Article Keyword Videos to Watch
Click on the image to start the video.
Images - Links - Articles
How would great poker players do as traders?...Great
Professional traders of stocks or commodities bear striking resemblances to poker players. Now I know that some of you are already getting angry with this comparison, but please hear me out. As many people today, I have recently found myself quite interested in the WPC (World Poker Championship). I hear people talking about it all the time it seems that we can't get enough of it. This interest caused me to do some reading on poker strategies. I was struck by the similarities to the many books I have read about trading strategies. If you boil both games down to their essence, both rely on money management, and controlling emotion. After years of trading I can tell you that money management can be taught to anyone with simple mathematics. Controlling emotion on the other hand cannot. In trading as well as poker a person can calculate the odds of the next move to decide whether it makes sense. This is exactly what good players and traders do. Then you have to be able to control your emotions to follow through with your play. Ahh... this is where the good and the great players and traders part company.
In trading I hear the same excuse alot. If I had 0,000 account I would be able to trade
better. Believe me, nothing could be further from the truth. The difficulty of controlling your emotions grows right along with the size of your account. When I was new to trading I thought this same way. I had to change this type of thinking myself to grow as a trader. I think that poker provides an excellent opportunity to explain why this logic is not correct. I made a list of the names of the 15 best players on the WPC tour. I watched the tour on T.V. for several weeks. I noticed that the same 15 people always seem to rotate at the final table of 8 players. Sure there would be the occasional lucky unknown player that would be there at the last table, but names from my list always popped up. In these tournaments you don't bring your own money, everyone just pays an entry fee. All of the players have an equal stake in the game.
With the popularity of this game today many tournaments start out with several hundred if not thousands of players With all things being equal how do we explain the same handful of players consistently ending up on top. Emotions. Mainly fear and greed. The fear of being knocked out of the game drive them to bad decisions. Later for all those who are still in the game, greed takes over and the thought of winning a bunch of money causes bad decisions. Poker is a game based on mathematical odds of the various hands dealt. Based on that the player with the best math skills would win, but that is often not the case. I'm sure that all the top players are good at math, but there are probably many new players at every tournament that have better math skills. Especially now that poker is the new hot thing to do for a living. No, you can plan things out with perfect math skills but without the emotional control to follow through with your plan it will not succeed.
This is equally true in trading.
About the Author: Shadow Trader
Be a power trader
New blog for inside info.