Poker and Trading
I am still amazed at how much I have learned about trading from playing poker. Poker is a game of money management and odds, just like trading. But one difference is that with Texas Hold’em there are only 169 starting hands, with all the different things you can trade there is an unlimited number and types of trades you can do.
Having a finite number of plays makes it easier to see what is going on and learn the things you need to know to be successful.
When I first started trading I met a guy who opened an account and ran $5,000 up to about $15,000 in a month. But he didn’t have any money to trade with and offered to split the profits he made with me, I was so gullible I didn’t know anything about trading or money management. I only knew that with my 50% tripling every month I was going to be rich very fast.
I gave him $20,000 and he lost it all in a couple weeks, I didn’t get to triple up even once. Oh well, that’s the way it goes. The thing is, he may have been a very successful trader with a winning system, I don’t know. What I do know is that he was not very good with money management, and when he started losing his solution was to bet bigger.
This is not a winning strategy in the long run, you need to have an advantage over the other players and you need to know how to manage your money so your advantage kicks in before you run out of money.
I learned that from playing poker.
Having a finite number of plays makes it easier to see what is going on and learn the things you need to know to be successful.
When I first started trading I met a guy who opened an account and ran $5,000 up to about $15,000 in a month. But he didn’t have any money to trade with and offered to split the profits he made with me, I was so gullible I didn’t know anything about trading or money management. I only knew that with my 50% tripling every month I was going to be rich very fast.
I gave him $20,000 and he lost it all in a couple weeks, I didn’t get to triple up even once. Oh well, that’s the way it goes. The thing is, he may have been a very successful trader with a winning system, I don’t know. What I do know is that he was not very good with money management, and when he started losing his solution was to bet bigger.
This is not a winning strategy in the long run, you need to have an advantage over the other players and you need to know how to manage your money so your advantage kicks in before you run out of money.
I learned that from playing poker.
