Trading vs Playing poker, will it help with my trading?
- Thread starter magix3d
- Start date
One thing that needs to be pointed out is that specific skill transfer across domains has not been ever demonstrated. In other words, even when people reach very high level of performance in a specific task that the skills don't transfer to closely related task.
Look at how many professional athletes are able to be stars in 2 or more sports, none that I know of. Generally any professional athletes have above average athletic ability but are tuned to one sport or another. This is why that firms who seek poker super stars are misguided (and should be seeking talent like myself). It is very unlikely that a poker super star would transfer into more then a good trader. I.e he is unlikely to be a super star trader. While a super star trader is already a super star trader.
Key points:
1. A professional gambler in any game has a higher probability of being an average to good trader but is no more likely to be great then any other person.
2. Domain specific skills among even highly similar tasks/games do not transfer. These are not very similar games, even.
3. The greatest advantage of gambling for traders is to learn and become familiar with non domain specific skills. Poker does offer lessons for the trader but the lessons are only applicable in certain cases. The lessons poker can teach the trader are only worthwhile if the trader already has a strong ability to return a profit. Nothing in poker will make one profitable in trading. The valuable lessons I learned would be a focus on the bankroll, how often that even high probability odds fails, and the importance of consistency.
Look at how many professional athletes are able to be stars in 2 or more sports, none that I know of. Generally any professional athletes have above average athletic ability but are tuned to one sport or another. This is why that firms who seek poker super stars are misguided (and should be seeking talent like myself). It is very unlikely that a poker super star would transfer into more then a good trader. I.e he is unlikely to be a super star trader. While a super star trader is already a super star trader.
Key points:
1. A professional gambler in any game has a higher probability of being an average to good trader but is no more likely to be great then any other person.
2. Domain specific skills among even highly similar tasks/games do not transfer. These are not very similar games, even.
3. The greatest advantage of gambling for traders is to learn and become familiar with non domain specific skills. Poker does offer lessons for the trader but the lessons are only applicable in certain cases. The lessons poker can teach the trader are only worthwhile if the trader already has a strong ability to return a profit. Nothing in poker will make one profitable in trading. The valuable lessons I learned would be a focus on the bankroll, how often that even high probability odds fails, and the importance of consistency.
While you may have an extensive trading background it's clear that you aren't knowledgeable on what is required to make a successful poker player. Long term successful poker players (not turned famous overnight tourney winners) make their money and stay in the game through treating poker like a business.
Even among the Top 1000 Poker Players...
The vast majority have serious, compulsive gambling problems...
The majority are are on a busto/robusto rollercoaster...
And rely on the staking business and casinos to put up buy-ins...
And keep them playing for a long career.
Only certain older, veteran players...
That have diversified into real estate and business ventures...
*** And pay taxes ***...
Achieve a level of financial stability.
There is a game-specific reasons for this...
Very aggressive, well-timed gambling is required for poker success...
Whereas a trading firms can practice various forms of arbitrage...
Without ever taking a major risk (like my firm).
Trading and poker attract a very different psychological type...
You can be great at one or the other... not both.
You are either an arbitrageur that minimizes volatility...
Or you are a gambler that NEEDS action and chooses large volatility...
And these are polar opposites.
Applying poker variance to trading...
Virtually always results in disaster.
And applying trading discipline to poker...
Results is losing weak-tight play.
The only real overlap...
Is understanding the nature of randomness and Zero Sum Games.
It comes down to:
(1) You can chose low variance A.
You can make unlimited money.
You can run a socially respectable business.
You make a positive contribution to society BY BUILDING...
Creating jobs, etc
(2) You can choose variance 20 times A.
You can make limited money with wild swings.
You're profession is socially marginal.
You make a negative contribution to society BY EXPLOITING...
Taking money from people that actually work via trickery.
Very different people chose 2 over 1...
Not really making a moral judgement here...
But by age 30 people usually firmly decide...
Whether they will devote their lives to BUILDING or EXPLOITING.
(1) You can chose low variance A.
You can make unlimited money.
You can run a socially respectable business.
You make a positive contribution to society BY BUILDING...
Creating jobs, etc
(2) You can choose variance 20 times A.
You can make limited money with wild swings.
You're profession is socially marginal.
You make a negative contribution to society BY EXPLOITING...
Taking money from people that actually work via trickery.
Very different people chose 2 over 1...
Not really making a moral judgement here...
But by age 30 people usually firmly decide...
Whether they will devote their lives to BUILDING or EXPLOITING.
well stated, deedeetwo....
3 aces and 3 cheers for your exposition....
the problem with this thread is that it is filled with a bunch of shitty poker players and even shittier traders. quantitative poker is based on the theories and the playing history of top online players that have played over 1million hands, they can precisely identify what works and what doesnt.
30 buyins is standard to sit at a game above 200nl.. that means you need $6000 equity to risk a $200 buy in. going to a casino and playing 1-2NL with less than 5-6k bankroll/cash equity- potentially in your bank account or at home- is gambling. the same as someone trading 1 ES contract with 5k- gambling
there is a mathematically correct decision at for every event in poker based on cards, position, stack size, # of opponents, opponent stack size.. there are different "rules" for tournaments or limit poker. the most subjective aspects such as "reads", or table dynamics is a more advanced topic and not necessary at low limits.
the user who posted differences being poker a closed end game vs trading open ended is major. the only similarity i see is that money management rules/skills are the key to sucess.
30 buyins is standard to sit at a game above 200nl.. that means you need $6000 equity to risk a $200 buy in. going to a casino and playing 1-2NL with less than 5-6k bankroll/cash equity- potentially in your bank account or at home- is gambling. the same as someone trading 1 ES contract with 5k- gambling
there is a mathematically correct decision at for every event in poker based on cards, position, stack size, # of opponents, opponent stack size.. there are different "rules" for tournaments or limit poker. the most subjective aspects such as "reads", or table dynamics is a more advanced topic and not necessary at low limits.
the user who posted differences being poker a closed end game vs trading open ended is major. the only similarity i see is that money management rules/skills are the key to sucess.
I think it is possible that you are a successful trader for a large firm following their formula.
It is clear from this quote that you don't understand long term winning poker. Almost no top poker pros who have been around for years knowingly take risks large enough to result in ruin.
This is a naive statement from someone who believes all the hype about successful poker pros, but knows very little about them.
Another extremely naive statement. Top poker pros are the casino and the weaker players are the customers.