REAL WORLD
Gaming Theory
Trading And Poker Parallelsby Don Bright with Darren Clifford
Risk? Yes. Reward? Of course. But the similarities go deeper.A couple of months ago, I was asked about the similarities between stock trading and what seems to be the new national pastime, poker. Las Vegas is home to some of the world's best poker players, and Bright Trading is headquartered in Las Vegas. It just so happens that some of the world's best poker players are also Bright traders. My brother, Bob, made his first fortune playing blackjack back in the 1970s. He took that money and bought a seat on an exchange to start trading options in 1978. Over the last couple of decades, we have always played poker at our family Christmas gatherings (everyone should have a family tradition, right?).
Now, for several years we have had a trader named Chris "Jesus" Ferguson in our organization, and I always thought it was neat to have a younger guy with an interesting appearance as part of our team. To prove that you can't judge a book by its cover, Ferguson has a doctorate in computer sciences. Ray Bitar, our Los Angeles office manager for many years, teamed up with Ferguson and several top poker players to form a new business venture, Full Tilt Poker. Bitar is now the CEO of Tiltware LLC, in what has become one of the most popular online poker sites among serious players.
These business and personal friendships have allowed me to look inside the world of professional poker. My brother and I actually sponsored a poker tournament in Anaheim, CA, in 2005, and asked the players there who also happen to be traders to share their thoughts about the similarities between the two activities. Here is a listing of some of the basic correlations:
Both professions can be performed from virtually anywhere on the planet (and even "virtually"). Success in either field provides a great feeling of independence, and of course, the financial rewards for both can be great. Let's explore a few more points:
1) Tilt. Emotions do not dictate the cards or the price of a stock, but they do affect how we react to them. Being able to stay away from emotions and only play or trade probabilities leads to success in both trading and poker.2) Number of outs. The more ways you have to make a hand, the greater your probability of successes. In trading, the more ways you have to hedge a trade, the more outs you have, and the greater your chances of success.
...Continued in the March issue of Technical Analysis of STOCKS & COMMODITIES
Excerpted from an article originally published in the March 2006 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2006, Technical Analysis, Inc.
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