Given the uncertainty of the financial market, there is always a risk involved in whatever decision one takes. The key to success in the stock market, therefore, is to take calculated risks. It’s much like a game of poker, where the players have to make decisions in the dark by primarily assessing the situation, and calculating the probability of opponents having a better hand. It’s no wonder then that pro poker players make better financial decisions when compared to others.
So, the question is whether it is worth learning poker before trading? One can easily find the answer by understanding the synergy between poker and stock market investment.
Poker players understand the risk-reward relationship, something which forms the basis of trading. Both in poker and trading, you create high chances of success by making thought-through decisions. Poker players are good with managing risks, they know when to go all-in or when to be tight with the pots. Just as any good poker player would calculate the percentage of the pot to be played within a given situation, a successful investor would invest a particular amount in hand only after analysing the market conditions.
Lessons poker can teach about trading
Drawing a parallel between poker and stock market investment highlights certain indispensable lessons that poker as a skill-based game can teach about trading. Both in stocks and in poker, you risk money to make decisions that balance expected returns against the associated risks.
By helping develop self-discipline, patience, and strong observational skills in analysing intrinsic cues, poker players acquire expertise in risk management, something that helps them become long-term players in the stock market. It’s the lessons on maximising rewards by minimising risk in poker that helps them ensure ongoing success in trading.
Expertise in probability assessment and calculation makes poker players masters in devising strategies to ascertain gains in the stock market. Practicing meticulous analysis on the poker hands equip the players with a unique ability to successfully analyse the market before making any investment and thereby reducing risks.
Trading for profitability needs a lot of patience much like poker where an experienced player waits patiently for the right hand to put the biggest risk. According to great poker players, it is extremely important to know when to press and when to press aggressively, in trading too one needs to sit and wait for the right time.
Poker players are rational thinkers who do not flow with emotion in high-pressure situations which helps them be patient with the ups and downs in the stock market to wait for the right time before making the exit decision.
India’s poker champion and trading
The National Champion of the recently concluded National Poker Series (NPS), Mohammad Azhar believes that success in poker, as well as trading, depends equally on maintaining self-discipline and strategic risk management. He is as successful an investor as he is a poker player. Azhar is the top podium finisher of the championship, hosted by Baazi Games. The gold medallist and stock market enthusiast will now represent India in one of the biggest global poker events to be conducted in Las Vegas.
“I came into poker first and the market second. Poker has rather taught me how to take calculated risks, make well-hedged risks and try to not delve into the market emotionally. The game demands a massive amount of focused attention and unnerving your opponents with whatever tiny piece of information is available, so does the stock market. And I think the biggest similarity between poker and trading is that both entail calculated risks and discipline. One may have the greatest skills or predictions but without the right discipline no one can beat either poker or the stock market,” the winner of India's first-ever National Poker Championship said.
Hosted by Baazi Games, India’s renowned gaming tech group, NPS is a premium tournament series open to all and aimed at enabling enthusiastic poker players in India to become true champions. The first-ever edition of this prestigious poker tournament series, hosted on PokerBaazi.com, discovered master poker players across the country, finding its gold medallists on June 27.
Azhar’s performance in the game has made it evident that poker is all about grit, patience, and making smart decisions when you do not have all the facts before you, a skill he uses while investing in the financial market as well.
In financial trading, there are different things that affect the market, the facts are not all known and the long-term success here is entirely based on intelligent decisions that you make. So, playing poker will help you develop competence in measuring risk and sharpen your investment capability by transferring poker skills to trading, ultimately paving the way for long-term success in the stock market
This is a partnered post.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
