PIPS VS CHIPS
I just recently started to play (should say study) Poker thanks to Dukascopy Poker contest. Sure I new the basics of poker, back from when I was playing with my school friends. But when I noticed how well some of my Dukascopy community friends have done in the Poker tournament it prompted me to look into Poker bit more closely, as monthly price fond of 18`000 USD was just to enticing to miss out on.
The 1st thing I noticed how similar poker is to trading and it requires much of the same skills as trading. I guess this is the reason Dukascopy have created this tournament in the 1st place, as at 1st, I must admit, I was bit sceptical as always though of Poker as a gambling game that belongs in casinos. But just a quick read about Poker online have changed my perspective on Poker and now I believe that Poker is game of strategy, probabilities and psychology very much the same as trading. And I guess another similarity with trading is that to un-educated outsider, trading can resemble gambling too.
Similarities between trading and Poker:
- In both, you try to make optimal decisions on the basis of incomplete information. You can place your trades/bets, but the outcome of your trade/hand will be determined from outside factors (other traders/board)
- In both having strict strategy that fits your personality is critical. Without strategy you are just gambler in Casino.
- Both require to manage risks. Without the right money management/bankroll management even the best strategy can lead to being broke.
- The psychological challenges are very similar. Making correct decisions, often under serious time/money pressures, can be challenging so calmness of mind under pressure and patience is key skills that both trader and Poker player must have.
- Both are deeply competitive and driven by money.
- The only difference between the two is Bluff. Bluff plays big part in Poker, but You can't bluff the market. If you are wrong about the trade you always going to loose. Not so in Poker, you still have one move left - Bluff.
Tight Aggressive Strategy.
It is widely said that Tight Aggressive Strategy works the best in Poker. And I believe it works very well in trading as well.
Tight in Poker- you play only the strongest hands. Playing too many hands pre-flop is one of the main mistakes many novice Poker players do. Only playing the best hands gives you edge over the competition.
Tight in Trading - you trade only the best setups. Taking too many trades is one of the main mistakes many traders do. I personally only take 1-3 trades per week and only the 100% setups I`m happy with. Sometimes I can go 2 weeks without a trade and thats fine with me as I had nothing to trade.
Aggressive in Poker - when you hit a hand be aggressive. Raise and Re-raise as opposite of calling or checking. This allows you to get the most money when you hit your hand.
Aggressive in Trading - this might not be very popular with many traders, but I believe you must be aggressive with your trades as well. Since I only take 1-3 trades per week I risk 5-10% of my account on each trade. This is more than industry standard 2% per trade, but it works for me. Another example of been aggressive in trading is to add to your potion when your trade is in profit, so increasing your return on winning trades.
So as you can see Trading and Poker is very similar so I invite you all who haven't tried the Dukascopy Poker tournament to join me, and you might discover that your trading skills are good at Poker table too.
DUKASCOPY POKER CONTEST