Trading vs Playing poker, will it help with my trading?

Quote from DeeDeeTwo:

As someone who is a VERY successful trader...
And have executed about 1,500,000 trades in my career...
And have put a LOT of time into poker over 5 years...
I almost 100% disagree with you.

Your thinking is based on the erroneous belief...
That successful traders make large directional bets...
And somehow outmaneuver large firms...
In a rigged, computer-driven, corrupt ecosystem...
When in fact virtually all successful trading firms...
Practice some form of market-neutral arbitrage or make markets.

The core skills required to play elite poker...
Are very different from those required to run a risk arbitrage operation...
Specifically, a poker player MUST enjoy gambling...
And MUST enjoy taking risks large enough to result in ruin.

That's why 90% of poker pros have degen gambling issues...
Self-identify themselves as "gamblers"...
Having CHOSEN a career with 10-20 times the variance of trading..

In sharp contrast...
Pro Traders view themselves as businessmen...
And generally have no interest in high risk gambling.

The mathematical skills required may be similar...
But poker and trading on an elite level...
Require very different personality types.

To put it a different way...
Successful trading firms position themselves as the Casino...
Top Poker Pros are forever the Gambler.
More...

I think this post is the most accurate post on this thread. If a trader becomes highly skilled at both trading and poker, he will soon realize that poker is a complete waste of time. Sure, the occasional game here and there for fun, but nothing to seriously waste time trying to make money at.

Beyond math skills, the two have little in common. For those who say they are very similar, it is likely because they in fact don't have a trading edge and are actually gambling while trading. Hence, the two would seem very similar. But to the trader who actually has a distinct edge in the markets, trading isn't gambling anymore. It doesn't make his stomach turn or get him emotional. He just grinds it out each day. Knowing that his system has a positive expectancy over time. He simply needs to manage the capital well enough to overcome and outlast any bad luck streaks.
 
For my own sake, I will post what I think. It's for me only, because I got distracted and confused by the stupid comparison from time to time.

Playing poker is totally different from trading. Playing poker is gambling, trading is not.
 
I think trading is more closely related to the skill set for a professional blackjack or video poker player. Find edge, size bets to your bankroll, repeat.
 
Quote from Notes123:

For my own sake, I will post what I think. It's for me only, because I got distracted and confused by the stupid comparison from time to time.

Playing poker is totally different from trading. Playing poker is gambling, trading is not.
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+1

Only gamblers think otherwise. Trading is not gambling in principle although some ex-poker players can turn it into one.

Oh man, they make such ridiculus statements, like that in both poker and trading position size is important, just forgetting that in poker as soon as you size your bet you cannot reduce it. Only this basic fact makes the two games fundamentally differerent.
 
Quote from DeeDeeTwo:

This is nonsense... you are selling a product.

Over the years my hedge fund variance...
Is about 3% of what is typically experinced by elite online NLHE players...
(Yes, I did the math)...
And virtually every trading firm in existence has < 10% of NLHE variance.

Since you can choose your variance in trading...
Only a complete degen would trade anywhere near NLHE variance...
And would be an almost certain blowup.

You can be mediocre at both trading and poker...
But to excel at one or the other VERY SPECIFIC personality traits are required.

To oversimplify...
You must enjoy gambling to be a successful Poker Pro...
Conversely, you must be an Arb and avoid gambling to run a Trading Firm...
These are 2 completely different mindsets.
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You are the one talking nonsense. The fact that most NL pros take excessive risk has ZERO to do with the skills required to become good at either discipline.

You say poker players cannot choose their variance- totally false as you can choose to move up and down in table stakes anytime you wish. You also say you must enjoy gambling to be a successful poker pro- this is even more of an ignorant post. I spent quite alot of time in casinos, both here in England and in Las Vegas, and I never played any other table games such as roulette or blackjack. Being a loser in a game rigged against me does not appeal to me at all. I am not a natural 'gambler', I am a natural strategist and I love competition and warfare of various forms.

It is just the nature of those who are successful at poker (often free spirited, entrepreneurial types who are more tolerant of risk) as opposed to the average hedge fund manager. If every hedge fund on the planet decided tomorrow to increase their risk limits per trade from say 0.5% per trade as is pretty standard now to 5%, would that change the nature of the game and what skills it took to be a success? Obviously not, your argument totally misses the point of my post.

I finished my degree at Oxford University and was applying to various Investment Banks- I did not send the applications and decided to become a professional poker player, whilst many of my peers went into those city jobs in London. That alone should address your issue with high stakes NL variance- how many conservative types would take such a non-traditional path to success?

(And for your information at that time I earned more than all of my IB friends for 3 years, and the largest drawdown on capital I had was 30%, with a typical drawdown being about 15%)
 
Quote from BlackBison:

If every hedge fund on the planet decided tomorrow to increase their risk limits per trade from say 0.5% per trade as is pretty standard now to 5%, would that change the nature of the game and what skills it took to be a success? Obviously not,
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Given the drawdown levels of most hedge funds during 2008, it does not follow that they use the 0.5% risk limit.
 
Quote from tim888:

Given the drawdown levels of most hedge funds during 2008, it does not follow that they use the 0.5% risk limit.
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Many funds do only allow discretionary traders to risk 0.5% to 1% per trade- however, this does not account for two things:

1) Several highly correlated trades amplifying risk in certain market conditions (eg. forced deleveraging). I know one big fund manager who regularly hits his risk limit in a market and then starts trying further increase his exposure by trading other correlated markets if he has conviction in the trade. Naturally this pushes his total risk well above the limits in the case of a large move against him.

2) Huge, fast market moves or big gaps that can put a position well over the risk limits extremely quickly, before risk managers can take action to liquidate a huge position (see the recent moves in the yen).

The 0.5% is a generalisation, and many modern hedge funds are small boutique style operations centered around one trader. So if they really don't want to get out of a position they can face very large drawdowns.

Also in 2008, there were no doubt many funds trying to pick the bottom of the financial stocks and indices, so those 1% losses can add up very fast if you keep repeating the same bad trade every day!
 
Quote from DeeDeeTwo:

Your thinking is based on the erroneous belief...
That successful traders make large directional bets...
[...]
When in fact virtually all successful trading firms...
Practice some form of market-neutral arbitrage or make markets
More...
The only one holding erroneous beliefs is you.

How much of the trillions in global risk capital is invested in market-neutral strategies? A tiny fraction.

The large majority of the successful traders in history made their fortunes with large directional bets with skewed risk/reward ratios and rigorous risk controls.
 
Quote from Butterball:

The only one holding erroneous beliefs is you.

The large majority of the successful traders in history made their fortunes with large directional bets with skewed risk/reward ratios and rigorous risk controls.
More...

Proves my point... that if you read ET long enough, someone will say something which is intelligent and entirely accurate.
 
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