Trading Is Not A Fashion Contest - Great Articl

[Laughcrime]

Hello Laughcrime,

Yes, its a big thing new/beginning traders seem to get caught up in. And how ironic you are a poker player - I seem to be getting a lot lately and have two former pros studying with me.

We were just talking about it, whereby the beginning trader/player is only looking for AA or AK suited, and muck all the other hands, while a good player will get JJ and make a ton of money from it, or AQ and still play it well. We don’t muck those hands just because they are not AA.

Sure, we all want pocket rockets, but a skillful player knows how to play those hands and make money over time.

It is exactly the same in forex, and am glad you came to this recognition as well.

Kind Regards,
Chris Capre

Chris, I’m not at all surprised you’re getting a lot of poker players, since, like me, many of them lost careers playing poker after “Black Friday” (April 15, 2011, when the U.S. Dept. of “Justice” made it “illegal” for
U.S. players to play online at the biggest and best site in the world, Pokerstars (and some others)).

And that’s a good analogy (even if in poker, a strong player can get away with playing a lot more hands than even those…but in poker, with the exponential dynamic of real-time person to person adjustment and reflexive strategy etc, it’s different than forex in a way)…

I think one huge weakness that applies to many in both is that a lot of players/investors/speculators, in some way or to some degree allow their negative experience combined with their conception of the pragmatic virtue in these markets of carefulness/conscientiousness, to devolve into fearfulness/timidity…or somehow to have the distinction blurred. …Part of that I think in the beginning especially is due to inexperience…i.e., they are erring on the side of caution. I really think that the cure for that can be largely simply more knowledge/ a reminder, as you put forth in your article.

The other people affected by that I think have to work on the side of their “game” that involves risk/money/trade management. In poker, we would get almost made fun of in public forums if we didn’t get our money management in order…I think since online poker was big with a lot of young people, who wanted to just get the show on the road and win, and had no patience for wallowing around in indecision, and it was painfully obvious that anyone who didn’t get that side in order quickly, was doomed from the start. But the foundation of actually being able to cut through the emotions that some seem to have so insidiously attached to that (and same yet again in horse racing), we knew was based in laying out the specifics of basic stakes-to-bankroll/risk of ruin, and bankroll-to-expendable income dynamics in a way that simply respected the fundamental realities there…I mean I remember the day in horse racing (which I got into before poker) when the simple reality of expected, normal run-outs (consecutive losing races/bets (i.e., same as losing trades in forex), given any specific winning percentage, dawned on me. THAT was the day I became a winner. And I think that would help a lot of other people too.

Well I could go on and on, lolz…big subject, and I love to share my side of the pretty parallel insights these fields share in common…but for now, thanks again for the great article, and I look forward to learning more from you!

All the best,
Mike

[2ndSkiesForex]

Chris, I’m not at all surprised you’re getting a lot of poker players, since, like me, many of them lost careers playing poker after “Black Friday” (April 15, 2011, when the U.S. Dept. of “Justice” made it “illegal” for
U.S. players to play online at the biggest and best site in the world, Pokerstars (and some others)).

And that’s a good analogy (even if in poker, a strong player can get away with playing a lot more hands than even those…but in poker, with the exponential dynamic of real-time person to person adjustment and reflexive strategy etc, it’s different than forex in a way)…

I think one huge weakness that applies to many in both is that a lot of players/investors/speculators, in some way or to some degree allow their negative experience combined with their conception of the pragmatic virtue in these markets of carefulness/conscientiousness, to devolve into fearfulness/timidity…or somehow to have the distinction blurred. …Part of that I think in the beginning especially is due to inexperience…i.e., they are erring on the side of caution. I really think that the cure for that can be largely simply more knowledge/ a reminder, as you put forth in your article.

The other people affected by that I think have to work on the side of their “game” that involves risk/money/trade management. In poker, we would get almost made fun of in public forums if we didn’t get our money management in order…I think since online poker was big with a lot of young people, who wanted to just get the show on the road and win, and had no patience for wallowing around in indecision, and it was painfully obvious that anyone who didn’t get that side in order quickly, was doomed from the start. But the foundation of actually being able to cut through the emotions that some seem to have so insidiously attached to that (and same yet again in horse racing), we knew was based in laying out the specifics of basic stakes-to-bankroll/risk of ruin, and bankroll-to-expendable income dynamics in a way that simply respected the fundamental realities there…I mean I remember the day in horse racing (which I got into before poker) when the simple reality of expected, normal run-outs (consecutive losing races/bets (i.e., same as losing trades in forex), given any specific winning percentage, dawned on me. THAT was the day I became a winner. And I think that would help a lot of other people too.

Well I could go on and on, lolz…big subject, and I love to share my side of the pretty parallel insights these fields share in common…but for now, thanks again for the great article, and I look forward to learning more from you!

All the best,
Mike

Hello Mike,

Ha, yes I lost some money in my poker account as well, although supposedly the DOJ has a case running to get it back.

Anyways, in regards to trading & poker, yes when one gets the risk management aspect of trading down, particularly the risk of ruin formula, then one trade never becomes a disaster like I hear newer traders often saying. No one trade should ever be a disaster, or really hurt them. Its just one free throw missed, and there will be plenty more opportunities to make it up.

Its amazing, but even some of my newer traders, who may not have a lot of experience yet, when using proper money management - do pretty darn well, and are more often profitable, because they never put themselves in bad spots risk wise.

There are so many parallels like you mention, but very much like you, when I spent as much time (if not more) using proper money management, along with managing my mental state (in contrast to how I was going to trade), was when my trading really took off. Luckily, I focused more on this in the beginning, which laid a good foundation for me.

I will say most of my poker player/students are definitely picking this up fast, and their experience is definitely translating over to trading. But at this rate, I might have to create a poker trading team, because every week another pro poker player-turned trader comes in :-o.

I’m just worried about playing a live cash game with them

Kind Regards,
Chris Capre