Poker and Trading, Part I: play poorly on the way to win?

Poker and Trading, Part I: play poorly on the way to win?

Both poker and trading could be considered financial 'games'. Games where insight into human nature are essential, especially insights into our own emotions. Good trader / player knows when to push hard, and when it is time to retreat. Alertness, relaxation, detachment and other complex mental properties to be developed if one is to succeed in the long run.

This article considers a strategy - called "tight" in poker and compares it with trading. In poker almost every table has a very tight player. They just opened the match with Aces or higher pair. This is a reasonable strategy, and often these players make a small profit or break even. They rarely make big gains though because other players know that once this tight player raises he has a good arm and fences so that everyone around them.

Trading has a similar type of player. Many traders wait for all indicators (fundamental and technical) to line up and confirm that the trade will go in the direction expected. And usually it does. However, this may soon change direction. That's because anyone who had to go a long time already gotten on board. This is not to say that waiting is a bad strategy - it's certainly one that requires patience. Most of the time it is the best strategy. But sometimes, as at the poker table, we should not mix ..

In our tight poker player gets dealt a pair of aces. That is what he waits and he comes out guns blazing. The failure may have some dangerous cards - such as 2 of the same suit - indicating that another player may have a flush draw .... Another card with the same color comes on line. But he ignores it and continues to place bets. The river turns the opponent about 2.3 to 3 weight suit cards and beat with a low flush. Our Aces of man is devasted. He had a lot more hands pre-flop-it does not seem fair! But poker is the card now and in the future ..

Also, very often the patient trader finds it difficult to get out of the trade once it goes bad. He spent much effort identifying the right trade and is so patient waiting for it to establish that almost feels cheated if the trade turns in a row. He ignores what is happening now because he is fixated on the past inputs. A bad result can be even more devastating to trader: At least poker player can know the odds, and to understand that he can have a 70% probability of winning, but that he was unhappy. But such calculations the odds are not available for the trader-he can be truly mystified. And more money and emotion invested in more trade effects are multiplied.

Part II (to be published soon) looks at the asset acquisition .. Trading is not that different from the way it works in a casino. There are hundreds of casinos and tens of thousands of players. Often players get lucky, but over the long term it is the casino that continually adds to its bank account.When first started trading I made some good bets and took a quick and large profits. He seemed very easy. It was only a month before those profits went to the first and three months before the end of the day has disappeared also. I was playing as a typical gambler. What I learned gradually, the hard way that it was a successful merchant in the casino and not one of the players. It is situated on the edge and run it, looking for consistent small increases in capital. Do you have an advantage? If you are unsure what is your spirit, then it is likely you do not. As they say in poker, "If you can not spot the sucker at the table, then you are the sucker. And remember, even gamblers have slotmachine win streaks. If you were winning you have a real advantage or you're just getting good luck .. ( continued).



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