In Texas Hold’em a pair of aces is the best possible starting hand, so if you’re holding American Airlines and someone goes all in, you should surely call – but you will sometimes lose because you can’t predict what other cards will turn up, and actually, even against a random hand, aces will lose 15% of the time. Even if you lose though, calling was the right choice. The bad outcome just means you were unlucky
-Against Empathy, Paul Bloom
I wrote this quote down in my journal. I can’t remember the original context… but it appealed to me because its a great quote for trading.
Sometimes you will do everything right… and still lose. This is one of those things that people often struggle to wrap their heads around in trading. Sometimes you will lose. (even with the best hand)
Professional gamblers are often cited as being easy to teach or mentor, at least when it comes to trading, because they understand how to manage risk. Vaguely I wonder if this is true for all gamblers, or just poker players? I don’t really understand (or appreciate) the other games of ‘chance’… so I don’t really know. Are there professional roulette players?
Of course in poker you’re playing against an irrational human that can be bluffed, bullied and cajoled. The markets are uncaring and unfeeling and don’t really appreciate your psychological machinations. So there are some differences.
But I think I agree on the risk management side of the theory. Well… assuming you’re a successful gambler.
Traders on the other hand baulk at being compared to gamblers. Because… eh… trading… is… respectable? And gambling is clearly a frowned upon enterprise. Pretty sure it says so in the bible… (being Catholic I’ve never actually read it)
I mean we use technical analysis. And research serious fundamentals… and… eh… theres all these graphs and stuff. And jargon. We have jargon in spades (something gamblers only have on their cards). Totally legitimises the entire industry!
On some level I appreciate I’m a gambler. But in my mind I’m Mel Gibson in Maverick.
Eh… before he became a crazy anti-semitic with a penchant for drunk driving I mean.
Actually… (now that I think about it) being able skew yourself away from the fabric of reality is likely the best skill to have. Makes everything easier.