Is there a strange connection between trading and poker? Can playing poker make you a smarter, more consistent trader?
SteadyTrade co-host Stephen Johnson came to trading following a stint as a professional poker player.
Regular listeners may also remember that in Episode 158, we profiled Ray D. of Confessions of a Market Maker — another pro poker player turned trader.
On today’s episode of SteadyTrade Podcast, Stephen and Kim Ann Curtin go on a fact-finding mission to figure out if there’s really a correlation between finding consistency in poker and trading.
Trading and Poker: Playing To Win…
Kim just devoured a book called “The Biggest Bluff: How I Learned to Pay Attention, Master Myself, and Win” by Maria Konnikova.
In the book, Konnikova chronicles a unique experience in the world of professional poker. A total newbie, she’s fascinated by the culture and convinces a legendary player to be her mentor.
While she thinks she’s going to be learning a card game, it turns out to be a voyage of self-discovery. The book got Kim thinking about the connection between poker and trading.
As Kim observes, in many places in the book, it’s as if you could remove the word ‘poker’ and simply put ‘trading’ in its place.
She started to wonder … could past poker experience inform one’s trading?
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What’s the Connection Between Trading and Poker?
As Stephen notes, this topic couldn’t be more timely. He recently started a poker group with several fellow traders.
So … are traders any good at poker? Who won the game? Stephen’s not gonna tell (but yeah, he totally won.)
As he observes, there are two key reasons why people exit the world of poker:
- It’s too difficult.
- They were being thrown out of casinos.
Could it be that day trading is a natural progression because it speaks to the same adrenaline-pumping risk-and-reward cycle?
How Is Trading Like Poker?
According to Stephen, “Trading and poker are pretty much identical … but with one big side path.”
The two endeavors have an awful lot in common.
For instance, in your first year at either, you’re being swung in all directions. You don’t necessarily know if what you’re doing is working or if you’re just lucky.
But after a year or two, you start to see patterns emerge and figure out what actually works.
One big difference? With poker, you don’t necessarily see the final hand. With trading, you get to see the aftermath.
Is it All Just Gambling?
Ideally, neither trading nor poker should be mere gambling.
With both, you want a calculated edge that you can use to play the system.
It’s a combination of experience and skill … but even so, there is the element of luck.
It’s a maddening truth with both trading and poker: even if you do everything right like tracking data and having a plan, things can still go wrong.
And even if you do everything wrong, you can still win big sometimes.
How can traders deal with this truth? Tune in as Kim and Stephen discuss…
What Did Poker Teach Stephen About Trading?
As Stephen shares, his history in poker has helped him a lot as a trader.
For instance, it helped him keep his wits about him after a big loss. Another benefit? Honing the ability to gather information from other people and use it to your advantage when it’s your turn to play.
He’s also willing to let things go if the odds aren’t in his favor. If he misses a stock, he doesn’t feel much FOMO: “You don’t lose by missing it.”
So … should people study poker to become traders? Not necessarily. Stephen says it’s like speaking Spanish vs. Portuguese. They’re both hard enough to learn in the first place and not instantly interchangeable. Why work harder than you have to?
Ego and Mindfulness
Segueing from the poker conversation, Kim and Stephen close out the episode with a conversation about ego, mindfulness, and emotional self-care.
Learn about their personal mental health routines, Stephen’s epiphanies during fasting, and how they avoid the ‘dopamine fix’ culture we’re living in right now.
What Do You Think?
Do you see a connection between trading and poker? Or, do you want to comment on the mysticism of dolphins discussed in the episode?
Remember: if we select your question or comment as an on-air topic, you could win a SteadyTrade mystery gift box. Leave a comment below or on YouTube!
Thanks for tuning in to the SteadyTrade podcast. Stay tuned for weekly episodes featuring the hottest topics for aspiring traders.
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Meet Our Hosts
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Kim Ann Curtin
*Trading results are not typical. Always remember that most traders lose and that individual results will vary. Before trading, do your due diligence and never risk more than you can afford to lose.