Ever since I saw the poker tournaments on TV few months ago, I decided to learn the game. It turns out I really enjoy it. Poker is so much like trading and I think it's the best training for trading.
This is what I have learned so far in poker (this is coming from a guy who didn't know what a full house was)
Most winnings will come from playing very few select starting hands. When I first started out, I found myself playing every hand, thinking that the blinds won't hurt much. But as I play, I realize that playing tight means you will fold more often but more importantly not lose money by playing every bet. I didn't realize how much money i lost just getting into small bets. THese add up, so it's best to jsut play premium hands (for now).
Poker is about probabilities and skill. Luck is a small influence. A strong starting hand can lose its edge as you see the flop. This is why you keep seeing the same faces at final tables, even though everybody knows the rules and what the good starting hands are. It's skill even though you're dealt with random hands!
I'm still learning the psychology aspect of poker, such as knowing when to bluff and how to read other people's cards.
So how does this translates to my trading?
After looking at charts the last 3.5 years, I know that good trades work out quickly. These trades are like my good hands that I should be aggressive with. But you never know how the hand will unfold after you enter (flop). So you have to play the trade right but willing to close out-even if the trade is a pocket A's quality. I see people go all in with good startig hands but you know they're beat when looking at the community cards.
I also have VERY tight risk management. I get stopped out a lot; Similar to the many hands that I fold while playing poker. But when my trades go my way my winners are 5x the losers. But i guess people want to be right more often rather than win in the end. It's the same thing in both worlds.
It's frustrating in the beginning to let go of these trades so quickly especially when those trades work out in the end. It's kind of like folding a hand but after the river card, you found that you would have had a full house. Poker taught me to keep playing my strategy because if i hold on to those bad hands, i will lose in the long run even though I may win with them from time to time.
I'm not sure how psychology plays in trading like it does in poker since it's a lot harder to gauge other trader's positions especially for forex market. But so far just trading the way I play poker is paying off.
This is what I have learned so far in poker (this is coming from a guy who didn't know what a full house was)
Most winnings will come from playing very few select starting hands. When I first started out, I found myself playing every hand, thinking that the blinds won't hurt much. But as I play, I realize that playing tight means you will fold more often but more importantly not lose money by playing every bet. I didn't realize how much money i lost just getting into small bets. THese add up, so it's best to jsut play premium hands (for now).
Poker is about probabilities and skill. Luck is a small influence. A strong starting hand can lose its edge as you see the flop. This is why you keep seeing the same faces at final tables, even though everybody knows the rules and what the good starting hands are. It's skill even though you're dealt with random hands!
I'm still learning the psychology aspect of poker, such as knowing when to bluff and how to read other people's cards.
So how does this translates to my trading?
After looking at charts the last 3.5 years, I know that good trades work out quickly. These trades are like my good hands that I should be aggressive with. But you never know how the hand will unfold after you enter (flop). So you have to play the trade right but willing to close out-even if the trade is a pocket A's quality. I see people go all in with good startig hands but you know they're beat when looking at the community cards.
I also have VERY tight risk management. I get stopped out a lot; Similar to the many hands that I fold while playing poker. But when my trades go my way my winners are 5x the losers. But i guess people want to be right more often rather than win in the end. It's the same thing in both worlds.
It's frustrating in the beginning to let go of these trades so quickly especially when those trades work out in the end. It's kind of like folding a hand but after the river card, you found that you would have had a full house. Poker taught me to keep playing my strategy because if i hold on to those bad hands, i will lose in the long run even though I may win with them from time to time.
I'm not sure how psychology plays in trading like it does in poker since it's a lot harder to gauge other trader's positions especially for forex market. But so far just trading the way I play poker is paying off.
, folding isn't usually about knowing we're beaten, but estimating that our probability of improving or winning is not high enough to justify the end cost.
