Any opinions on the correlation b/t Poker and Trading??

[Fletch08]

Hi all,

I am a noob to trading, but have studied the markets for many years. I am taking my time to construct/test systems and understand how indicators/pricing/market behavior/patterns correlate and respond in order to devise a simple yet high probability trading system. I have been a long time, successful, online and live poker player, mainly to help me understand variance, money management, control of emotions and probabilities so that I can apply it to trading in a practical manner(as trading has been my passion for many years now). I know that poker players starting out have about the same odds of succeeding in the long-run as does a successful (profitable) trader.

My question is this: In poker, understanding that nothing is guaranteed and that over the long-term I will have positive results based on +EV plays, coupled with strict bankroll management during downturns to minimize losses, will this knowledge be transferable to trading? (Plz do not interpret my use of bankroll mngt only during downturns. I use it religiously but when the downturns happen I drop limits to make it through the period with smaller losses).

I look forward to any feedback. Great site btw.

Thanks.

 

[GammaJammer]

imho blackjack is a slightly better analogy.

Just my $0.02

GJ

 

[mrsoul]

Hi all,

I am a noob to trading, but have studied the markets for many years. I am taking my time to construct/test systems and understand how indicators/pricing/market behavior/patterns correlate and respond in order to devise a simple yet high probability trading system. I have been a long time, successful, online and live poker player, mainly to help me understand variance, money management, control of emotions and probabilities so that I can apply it to trading in a practical manner(as trading has been my passion for many years now). I know that poker players starting out have about the same odds of succeeding in the long-run as does a successful (profitable) trader.

My question is this: In poker, understanding that nothing is guaranteed and that over the long-term I will have positive results based on +EV plays, coupled with strict bankroll management during downturns to minimize losses, will this knowledge be transferable to trading? (Plz do not interpret my use of bankroll mngt only during downturns. I use it religiously but when the downturns happen I drop limits to make it through the period with smaller losses).

I look forward to any feedback. Great site btw.

Thanks.

Trading is a million times more complicated than poker.
Poker really is a simple game- unfortunately the markets can
turn your mind and your account into chop suey.

It is also a million times easier to go on tilt trading than playing poker.
Tilt destroys more in trading than poker.

 

[GammaJammer]

Reasons I said blackjack rather than poker are as follows;

1) There's a basic house edge
2) Statistical anlysis can reduce that house edge
3) Money management, combined with 2 will still further reduce that house edge, to the point that if you take 2 to its ultimate conclusion (i.e., in Vegas, this means multpile deck card counting), and manage your money according to when the odds are more and / or less favourable you can actually generate a small positive edge
4) Emotions don't really play a part. A 'poker face' has little relevance as an analogy in the modern financial markets.
5) Just turning up, sitting down and playing at random pretty much guarantees you'll lose your stake. Turning up and learning a few basic rules (analogous to Basic Strategy in blackjack) will mean you lose your stake slower, and basically the house will win in the long long term.

Make sense? If I had two interviewees in front of me, and one was a top ranked poker player, and one was a consistently profitable blackjack player, and I had to hire one, I would strongly favour the blackjack player. Poker's for people with an ego to satisfy, for people who love the thrill of combat. Blackjack doesn't offer anything like the entertainment. It's just a mechanical process at the top level, albeit a complex one demanding extraordinary abilities. I would bet that it correlates far more consistently with trading ability than poker does.
Just my $0.02. Fwiw I'm the house dream when I go to a casino. I am totally resigned to losing my stake, and being entertained at the same time. I know how to play BS, and I know basic card counting, but I just want to get lashed up and have a laugh. If I'm not on work time then f**k it. So do as I say, not as I do!!!!!

GJ

 

[Fletch08]

Hi GJ,

Thanks for chatting. Im not sure BJ is a good analogy imo to the markets bc then you would have a losing edge, as the house has a slight edge .005% based on basic strategy (if you are not proficient at counting cards, which if you are and I know how to, they will kick you out). The reason why I believe poker and the markets are similar are for the following reasons:

First, both are a zero-sum game. (minus spreads/commissions/rake/etc) BJ is not. Secondly, poker is NOT a mechanical game but a game that requires you to make multiple decisions off of imperfect information, and you always use math and +EV lines to make the best decision along with other information, ie: patterns, which is much like trading.

