The arrival of the Thanksgiving holiday brings the one year anniversary of an article I wrote that was published in the magazine: The Trader’s Journal.
The article explains the basis of position sizing and expectancy and how poker has made me a better trader.
By playing poker, I have cemented my understanding of how people act, how to play the right odds, how to develop expectancies based on the cards I am dealt and how to position my trades properly. Watching these techniques and rules work within a short period of time really drove home the importance of a system that follows the proven rules.
Trading can be a long, tedious and impatient road to travel but following the rules and employing proper position sizing and expectancy calculations will almost guarantee success if the rest of you system does it’s job.
If your system is broke, find one that works and understand that you won’t go broke by properly placing your trades or bets and understanding how much you can and will win from each trade and/or bet.
You article was a good read. However, there is not enough data to support Player B who played less hands and net profit. I played poker and know that good hands at the beginning can be devastating at the river. And if you are talking about no-limit poker, then one loss can be devasting.
fortune,
you are correct about a devestating hand here or there but over time, the odds work out in favor of the skilled player. We are playing odds (expectancy over time), not one hand luck. Any one hand can be good or bad luck. Besides, you will get the good luck instead of the bad luck from time to time.
Bottom line: play the odds and play often and it will all work out for the skilled player. The same goes for the stock market – odds over time (not every trade works out).