Mental game similarities with poker and trading

brainI’m best known these days for my work helping world class poker players eliminate their mental game weaknesses. However, in recent years I have been working a lot more with financial traders to do the same thing. This was a natural addition to my portfolio. A lot of traders found my book The Mental Game of Poker very useful and they discovered it because a lot of traders play poker, and a lot of poker players have turned to trading.

The terminology may be different, but poker and trading are very similar fields. Not only do the same critical skillsets exist for both, the same mental game issues impact both sets of participants.

Variance

Without doubt the biggest similarity is they both involve a lot of variance. Both fields can see its members make the best possible decision and still lose money, or indeed do everything wrong and turn a profit.

From a mental game perspective this requires a very thick skin and an understanding of this variance. This is why a lot of my work surrounds focussing on the process, rather than the result, as well as understanding the nature of this variance.

Uncertainty

This goes hand in hand with variance. In both trading and poker you deal with a lot of unknowns. In poker you do not know your opponent’s hand, or whether the deck is going to be kind to you. In trading you simply cannot predict the future.

Some people simply cannot handle uncertainty in itself. Other people try to fill in the blanks and end up creating a false perception of their skill. Both of which are hazardous to performance.

A mental game

c3_trade_floor2It’s pretty obvious, but both trading and poker are not physical pursuits. However, just as athletes deal with execution of physical skills, we deal with the execution of quality decisions.

Not everyone realizes how much decision making can be trained in the same way athletic prowess can be, which is why some people are sceptical of how much a mental game coach can help someone with a mentally taxing job.

Attitudes to money

Everyone has an attitude towards money that goes way beyond just the dollar amounts. The money always means something more than just the money. For some money means power, for some in means freedom, for some in means security and a way to put food in their kid’s mouth. Some people see money as a way of proving their parents wrong, and some people see it as the thing that will buy them that new car.

Whatever it means to them, when poker players and traders lose (or win) money, it has a profound impact on them. It tends to challenge their sense of identity and gets much more personal than simply having a bad day at work.

There is a reason why poker players make good traders, and why traders make good poker players. My job is to help them eliminate the mental game leaks that can hold them back in either pursuit.

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