Now, some might play poker in the manner that you described. I know they do. I personally do not play poker for fun or entertainment. I play to make money, not to be right or wrong or crush someone, just make correct decisions and increase my bankroll. I am there to make money. Yes, I have gone on tilt and it has cost me some, who hasnt. But, I am disciplined enough to stop, reevaluate, and adjust. Now as far as relating poker to combat.. thats completely wrong for the professional player, as far as I am concerned and in relation to how I and other good poker players play. YES, there are ppl that do that for those reasons, and I love playing them, because I will make the most money off them bc they are playing with emotions, which in poker and trading will kill you. I can assure you profecient or professional poker players do not play bc they love combat or have an ego to serve. I am a combat veteran of the US Marine Corps, and I assure you that even though others might play that way, I do not. And, combat is a strategic as well as tactical game. FYI, combat is not something that is fun or pretty.. I did it to serve the country only.

I use complicated databases with HUD capabilities that supply me with player stats that i use to make the most +EV situations while playing online based on the way a player plays. My system tracks everything a player does, thus I know his tendencies and can then use that info to optimally play him. Now, its not always correct, just as an indicator is not always correct. This info allows me to know all about a player, therefore just like an indicator, allows me to make decisions that provide the most reward relative to risk. BJ has a basic strategy of if-then scenerios... does trading in your opinion have this basic of an approach? Are you stating that trading like BJ can have a robot make all decisions based off of "optimal approach" and profit more in the long run?? Or is it more like poker whereas there are if-then situations but its ALL dependant of the current situation with a lot of other factors, bc poker has no definate play for any scenerio. Unless you can count cards and never get caught, which just wont happen these days, it is mathematically impossible to beat the house in the long run. It is -EV. Whereas, poker has +EV for the skillful player that understands how and when to play and when to get out. After all, getting out when your beat with the least amount of money lost is golden-rule in trading too eh?

I am good at playing BJ too but it is more gambling imo, like craps... I do play them, but I truthfully make more and mainly consistent profits from poker.

Last thing, Just like trading, poker allows you to make decisions to enter or not. BJ you cannot, you just have to keep playing even when the deck is cold... Now you can vary your bets based on a hot or cold deck, but trust me, the pit boss will be your new friend.. so that makes it impossible.

Im trying to understand if trading is a set thing, or if it has various scenerios that must be considered to provide optimal results.. like poker. I do not want to trade for ego purposes nor do I play poker for ego purposes. I do it to make money and bc I am good at it, and I set out to learn it and master it as I do in everything I do... ( A lil OC... Lol)

Great debate. Look forward to feedback.

 

[GammaJammer]

I think the thing I'm trying to get at (albeit not very well) is that the market ultimately is bigger than you are, and is going to go where it's gonna go regardless of what you do. That's the part that I view as being somewhat analogous to the fact that in BJ you can just get dealt a ****ty hand sometimes. But that doesn't mean you're out of the game. It's all about how you deal with that. And I understand that this is kind of the case for poker too, I just don't buy into poker as an analogy as I think the market is more impersonal than that.

Just my $0.02 though. I'm sure you're far more of an accomplished poker AND blackjack player than I will ever be. Like I said, I'm just in it for the lulz when I hit the casino (which, btw, is very very rarely - doesn't really float my boat tbh).

GJ

 

[Fletch08]

Trading is a million times more complicated than poker.
Poker really is a simple game- unfortunately the markets can
turn your mind and your account into chop suey.

It is also a million times easier to go on tilt trading than playing poker.
Tilt destroys more in trading than poker.

Curious as to about how much you win/lose per day trading. Dont want an exact # or anything, but I make and lose 5 figures a day in poker... And i only play part-time...

And how much experience do you have in poker? If it was easy, which I definately do not believe it is, nor would a lot others... There are a lot of hard decisions that you must make on several levels... And to put a player on a hand is a skill that is very hard to learn...

Thanks for your input..

 

[Fletch08]

I think the thing I'm trying to get at (albeit not very well) is that the market ultimately is bigger than you are, and is going to go where it's gonna go regardless of what you do. That's the part that I view as being somewhat analogous to the fact that in BJ you can just get dealt a ****ty hand sometimes. But that doesn't mean you're out of the game. It's all about how you deal with that. And I understand that this is kind of the case for poker too, I just don't buy into poker as an analogy as I think the market is more impersonal than that.

Just my $0.02 though. I'm sure you're far more of an accomplished poker AND blackjack player than I will ever be. Like I said, I'm just in it for the lulz when I hit the casino (which, btw, is very very rarely - doesn't really float my boat tbh).

