Poker Is Flush With Insight for Traders

So, after spending 18 hours a day for four days playing poker, here are some of the specific parallels I have observed.

Pay attention ... and it will pay you. Concentrate on everything when you are playing/trading. Watch and listen; remember to do both and relate the two.

Understand when to play aggressively. It's the winning way. Don't be a tight or loose player/trader; be a solid one and recognize when it is time to press your bets/positions. To attain superior returns in poker and investing over the long run, grind it out (in stocks until you are up 30%-40%, and then if you have convictions, go for a 100% year). If you can avoid losing and put together a few 100% years, you can achieve outstanding long-term investment performance.

Tells: Look for them, and you will find them. Poker players and stock markets have tells -- giveaway moves that are very revealing. Learn to recognize them. History is your textbook. (For example, improving corporate financials usually presage a rally; conversely, deteriorating financials usually augur poor market performance.)

ESP ... it's a jellyroll. In those rare instances when all your card knowledge and market judgment/knowledge leave you in doubt, go with your strong feelings and not against them.

Honor: a gambler/trader's ace in the hole. A good reputation and respect from others will put you in good stead.

Be as competitive as you can be. Go into a poker game and into a trade with the idea of completely destroying your opponent or scoring a major investment coup. If you win a pot or make a successful trade, nearly always play the next pot or make the next trade shortly thereafter -- within reason. Although the cards and trades might break even in the long run, rushes do happen, and momentum often feeds upon itself. When you earn the right to be aggressive, you should be aggressive. When you have a tremendous conviction in a poker hand or trade, you have to go for the jugular.