ok today i was playing online poker
i just realized there was correlation between poker and trading
i used to hear about it back then, but i thought to myself, hell no, there’s no correlation
i used to think poker is a total different instrument
as i start to trade more and more…i finally gained some light
both require a decent bankroll and risk management
in NL poker for an aggressive risk management the minimum bankroll is 20 times your buy in
which equates to risking 5% max each trade
of course 5% is too much in trading, you risk blowing up your account
in poker, it’s true as well but with proper poker skills and management(moving down stakes when you lose a couple buy-ins) your more likely to do fine
this is similar to trading less amount once you start losing a good amount of your account
then also each bet/fold/call/raise situation is all about risk:reward ratio
if you cbet 60% of time 2/3 pot and win 50% of the times, this is very profitable
if you fold, you lose nothing, you gain nothing
if you call a pot size bet you have to be right 1/3 or more of the times to be profitable (+ev)
do you feel where im getting at?
it’s correlated in terms of risk management and risk:reward situations
the only thing is very different about the structure is that the player pool is limited in poker
when you sit down at a table, there will be a limit of players, it’s you vs the players at the table
unlike the market, the market has no cap on the traders involved, it’s you vs the whole market
also, once you gain a sizable bankroll in poker, you move up and move up to the point of diminishing return even with godlike skills
in trading, you move up and up and up, the sky will be your limit
with poker, how much you make is very dependent on your skills, luck is only a short term factor
also they charge 5% rake, just like how brokers charge 1-3 pips for a pair
some can say poker is gambling, sure…but can’t you also say trading is gambling if that’s the case
because there’s always luck involved, short term wise
poker players each have 2 cards facing down(the unknown factor), when they bet/call/raise/fold they give you information about their hands, also the players tendencies give you an idea what he/she is likely to be holding atm…
also there are 5 community cards(anything can happen factor)
traders doesn’t know the future, but the past history gives you an idea of what the prices might do…
it might not be exact, you could be wrong sometimes too, but it gives you an edge
do you see the correlation???
or am i the only one going nuts?