I have been playing poker for more than 25 years, trading options for nearly 15 years. I love both games, the challenges they present and the mind exercises of the sport. The two activities are eerily similar. The psychological aspects require a mastery of the game and knowing how to read people and emotions. Below are some of the characteristics required for success.
Patience is the most important. In poker, you have to wait for the right cards to come. Of course, bluffing your way through the game is an option but won’t always work. In trading, patience is also a virtue that pays off to those who can wait for a move to occur. Accepting a loss is also a trait of successful poker players or traders.
Trading is not a game of perfect, poker is a game of odds and probabilities – I’ve seen many a player have pocket aces cracked in hold ’em (the best starting hand you can have). Similarly, I’ve seen traders take a ‘sure thing’ and turn it into a bad loss. It happens, we have to deal with it, make and adjustment and just move on.
In poker, we use chips as the tool to build our stack. They do not have value —we cannot buy food with chips, nor a drink or a coat or a cab ride. They are used to increase our wealth at the table. When we are done, we cash in our chips and evaluate our results. Just like trading, our accounts are a means to build wealth —we should not be using our rent, food or clothing money to trade, otherwise we will trade with emotion an no doubt make grave errors.
Like any poker player knows, trading takes a commitment to learning, practice and repetition. Also, being flexible in certain situations —have your rules but not being afraid to bend them.
= = =
Bob Lang has been managing private options trading accounts for clients since 2004 and providing subscribers with guidance on trading options for income at Explosive Options since 2011.
