Poker is sometimes thought of by certain enthusiasts as a type of trading. It has even been lumped in with investing in arguments attempting to frame it as something other than a gambling activity. For the most part, this is a misleading way to frame the game. Poker does involve gambling, because while there are skills and strategies involved, chance plays an outsized role in determining outcomes.
While poker is not a form of trading however, it does teach some skills that are relevant to traders, whether in forex or elsewhere.
Vetting Platforms
In a sort of technical sense, playing online poker can prepare you to research and vet trading platforms you may consider using. Particularly when playing online poker for real money, there is some sensitive information that goes into the sign-up process. You may have to verify your age and/or identity, and eventually link a payment method to a site so that you can deposit funds. Naturally you won’t want to do this at just any website, which is why serious online poker players spend a lot of time researching and comparing options. Trading online, oddly enough, involves essentially the same concerns. To get involved in real financial trading, you’ll have to trust a platform with various aspects of your personal and financial identity. If you happen to have experience vetting poker sites, you may just have slightly better instincts regarding what to look for. You’ll be inclined to assess security, fairness, and track record, and you’ll know how to find trustworthy reviews
Developing Psychology
The greatest benefits regular poker players can enjoy in the trading world are psychological. To an extent this has to do with getting in the right headspace to trade. We’ve remarked on the psychology behind forex trading as a regular or daily activity before — essentially stressing the importance of setting aside a space to minimize distractions and zero in on the market. This is a process online poker players are familiar with. If you spend even a short period of time playing online, you quickly come to recognize the benefits of creating a space that helps you focus, and you’ll be equipped to set up a similar environment for trading. Meanwhile, there are also aspects of psychology that poker players develop that can help with trading in a more strategic sense — which we’ll cover with the next point.
Handling Gains & Losses
It doesn’t take too much time playing poker to learn that there’s no need to pull out of a game with modest winnings — nor to keep on playing after a modest loss in the hopes of winning it back. When you play poker, you learn to build on wins and cut your losses. This lesson essentially amounts to a patient mindset that stands to benefit you in trading as well. Losing on trades is no reason to become stubborn and double down; winning is no reason to cash out immediately. Both activities ultimately reward the patient, and those who adhere to strategy rather than react to results.
Playing the Long Game
Building on the previous point, poker will also teach you a “long game” approach that can help even in day trading. A skilled poker player might lose five games in a day; he or she might spend the better part of a week losing. But with a good understanding of the game and a sound strategic approach, the same player can trust the over time there will be enough wins to offset those losses and result, ultimately, in financial gain. Now, it’s important that this mindset be based on more than raw optimism or assumption; there has to be a strategy or reason to buy the notion of long-term gains. But generally the same approach benefits traders as well, given how easy it is to experience losses en route to more long-term gains.
Conclusion
If this all sounds strange, it may interest you to know that to a point, the connection has actually been proven. Studies on poker and investment have shown that major investors with experience in the game actually do earn greater returns over time. So, while poker is not a necessity for traders, nor a form of trading itself, it can in fact be a useful hobby for traders to develop.
