Trading vs. Poker

Daal said:
Bigger egos tend to get punished in the markets because the market is what is called a "continous process", if you don't actively close out your losing position you can lose forever and even owe money. In poker and gambling in general there is usually a point where the betting stops by itself (you lose all your chips, the sports game you bet on ends and the bets are settled, etc), it whats is called a "discrete event". You have to actively rebuy or bet again, in the market, most bests are forever if you don't close it. This leads to flaws in discipline or ego based mistakes being punished more severly
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It is good to hear "continuous process" and "discrete event". Also unlike stock market, ego is another important factor in poker.
In Brick and Mortar poker room, many stupid players tends to play wrong based on his/her ego himself . Even in online poker, almost none use programming.

However it is possible to trade in stock market with no ego, and even no ego permitted.
One example of trading with no emotion is systematic trading with computer program only, to elimainate personal human ego/emotion.
He should not see the market depth and should not order stop loss based on his personal and temporal emotion.
In poker, programming is usually not possible.

Among the many well-known continuous processes, equity prices follow Wiener (Brownian motion) process, if I heard correctly.
Price change (represented by percent, such as today Dow index -2%) follows log-normal.
 
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Specifically, in Hold'em, there are about 4 bettings (preflop / flop/ turn /river) so that poker might be a discrete game based on 4 steps of conditional probability.
It might be a case of Markov chain, IMHO.

Meanwhile, trading is continous so that there will a lot of small edge to search. In future/option, one can use many variants like butterfly strategy.

Even, in no-limit Hold'em, one cannot lose more than his principal chips on the current table. But in some option one can lose more than his available cash.
 
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Daal said:
Poker players tend to have bigger egos (due being more of a people game, you get to be "superior" to your opponents and "crush" them, this doesn't happen in the market as you tend to beat a ticker rather than a person). Bigger egos tend to get punished in the markets because the market is what is called a "continous process", if you don't actively close out your losing position you can lose forever and even owe money. In poker and gambling in general there is usually a point where the betting stops by itself (you lose all your chips, the sports game you bet on ends and the bets are settled, etc), it whats is called a "discrete event". You have to actively rebuy or bet again, in the market, most bests are forever if you don't close it. This leads to flaws in discipline or ego based mistakes being punished more severly
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The thing is this guy is a math major, he runs pure strategy no emotions convinced he has some sort of a disorder, plays 6 tables at once and runs a specific poker strategy. He wins over the long haul because buy in is only 10 and if he places in 3rd its 200 2nd 400 and 1st 1000.

His strategy is really basic and only able to fool amateurs I guess thats why he's still playing at such low stakes.

He traded indexes and commodities. He just couldn't handle it, couldn't accept that he was wrong on his analysis and came to the conclusion the market is rigged. People underestimate what real traders have to put up with on a mental level.
 
Another huge difference between poker players and traders is that the very best poker player in the world may occasionally make several million dollars in one year... but the very best trader in the world can consistently make billions of dollars a year. That is a vast ocean of difference. There are several such traders who make billions per year and many traders who consistently make millions per year while there are very few poker players who even make millions per year consistently and none who make billions.
 
Fundlord said:
wins over the long haul because buy in is only 10 and if he places in 3rd its 200 2nd 400 and 1st 1000.
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Do you mean Martingale bet (strategy) in poker? Trading has Kelly, in addition to the Martingale.

Therefore trading has a lot more flexible strategy choices than poker, even than no-limit Hold'em.
There is no all-in of the opponent(s), in the sense that Wall St has trillion dollars much larger compared to poker market.

Poker is heads-up or three-way most cases, however trading is multi-way (too many players in same prices) game.

Furthermore, poker has anti, for mandatory small bet, unlike free waiting in trading for search of proper entry(buy) time and proper symbols (poker table).
Actually poker is a struggle to take small amount of anti, but equity trading is a struggle for previous price (cap gain) and right to take dividend.
Traders can wait (enough time) to join more than 100 tables together, with use of (real-time) data feed of 500 equities such as SnP500.
 
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One more difference.

Stock brokers provide API for easy access to the server and Wall St, while poker like fulltilt.com and pokerstars.com do NOT provide API for trader's programming and maybe forever not.
 
One interesting thing about poker vs trading related to the recent online poker debacle.Basically Sheldon adelson (the satanic casino mogul who meddles in U.S politics) wanted to shut down online poker.

The debate came down to whether or not poker is a game of skill or a game of chance. The poker guys came up with a pretty cool way to prove that poker is a game of skill.

They asked the question : Can you lose on purpose?

The answer is clearly yes. You can make strategic decisions in poker that will cause you to lose on purpose. If it was a game of chance, you couldnt lose on purpose. The purely random nature of it would cause you to win whether you wanted to or not.

So bringing it to trading, the question becomes: Can you lose on purpose?

I dont know of any strategy that can consistently lose on purpose using a 1:1 risk:reward (otherwise you could just take the opposite signal and it would be a winning system).

One strategy to lose money on purpose is to hold positions UNTIL they are negative, and then sell them.

So perhaps the secret to trading is some system that is based on holding on regardless of drawdown and then taking profits (Regardless how small the profits).

Dont think it will work, but just some food for thought lol.
 
Losing in trading on purpose might be possible. Let your ratio be cash:loan=10:90 or more.
If you repeat many times, you soon will be broke, even if you win some times.

Best way to lose fast is such as 1:99. Most likely less than ten bets shall make you empty pocket.

If you bet is 100:0 (purely cash), then losing on purpose is as much as difficult as winning, if there is no commission and tax.

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Furthermore, one significant difference is that someone give you loan with collateral in equity, while no one give you loan in poker chip.
 
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