It's even fun. And this version of poker is so much simpler than the one we think of cowboys and gangsters playing. It's about as easy as Go Fish. "Got any three's? . . Go Fish" They allow you to play with fake money, so you can learn the game, for free.

I don't think me or you are ever going to achieve any real success trying to make money on the stock market. But I think we can with these online games. I only started this 10 days ago, although I had played some "poker" type card games on Yahoo. I'll help you along with this. You really won't need much help once you get started, you're smart enough to get the hang of it very quickly.

Your difficulty winning with stocks is not because you're not smart, no matter how many elite traders might tell you that it is. The difficulty with stocks is that being smart is not much of an edge, because the market is a crazy random sucker game. But in poker your intelligence is your edge, and you don't need genius level either. If you can match squares with squares, circles with circles, triangles with triangles, and red squares with red circles and blue circles with blue triangles, you can win at poker.

I said it in my early post in this thread, it's true for you also: the incredibly frustrating experience of trying to make money on this market is excellent training for being able to win at poker. Rather than the other way around. Your study of stocks and market theory are your edge for winning on these online games.
 
Quote from hii a_ooiioo_a:

I don't think me or you are ever going to achieve any real success trying to make money on the stock market. But I think we can with these online games.
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lmao..WHAT?! how you can make such a broad statement like that? i'm 24. i have time to learn from my mistakes. i've already learned a lot. i have confidence in myself that i will be able to do this in my lifetime. do i think it will be tomorrow, no. but i think i will be able to eventually. i'm not about to quit now.

also, if you tell yourself you don't think you are ever going to achieve success, you are DOOMED from the start! you have to believe you can do it, then keep at it. this applies to absolutely any situation. there's a quote like, "if you think you can, you can. if you think you can't, you can't." say you want to talk to some attractive girl. if before you do so, you think to yourself that she is too good for you, you will probably not allow yourself to succeed! maybe she will like you anyway, but when you talk to her, you'll sound like the loser you told yourself you were!

same goes for if you're fat and you want to lose weight. if you're not confident that you can stick to a diet or change your eating/exercise habits, you won't do it and you won't get the results you want!
Quote from hii a_ooiioo_a:

Your difficulty winning with stocks is not because you're not smart, no matter how many elite traders might tell you that it is.
More...
lol..that is another funny quote. :p
 
Quote from Gordon Gekko:

say you want to talk to some attractive girl. if before you do so, you think to yourself that she is too good for you, you will probably not allow yourself to succeed!

if you're not confident that you can stick to a diet or change your eating/exercise habits, you won't do it and you won't get the results you want!
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Suppose you meet a pretty and fun girl who puts you at ease, and doesn't try to make you feel that she is too good for you. And it suddenly hits you like a brick that all your self-consciousness and low self-esteem was derived from the fact that you were wooing this other nasty woman who was just using you for your money and didn't give a damn about your feelings, and on top of it all she was an ugly old whore?
I'm just telling you there's this attractive girl that you would get along with great, and here's her phone number, just give her a call.

This crazy market is an unhealthy diet that's making you unhappy with your appearance and also malnourishing. I'm suggesting a change in diet, at least take a taste and see what you think.

If you feel intimidated about card games, here's an easy one just to get you warmed up, I more or less started on cards with this one http://games.yahoo.com/games/login2?page=t21
 
The idea that some internal programming from childhood is making you lose because you feel you don't deserve it is false. The market doesn't know about your self esteem. You are losing at trading because you are doing the wrong things.

You see a range extension and you jump in, often too late because you are being careful and you want confirmation. But what you are really doing is buying at resistance (at the top). This is common because the market is in rangebound trading 90% of the time and this is also why your winnners are 0.25 ES points while your losers are 0.75 or even 1 point- you are buying at the top. No deep psychology, no zen here. You are just doing the wrong thing.

The reason why you don't get the beautiful girl is not because you feel 'unworthy' it is because she's not going ditch 6 good alternatives to go out with a busted, poor, broke, geek. No deep psychology here either. You already know which women are in your class and which are way out of it. Trust your feelings, Luke. Go out with women who actually might want to go out with you- leave the supermodels for Paul Tudor Jones.

Also, drop the BS psuedo Zen and new age crapola. It won't help you place a trade. If you like zen, here are two overlooked zen principles that actually might help- 1) right action- learn how to correctly place a trade which has a positive expected return and 2) practice- learn how to execute the correct trade automatically. Not as sexy as zen concepts like flow, but more useful.
 
"AND YOU KNEW IT ALL ALONG.

wanting to be right = the enemy


i've said this recently in another post, but i really do believe you can make money by controlling your risk and not making newbie mistakes. once you have yourself under control, then you can work on finding and exploiting real edges"

Hi Gordon

Your 'perfect example' must be all to familiar to many beginners.

Even though you haven't played poker, I can guarantee you that eliminating mistakes is the key to success in the very-low-limit hold-em games I have been playing.

You mentioned wanting to be right...another analogy for this is the golf swing. I find that my best days on the golf course are those during which I can remember to LET GO OF THE RESULTS of any particular swing. If I concentrate 100% on making a good swing, making sure I am staring right at the back of the ball at impact and beyond, forgetting completely about where the ball is going or how close to the pin it ends up, I find I play much better. If I am too worried about wanting to steer the ball to within 10 feet of that little hole, waaaaayy over there, things start to go badly. If you can get to the point where this is second nature, you can then move on to refocusing on the task at hand and thinking about individual shots a little more, because after you've done your thinking and you step up to hit the ball, you can click back into that mental space where it's just the swing and nothing else.

Anyway, I'll start another thread for the golf analogy... or maybe not :)

Puffy, this may sound a little Zen-ish to you :) but it's not - it just means you have to focus 100% on the task at hand. That whole 'childhood trauma' argument which is used to explain a lot of dysfunctional behaviour also seems to me to be a little disheartening.
 
Quote from Gordon Gekko:

....wanting the trade to be a winner leads to holding on to a loser, hoping it becomes a winner
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This is a big error in your thinking. Do I want my trades to be winners? Of course. Do I hold onto a loser (beyond where I originally decided to get out)? Never.
 
Quote from PuffyGums:

Also, drop the BS psuedo Zen and new age crapola. It won't help you place a trade. If you like zen, here are two overlooked zen principles that actually might help- 1) right action- learn how to correctly place a trade which has a positive expected return and 2) practice- learn how to execute the correct trade automatically. Not as sexy as zen concepts like flow, but more useful.
More...
Very well put, bravo.
 
Quote from hii a_ooiioo_a:

I don't think me or you are ever going to achieve any real success trying to make money on the stock market.
More...
That's a very insulting statement, and I'm glad Gordon didn't passively accept it.
The difficulty with stocks is that being smart is not much of an edge, because the market is a crazy random sucker game.
More...
While I'd agree that being smart isn't much of an edge in trading since you're up against some of the smartest people in the world, and I'd also agree that the outcome of any individual trade is random, that doesn't mean there isn't a predictable probability in various strategies. If it feels like a sucker game to you it will probably show up that way in the results of your trading. Anyway, you could easily be right that playing online poker may well be simpler than trading, so good luck.
 
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