GJ

Absolutely. The market is going where it wants and I just want to ride it and hopefully get on the right bus thats going to take me to the right place. But in BJ, you can choose which bus you get on and you dont know where its going to go.. In poker, you do have a choice, and those choices will either be + or - EV in the long-run. Just like trading, you cant make the cards fall a certain way. You cant stop from getting rivered to take your whole stack, even though you had the guy.

BUT, you can manage your money so that you are not over-invested into any one game with more than 1% to 2% of your bankroll. Just like trading. All you can do is play the best cards under the best circumstances and know that in the end you will make more than you lose.. Its tough when you go on a downswing, but this is my strength bc I know to drop limits, just like reducing the position sizes...

So, in that light, do you feel that someone who is extremely good with math, very quick to respond to situations, has a good memory for pattern recognition, and can keep from impulsively investing, has a good grasp of the markets and indicators and systems, use this knowledge as leverage to, in the long-run, make money?

Thanks

 

[Fletch08]

I think the thing I'm trying to get at (albeit not very well) is that the market ultimately is bigger than you are, and is going to go where it's gonna go regardless of what you do. That's the part that I view as being somewhat analogous to the fact that in BJ you can just get dealt a ****ty hand sometimes. But that doesn't mean you're out of the game. It's all about how you deal with that. And I understand that this is kind of the case for poker too, I just don't buy into poker as an analogy as I think the market is more impersonal than that.

Just my $0.02 though. I'm sure you're far more of an accomplished poker AND blackjack player than I will ever be. Like I said, I'm just in it for the lulz when I hit the casino (which, btw, is very very rarely - doesn't really float my boat tbh).

GJ

Last thing on that, as far as getting a bad hand, and knowing to get out, is very important. But, in poker, if you get a hand, say K8 in early position and play it, you will get wiped out in the long run bc someone behind you could and sooner or later will have AK or KK.... so that hand is -EV. But, to play AA in early position is +EV, in the long run. You will get hit, but only like 30 times out of 100... when you go all in against another player with pocket pair, pre-flop. And that is something that is my strong suit, I know to get out. I want to apply this to my trading as I believe I am hard wired to think this way, about probabilities, etc..

Thanks for chatting GJ. I appreciate it. Great site too....

 

[jiggly]

My question is this: In poker, understanding that nothing is guaranteed and that over the long-term I will have positive results based on +EV plays, coupled with strict bankroll management during downturns to minimize losses, will this knowledge be transferable to trading? (Plz do not interpret my use of bankroll mngt only during downturns. I use it religiously but when the downturns happen I drop limits to make it through the period with smaller losses).

I look forward to any feedback. Great site btw.

Thanks.

to answer you question, yes it will.

your knowledge and experience with money management in a game revolving around probabilities will help you tremendously and is highly transferable to the financial markets. given you are as successful at poker as you say you are, your knowledge should be very pertinant.

best wish's in your endevour.

 

[disi]

Trading is a million times more complicated than poker.
Poker really is a simple game- unfortunately the markets can
turn your mind and your account into chop suey.

It is also a million times easier to go on tilt trading than playing poker.
Tilt destroys more in trading than poker.

Why do you think so? In trading you have ONLY two conditions - either you WIN or LOSE. Bet if today's candle is up or down. How many results of this one can expect? Only two- either you win or lose.

IMO trading is much simpler than poker. What makes it so "hard" is the fact that people tend to look at it from wrong perspective. We look at indicators and tens of other "noise producers". While basics of trading are as simple as possible! Add to his "mind games" and 90% of traders end up without money. Just think about it for e minute guys:

Only two conditions(either I win or lose)..and still...most people lose 90% of time while it should be 50% in worst case! Do you get what I am trying to say? It's our mind that does it. Game in itself is simple.

To the author of thread - that is great idea! Recently I have been thinking about learning Poker (texas). My imagination tells me that I can learn there a lot of valuable lessons-not only for trading but for life in general.

 

[tomorton]

There is only one difference between gambling and trading - attitude.

But English doesn't have suficent vocabulary. There are traders who gamble on the markets and no doubt there are poker-players who are not gambling at cards, they are trading hands for profit. Its not a function of the name of the game or study effort required or complexity of the rules or anything like that which are external factors. Its all in the mind.

 

[disi]

There is only one difference between gambling and trading - attitude.

But English doesn't have suficent vocabulary. There are traders who gamble on the markets and no doubt there are poker-players who are not gambling at cards, they are trading hands for profit. Its not a function of the name of the game or study effort required or complexity of the rules or anything like that which are external factors. Its all in the mind.

+1 agree