What’s the No. 1 Takeaway from Professional Poker to Improve Your Trading?
After winning $11.9 million in her 12-year poker career:
Vanessa Selbst joined the world's largest hedge fund Bridgewater Associates.
But Vanessa's story is not unique. Several high-profile poker players have been recruited by established hedge funds.
Why is that?
Consider this: A 'good hand' in poker isn't equivalent to your A+ trade setup. Is there something more critical than just your setup or hand? You'll see in a minute. First?
Imagine this:
Seven poker players of equal experience and skills sit down to compete. Who's going to win?
If we're discussing just one hand, luck plays a significant role. But delve into multiple rounds particularly during extended sessions - a clear pattern emerges. The victor is the one who waited for others to:
lose patience
deviate from process
let ego play a role ('x' will happen)
doubt themselves and make poor decisions
Leading to bad bets. Consequently these poor bets become opportunities for the ultimate victor. After all succeeding in poker involves claiming winnings from fellow players. Right?
What will every seasoned pro poker player tell you?
• It's not about your hand
• It's about other people at the table
But what about trading?
While massive differences in skill and experience compete against each other in the market, it ultimately comes down to other people's bad bets paying you. Bad bets due to:
poor skill
ego
no edge
not understanding the game
going on tilt - even soft tilt
etc
So:
If profiting from others' bad bets is your gain then understanding fellow traders and their 'tells' becomes paramount. Make sense?
For an example of profiting from other people's bad bets watch the 4-minute live trading illustration below.