How Trading on the Stock Market Can Make You a Better Poker Player
For many, being an expert in playing games and working the stock market are two separate skills. But, in a lot of ways, both skillsets can work in tandem to improve the other. How exactly can trading on the stock market improve your ability to play games of luck and skill? Well, it’s all in what kind of trading you’re doing. The four key styles of trading can help in harnessing skills in poker – and vice versa.
Position trading is the most common of trading styles, and encompasses lengthy time frames and the “big picture” results. Long-term analyses are carried out and further research is undertaken to establish correlations and best practices along a period of weeks and months. Short-term fluctuations are often ignored. By biding your time and looking at the long-term strategy, one can succeed when playing poker. Rather than aiming for quick wins, you can establish a long-term plan of identifying the weaknesses of your opponents, analysing the cards you have, reading others’ body language and using this information to stay in the game. Indeed, playing online poker with real money or play money can help to improve your trading skills. The game can improve decision-making under pressure, and help develop strategic thinking with limited information available in an easy, simple, and possibly more enjoyable way than the real thing. Plus, the quick-thinking required for poker, be it Texas Hold’em, Omaha or even 5 Card Stud can improve strategic thinking and reflexes when it comes to the other players – which can improve thinking when it comes to making difficult trades.
Swing trading works in the opposite way to position trading in that the trader works on the short-term to try to take advantage of the market position in any given timeframe (usually days). By using price action, traders take advantage of the best time to enter and exit trades. This strategy would be useful when playing poker in order to take each round as it comes. Rather than worrying too much about what the future might hold strategically, which is a facet of bull markets, you can take advantage of winning hands early on, building wealth should it be needed in more difficult times in the future.
Day trading, as its name suggests, focuses solely on closing trades within the day. Day traders use intraday values and often trade with a margin in order to maximise their profits. The deadline of the day means decisions are made on less information of the market as longer-term trading, but the benefits can be great if trading success is seen on a frequent basis. Day trading would suit someone more impulsive, who would try to take advantage of the game and play to each round – often upping the ante and attempting to capitalise on any potential benefits in the player’s own hand.
Scalp trading works by frequently buying and selling for small profits over a large space of time, resulting in prosperity. Scalp traders can benefit from being less affected by market conditions – or at least, perceiving that they are. In poker terms, a scalp trader would be the wild card and would attempt to be reckless in order to scrape by each round, with little thought for the overall big picture that longer-term trading strategies marry themselves to.
While both poker and trading require an amount of skill and luck, taking strategies from one and applying to the other could be a novel way to improve on both fronts. Trading skills can be harnessed through decisions in poker that would likely have less of a negative impact than if it were the real stock market. Both rely on the external influences; whether it is the market, or the other players, the banker, and the draw of the cards.