Becoming an insightful trader is not easy, which is why good traders learn how to take tips from pretty much anywhere. Whether it’s forex trading, position trading, or even games like poker, a well-developed strategy can always provide some useful tips that can be applied in other sectors.
For example, the famous poker player Vanessa Selbst turned from being a poker player to a trader. Business Insider reports that Selbst acquired a job at the largest hedge fund management company in the world, Bridgewater Associates. Selbst found she could apply her skills, like analysing information and strategies, from poker to trading, and be successful in both.
You are probably wondering: Can you really turn playing poker into a good basis for an investment career? The answer is yes! There are many skills that are transferable, and we’ll prove it to you!
1. Stick To Your Strategy
Seasoned poker players develop their own personal strategy from years of experience. Whether it’s playing it safe on any two cards, folding on certain low hands, or going all in on premium hands, the important thing is to have a strategy and stick to it throughout each game.
The concept of having a strategy and sticking to it is the same in trading. It may sound like a difficult thing to do, especially if one day it’s a bear market and stocks are crashing, and the thought creeps in to sell everything. A personal strategy is a guidance system that leads you through tough situations and is there to help you avoid making costly mistakes in both trading and poker.
2. Never Too High, Never Too Low
It’s easy to get excited if the stakes are big, but it’s also easy to get frustrated if the loss is huge. The important thing is to never get carried away with a big win, or a big loss. Understandably, suffering a bad beat in poker is tough to take, but also something you have to shrug off. With trading, it’s important to not get downhearted after losses. Bad beats, in poker or the real world, are learning opportunities so that you don’t repeat your mistakes. When bad beats occur, try to keep calm and don’t overreact, as it may destroy the ability to focus.
3. Calculate Probabilities
Novice poker players play hands with what feels right in the moment. Skilled professional poker players use a mathematical approach to base their decisions on. They calculate the probabilities of winning hands, as well as the level of risks, which gives them an upper hand in their strategy. This is important for both poker and trading because by using the information that is laid out in front of you, you can calculate the probability and use relevant statistics to assess risks as well as predict the chances of winning or getting a good trade.
4. Practice Humility
It may not seem obvious, but humility is a strong poker strategy. During an interview, poker legend Daniel Negreanu was asked what it takes to stay a success. Negreanu replied, “It requires some self-awareness and some humility.”
Humility requires a person to be honest with oneself and admit when they’ve made mistakes, so they can begin working on becoming better versions of themselves. The best poker players and investors assess themselves and identify where they are strong and weak, thus allowing for self-improvement.
Poker skills are truly applicable in trading as seen in this list. Practice these skills before going all in on your next trade!