REAL WORLD
Gaming Theory
Trading And Poker Parallels
by Don Bright with Darren Clifford
Risk? Yes. Reward? Of course. But the similarities go deeper.
A couple of months ago, I was asked about
the similarities between stock trading and what seems to be the new national
pastime, poker. Las Vegas is home to some of the world's best poker players,
and Bright Trading is headquartered in Las Vegas. It just so happens that
some of the world's best poker players are also Bright traders. My brother,
Bob, made his first fortune playing blackjack back in the 1970s. He took
that money and bought a seat on an exchange to start trading options in
1978. Over the last couple of decades, we have always played poker at our
family Christmas gatherings (everyone should have a family tradition, right?).
Now, for several years we have had a trader named Chris "Jesus" Ferguson
in our organization, and I always thought it was neat to have a younger
guy with an interesting appearance as part of our team. To prove that you
can't judge a book by its cover, Ferguson has a doctorate in computer sciences.
Ray Bitar, our Los Angeles office manager for many years, teamed up with
Ferguson and several top poker players to form a new business venture,
Full Tilt Poker. Bitar is now the CEO of Tiltware LLC, in what has become
one of the most popular online poker sites among serious players.
These business and personal friendships have allowed me to look inside
the world of professional poker. My brother and I actually sponsored a
poker tournament in Anaheim, CA, in 2005, and asked the players there who
also happen to be traders to share their thoughts about the similarities
between the two activities. Here is a listing of some of the basic correlations:
Both professions can be performed from virtually anywhere on the planet
(and even "virtually"). Success in either field provides a great feeling
of independence, and of course, the financial rewards for both can be great.
Let's explore a few more points:
1) Tilt. Emotions do not dictate the cards or
the price of a stock, but they do affect how we react to them. Being able
to stay away from emotions and only play or trade probabilities leads to
success in both trading and poker.
2) Number of outs. The more ways you have to make a hand,
the greater your probability of successes. In trading, the more ways you
have to hedge a trade, the more outs you have, and the greater your chances
of success.
...Continued in the March issue of Technical Analysis of STOCKS
& COMMODITIES
Excerpted from an article originally published in the March 2006
issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights
reserved. © Copyright 2006, Technical Analysis, Inc.
Return to March 2006 Contents
