As I have told you all before, I play tournament poker. When the market behaves as it has behaved recently, I trade less and play more, more poker that is. I am a gambler, so any high probability path to money, I will follow, albeit carefully and with my eyes wide open.
Recently, I have played well, but I noticed yesterday that even though I was winning, I was not having fun. Building one’s bank takes effort, and effort equates to work, so for me, playing tournament poker is work, which means it is a job. Just like trading, treating poker as a job doesn’t guarantee success, but it is a requisite to any success one might achieve.
Anyway, sitting in a tournament yesterday (that I won), as I kept folding hand after hand, the word “boring” kept echoing in my head. Despite this, I knew what I was doing was the only way to get to the money, which is the goal for any tournament player, as well as any trader. Get to the money.
Now, understand, in tournaments, many players try to build their chip stack as quickly as they can, so the call “all-in” is quite frequent early in any tournament. Of course, when you have good cards, or even mediocre cards, it is tempting to respond in kind. It is this moment that is most akin to successful trading. One has to rise above the temptation to play (trade) when the odds of winning are not the best you can get. You see, when three or four others go all-in ahead of you, whatever cards you are holding, even if it they are aces, have less value, meaning, the probability of you winning goes down dramatically. And if only one other player has gone all-in ahead of you, the odds of you winning based on your cards is discernible, but, as we say in poker, any two cards can win, so I view winning the hand as a coin toss. As in trading, a coin toss is simply not acceptable to me, so I find myself folding quite a bit, which is, frankly, boring. Boring, however, is an okay price to pay for winning because it is symbolic of the reason one wins at both poker and trading –patience.
If one is anxious to go “all in” or you want to trade simply because you haven’t (or you think you “should”), don’t do it. The road to consistent success is fraught with danger and boredom is a big danger. The hallmarks of consistent success are patience, awareness, and deliberate action. One thing I have learned over the years is that in both poker and trading, when one is bored, one should fill that time productively. In poker, I watch the players, pay attention to the flow of the game, and I track my cards. In trading, when I am on the sidelines (folded), I do the same – I watch the market, pay attention to the flow of the news, and I track my long-term trades. In both poker and trading, this approach affords me the most opportunity to succeed consistently. Simply, no matter my state of mind, I always endeavor to “stick to the plan” (I fail sometimes.) because I have learned this is the only way to be consistent.
The term most applicable to my approach to poker and trading is tight-aggressive. I remain patient (tight), aware to any potential opportunity, and I take deliberate action (aggressive) when a high-probability opportunity presents itself. Keep this in mind the next time you feel you should be trading, or you are bored because you are not trading in an uncertain and volatile market.
Trade in the day; invest in your life …
