Those who barely have any knowledge about investing or the forex market often assume that trading is a game of chance — and in some ways, it is. Every investor knows that any trade he or she executes can either turn a profit or lead to financial loss.
Indeed, it’s hard to clearly define the difference between gambling and investing. However, a key similarity between the two is that you can improve your chances of success by being strategic and having a tried-and-tested system. Poker players, in particular, know firsthand that having the skill, knowledge, and experience can significantly reduce their chances of losing the pot. The same can also be applied to trading, as gaining more exposure to the forex market and expanding their knowledge can help traders mitigate market risks.
So, let’s discuss why poker players often make successful traders.
They know how to manage their risk
We all know that poker is a high-risk game. We often hear of people who either become one day millionaires with poker or instantly lose all their cash in a single day. Because of this, poker players know that not being mindful of the risks involved in the game can have serious repercussions on their financial well-being. In addition, players also study how they can calculate poker odds in order to make mathematically correct and sound decisions during the game. This key trait makes poker players perfect for trading. In trading, knowing how to expertly manage risk can help individuals make consistent returns and improve their chances of a successful trading career.
They know how to read emotions
Both trading and poker highlight how important it is to be hypersensitive to emotions. In trading, how people feel and react towards high-impact trends and news can drastically change the financial market. Because of this, traders should be able to anticipate the emotions of the general public if they want to bet on winning trades. On the other hand, poker players who are able to identify and determine subtle changes in the face of their competitors can figure out if their opponent is bluffing or has a good hand. By being sensitive to emotionally-driven changes, poker players can learn how to read the financial markets and determine which direction leads to success.
They know how to be decisive
Making quick and informed decisions does not come naturally for most people. With poker, you can get to hone this skill since you’ll have to constantly adjust your strategy and goals as the game goes on. For instance, you might make the hard decision of folding halfway through the game in case you’re dealt with a horrible set of cards that gives you virtually no chance of winning the pot. In the forex market, experienced traders tend to change their direction and make final decisions in a matter of seconds. Successful traders are often subscribed to news outlets that report global news the second they get wind of it. This allows them to stay ahead of the game and quickly pull out their trades at the onset of an economically disruptive global event.
At the end of the day, with the help of comprehensive trading guides and other resources, poker players have a better chance of finding success in the forex market compared to individuals who have no experience playing high-risk games.