Day Trading & Poker Players
A New era has begun, when it comes to day trading and talented poker players. Giving up the old conventional ways of looking for new Wall Street recruits, firms are now switching the focus on poker skills rather than business experience or connections. This new phenomenon of trade companies hunting down poker pros does not come as a surprise to many. With most firms now acknowledging that a poker player lacks in-the-field experiences, they easily make up for it in their quick decision-making and their number-crunching abilities.
So does a poker player really make a good Wall Street trader?
To answer this question, we must first look at what a trader is required to do when trading at Wall Street. A person, who is classified as a good trader is someone who has the ability to be profitable out of buying and selling stocks at the right time. Although this might sound easy, in actual fact it is not. Many traders take years to perfect their skills in selling and buying and no amount of knowledge will ever truly tell you what tomorrow will bring. They spend hours at end, watching the computer screen all day long, always ready to place an order when an opportunity comes. It is a fast-paced environment, where quick decision-making is a must and the difference between a profit or a loss could sometimes just be a couple of seconds. They have a hunger to increase their profits and are not scared to take a punt and most of all, they can always pick themselves up quickly after a bad day.
They have the ability to constantly work through probabilities in order to determine when another player is betting more or less than makes sense, given the cards on the table.
Considering we now have an overall view of what a stock trader is required to do and what kind of environment they are working in, we must now look at a good poker player, to understand why there is so much interest in them at Wall Street. Any good or professional poker player that is able to make a career or living out of poker possesses the following attributes and skills: They are able to have a successful bankroll management plan and have the focus and drive to improve it. They are able to make good judgments on the amount of money they are willing to risk for the return it will bring. The environment they are in is usually multiple screens and multiple poker tables, just like the traders on Wall Street.The image above shows you how Pro's use selective attention and have a system based on positive expectancy.
Poker players can focus on what they’re holding not only at one table but sometimes even exceeding 10-20 tables at a time with slip-second decisions. It is also important that most of the pro poker players have the ability to bounce back after big losses.
After looking at both a good Wall Street trader and good poker player we can see why so many companies are now considering poker players as their best bet. The crossover skills of being able to have good understanding of probability and algorithms, combined with great judgments, concentration skills, quick decision-making and the ability to come back after big losses would make them a valued team member to any trading company.
"In my opinion, a good poker player could easily make a good stock trader, but I would also believe that a poker player will still need to acquire a deep couple of months or even years of experience on the markets before he can become a real professional trader. It is not a matter of whether a good poker player could make a good trader, I think it is rather whether they want to do it. Considering that a talented poker player is able to pull around a 6-figure wage per year, works his own hours, doesn’t have a boss that puts the pressure on him to hit his targets, doesn’t have to battle traffic each day to get to work.
This makes you ask the question: Why would they make the change? Poker and day trading have a lot in common. They both are games that essentially focus on taking strategic and calculated risks in an attempt to earn the most profit. They are also both zero sum, so when you are winning money/chips, somebody else is, in turn, losing money/chips. Both games also require masterful emotional and tilt control, as well as a well-developed sense of selective attention and a system based on positive expectancy, which will allow you to pick up on the habits and tendencies of your opponents and make highly probable results.
Oftentimes, profitable day traders are also talented poker players, and vice versa. In the case of MOJO Day Trading, this is especially true, as I used to be a professional poker player. Emphasis on used to. So, why did I changed from a professional poker player to Day Trading?
While poker and day trading are very similar games that draw from the same intellectual and emotional skill sets, there are many differences that make poker a much bigger, luck based gamble.
You see, in poker you are frequently forced to gamble because of limiting factors, such as a low chip stack and high blinds. If you only have small amount chips left and your looking at semi strong hand, you have to move all in, you are essentially forced by game theory. The biggest FACTOR is the RIVER card. See I could go in with AA and play it great sucking in the "FISH" and all his chips to the very last card as he desperately is pulling for that hand he has only a 3% chance of winning. What happens in poker is they pull that 3% more often than desired. In trading there is NO RIVER CARD!! Once your profitable there is NO FOOL going to take your profit away. Simple see!!
In day trading, you are never forced to make a trade. There are no raising blinds or tournament clocks to worry about. THERE ARE NO RIVER CARDS!! Your battle is with yourself in forcing yourself to stay on the reservation, not force trades and remain patient.
The MOJO Poker Club is playing tonight at 9:30pm for the Spring Smash Tournament - held Saturday Night online @ Pokerstars Homegames.