should good traders be good poker players?

K

konviction

1st of all, this is not a " is trading gambling?" Thread. I believe that trading is a form of gambling. Over time I've gotten a bit better as a trader, but I can't play texas holdem worth a damn...maybe if it was charted in some type of visual form, then maybe. Poker and trading are similar, but there are several differences in this game of odds. If you feel free to add to my views..go ahead.

1. Trading is more about emotion, poker is more about chance. If I hold two aces in my hand, I know my chance of winning is X. After the flop, I know my chances increase or decrease by X. Pretty hard to do this with trading. The variables in a poker game change very little ( # of people at the table, size of bets, hands delt, etc..), while the variables in the market are endless.
2. In poker your forced to play or pay. Again in texas holden, im not familiar with other poker games, but if you don't like your cards, you still have to pay the ante before you fold. In trading, their is no immediate cost to not taking a trade. In a way, poker is more pressure because of this.
3. A round of poker only has one winner, however in he markets, there are winners and losers with every tick. In poker your forced to ride out he other players, but in trading, you can cash out any time.

That's all I can think of.
 
Quote from konviction:

1. Trading is more about emotion, poker is more about chance. If I hold two aces in my hand, I know my chance of winning is X. After the flop, I know my chances increase or decrease by X. Pretty hard to do this with trading. The variables in a poker game change very little ( # of people at the table, size of bets, hands delt, etc..), while the variables in the market are endless.
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There are plenty of emotions in poker. You just need to pick high enough stakes.

2. In poker your forced to play or pay. Again in texas holden, im not familiar with other poker games, but if you don't like your cards, you still have to pay the ante before you fold. In trading, their is no immediate cost to not taking a trade. In a way, poker is more pressure because of this.
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You pay for trading with your time. You have to spend it while you are waiting for your entry points.

3. A round of poker only has one winner, however in he markets, there are winners and losers with every tick. In poker your forced to ride out he other players, but in trading, you can cash out any time.
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In 9 haned game 1 winner is about 10% players. Same with trading 9 out of 10 lose and 1 wins.
 
The main difference between trading and poker (as far as I'm concerned) is that for poker the distributions are known and stationary.

The second main difference is that I usually don't carry sunglasses when trading :D

Ninna
 
Quote from nLepwa:

The main difference between trading and poker (as far as I'm concerned) is that for poker the distributions are known and stationary.

The second main difference is that I usually don't carry sunglasses when trading :D

Ninna
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The main similarity is that I can play poker and trade out of my home wearing my boxers.
 
Quote from konviction:


1. Trading is more about emotion, poker is more about chance.

I think emotions play a big part of poker. How many times have you had A/A and you just know the guy betting in front of you has flopped a set because you watched him for the past hour, but you still can't fold those aces, because statistically, you deserve to win. How many times have you forced the table to fold and you had rags, but you were the first to bet and the guys behind you just lost the last three hands.

2. In poker your forced to play or pay. Again in texas holden, im not familiar with other poker games, but if you don't like your cards, you still have to pay the ante before you fold. In trading, their is no immediate cost to not taking a trade. In a way, poker is more pressure because of this.

If you play on a table with just blinds and no ante, you can see 8 of 10 hands for free and decide if you want to play.

3. A round of poker only has one winner, however in he markets, there are winners and losers with every tick. In poker your forced to ride out he other players, but in trading, you can cash out any time.

I poker, you can win with the worst hand. In trading if you're long and the market tanks, you can't bluff your way out of it. Vise versa on a short.
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I love poker and see many similarities between poker and trading. I wouldn't say that by default a trader can be a good poker player or vice versa as there are differences as well. Both take time to learn and master - and there is no set in stone set of rules that work.
 
The biggest difference -- and it is a huge difference -- between poker and trading is that for most of us, in the size we trade, our trades are are virtually always faded if we choose liquid markets.

If I sit down in a 10 seat ring game and only play extremely high quality hands the two or three best players at the table will trip to that very quickly, the next level of traders will only be a bit behind them and before too long it will become a topic of conversation -- and derision -- so that even the dunces will understand.

I am forced to mix it up or the only time I will get called is when I am facing very strong hands. As I mix it up I, to some degree, I am forced to move away from the choicest hands.

As a trader I can wait for the very best setups and have my plays faded in exactly the same manner -- again, in liquid markets -- as I would if I played randomly.

More than any other factor it is the ability to "bet" high quality situations and be faded time and time again that makes the risk reward of trading so much better than poker.

A few summers ago I checked into an inexpensive hotel -- The Irish Pub -- in Atlantic City and played poker Tuesday night through Sunday night (about 45 to 50 hours a week) for the summer. During the 10 weeks I was there I covered my modest expenses (about $700 weekly all in), spent two days each week back at home in NYC and sharpened my game considerably.

I played only no limit hold 'em at a variety of stakes with two/five being the most common and occasionally five/ten but no higher. I have great respect for those that can make it in poker but my considered judgment is that the ability to cherry pick and still get faded in size make trading a far superior speculation.
 
Trading resembles more to horse racing than poker I think. There are market makers and a bunch of losers. And the newbies would always lose.

Where as in poker if you are dealt a pair aces you can go all in and most likely someone stupid enough would match you. And there are no skill's involved.

But gambling is gambling; everything else is relative.
 
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