Let it Go...

Some behind the scenes psychology of trading and poker:
A healthy ego is needed for both stock trading and poker playing.  It's when it blinds you from doing the right thing that it becomes a problem.  Certainly an obstacle to overcome if you choose to persist in either game.  My ego introduces stubbornness into my play.  It is good stubbornness that keeps me involved to learn and improve, but it is also stubbornness that made me hold on to trades too long when I first started, and now making me hold on to a losing hand too long in poker!  This is not to be mistaken with arrogance or any other unhealthy ego characteristics, it is simply human nature to not want to take a loss.

When I started trading after reading many books on technical analysis I was ready to conquer the stock market as I knew all about setups, chart patterns, and technical indicators.  I would get into a trade and all of a sudden the pattern would break down.  "No, this pattern should hold here and the stock will come back."  Yeah.  Apparently the stock didn't read the same books as it plummets further and further due to some fundamental change in the company.  Now I'm facing a much bigger loss than the small one I had after the breakdown.    One of many lessons learned the hard way in trading, don't be stubborn, let it go.  After experience and discipline I have rid myself of this "leak" in my trading.

Now this is clearly showing up again in my poker game where I find myself holding a likely losing hand post flop and taking risks betting when I have some indication that I do not have the upper hand or I don't have good odds to stay in the game.  "But I'm right and he's bluffing", I convince myself, or "I'll hit my Ace on the turn.... the River" when there is a possible flush or straight or even a pair on the table and a player is betting aggressively. (Of course this is simplified as there are many other factors to consider before folding, such as what type of player I'm facing, how they played their hand so far, pot odds, etc.. the usual variables in poker.) Just as I once hoped that the stock will bounce, I'm now hoping that I will get hit on the turn or the river even with unfavorable odds.  Hope is not a good strategy when you're trading or playing poker.


Common lesson to learn: Hope is not a strategy.  Take your losses early and let your winners run! 

stocknuts

Your Poker Position is a Setup!

The first poker lesson I learned from master bug is that the cards dealt are not the main deciding factor in playing the hand.  Position is the deciding factor whether to play the hand or not and in how to play it.  If you are sitting on the button (dealer) or in the late position (last 1/3 of table), then you have the edge by being able to see what the other players do before you act, and that's your key to playing the hand.  Other factors such as who went into the pot and by how much, and your cards to a lesser extent, will influence your strategy, but position should be the determining factor in what and how to play.  In general, the more checks you have in your favor, such as late position, good hand, limp-ers or first into the pot, etc the better chances you have of winning the hand (post flop play is a slightly different strategy to play than pre-flop, but position is most important in that too)

So the best place to be, from my beginner's point of view, is the late position with a strong hand.  If I have position on my opponents I can play marginal hands knowing that if the flop doesn't hit I should let it go, or try to steal the pot pre flop if I'm the first one in with a reasonable raise (I'll let you know what's a reasonable raise when I figure it out, I'm currently using pot size.) Remember this is all level 1 poker.

In trading stocks, the technical setup is your edge in the market.  The setup determines your entire strategy from how much capital to commit to the trade all the way through to your exit plan.  Similarly, the more checks you have in your favor in trading, such as the health of the market, the strength of the move, etc the larger the capital you should commit to the trade, just as you would when considering your poker strategy before you partake in the hand.

The common lesson here: There are key factors to consider in either game, trading and poker, with varying degrees of importance that weigh in on your decision to be part of the game.    Interesting..

Stocknuts

When Stocks and Poker Collide.

Hello World!
This is a new blog about my trials and tribulations in learning to play poker, No Limit Texas Holdem to be specific.  I'm a successful stock market trader and I have always been very curious about the similarities drawn between trading and playing poker.  In this blog, I will talk about the parallels of the two exciting worlds in addition to my poker learning progress and notes.

I'm lucky to have the best teacher I know in town: PokerBug.  PokerBug has a passion for the game and is working on perfecting it in preparation for the big leagues.  He has taught the game to many successful players, and is respected in the community for his craft!   He has taken me under his wings and is showing me the nuts, so to speak.  My driving force behind this is a second annual charity tournament organized by fellow stock traders.  I did okay in the first, playing party poker style, but I want to do better and want to learn it for the love of the game.   My goal for the blog is for stock traders to learn poker and for poker players to learn how to trade stocks through the commonalities between the two.  Let's see where this takes us.

Peace and profits to all, in stocks and in poker!
Stocknuts