7 Things Forex Traders Can Learn from Poker Players

trading like a poker player

Thrill, excitement, greed are common sensations experienced by both traders and gamblers. These sensations mark the features of their characters in the financial market. When poker experts take part in the trading market, they usually win.

There has been a lot of talk going on regarding Poker Players and Forex Traders. While Forex Trading is seen as an investment, Poker is more about gambling. Both are different in their areas, but both aim to gain money in the end. 

There are more similarities than differences between poker players and Forex traders. Poker players go by the rules of capital and risk management and then take a step in the currency market.

First, let us understand what Forex trading and Poker is all about.

Forex Trading and Poker

If you aren’t familiar with the two terms, Forex Trading and Poker, they might seem different from each other. 

Poker is a game that people play for a living, which requires some real and refined intellectual skills. Forex Trading also involves skills, particularly business skills, that you would learn in a business school. One uses gaming skills and other business analytics.

Having skills is not enough if you cannot execute them properly in your strategies while playing. A poker player spends most of their time training and refining their skills away from the table. If you are playing Poker for a living, you must know how to deal under pressure, and trading also involves a high-pressure environment.

Trading is no doubt more intense than Poker, and poker players had to go through hard training to become professional traders. However, poker players already have some of the required qualities and a strong background in risk and capital management that make them a good candidate for a trader.

No matter how much you differentiate between the two terms, there are still many similarities between the two. Trading is much like gambling as Poker is, but both involve intelligence to turn the odds in their favor. 

So, where can the talents of poker players become useful? Where else can poker players fit and show their skills? Well, we have found the perfect alternative, and that is Forex Trading.

 If you still don’t believe us, we have provided seven things which Forex players can learn from poker players and excel at trading.

7 Reasons to Know Why Poker Skills Are Necessary for Forex Trading

Undoubtedly, Poker is among the most famous games dealing with winning probability in recent times. And you might have heard of poker players turning out to be successful Forex Traders. You will learn several things from a poker player to apply in your Forex trading for successful outcomes.

Here, let us look at those seven things in detail.

1.     To Think Strategically

While playing Poker, you should know when and how to execute your strategy. You should be prepared to play several decks of cards before you see that things are working out in your favor. 

If you get emotional and give up in the beginning after losing three or four hands in the poker game, you will lose all your chance of winning. A professional and thoughtful poker player knows that only after playing several decks they can plan and execute the strategy. 

Towards the end, it becomes a game of numbers, you just have to stick to your poker edge while playing with other hands, and you will have more chances of winning. Professional players will observe the competitors and their behaviors before making their move. 

Strategic Thinking is crucial when you have to make intense decisions. Take enough time to learn the skills and develop the plan before jumping into the financial market.

2.     To Know When to Fold A Trade and When to Hold A Trade

The most underrated lessons you need to learn from poker players know when to close a trade and when to hold on to a trade. That is the most difficult decision when it comes down to dealing with when you have to close a trade. You must learn the skill effectively to make consistent money in the financial market.

You must excel in the art of Trade management. This is the area that gives the most trouble to the Forex traders. You can easily get into a profitable trade, but it isn’t easy to manage that trade to get a satisfied and desired outcome. 

A poker player knows the art of folding and holding his hand at the right time. Like them, Forex traders need to know when you can take a loss and when you should keep trading or playing. 

Luckily, now you have the “set and forget” option where you can set your trade and let the market do its work without your intrusion. Markets flow naturally where you cannot intervene between your trade every time it goes against your target.

Trade management will become useful; here, you should know how to read the price action and identify the changes in the market conditions that can affect your trade. If you can identify with such situations, you can consider manually closing the trade before it hits your profit or loss target.

3.     Risk Management

Managing chips are a crucial part of poker games and require effective planning and strategy. A trained poker player knows not to light on a strong hand and not go betting all the chips on a weak hand. You must know the right moment to push when you have got the edge without getting busted.

As a poker player, a trader must know every low-risk opportunity while placing a trade. If a poker player is dealt with by a weak hand or outperformed, they will fold the chips quickly to use them on a better hand later in the game. Inversely, a poker player will keep betting and playing when they get pocket aces with an ace on the flop.

The only difference between trading and Poker lies in the rules of the game. There is a start and finish in Poker’s game, while in trading, you have to decide when you want to finish the game in terms of closing or stopping the trade altogether.

You have to know your edge in trading; otherwise, you are risking your money in a low-probability trade. The aim should be to manage your trading chips or capital in a manner that you do not lose your money from weak hands or even through emotions. This is because, when high-probability and strong hands come along, you can make as much money out of the trade. 

4.     To Keep Your Emotions Under Control  

The first rule of trading or Poker or any game per se is to have enough confidence over yourself and your methods. There should be no room for self-doubt. In a poker game, you need to process information quickly and make decisions instantly with no self-doubt.

Trading works the same way, you cannot doubt your trading methods when dealing with a trade that meets your criteria, and you need to take immediate actions.

If you choose to let your emotions overwhelm you during the game, your chances of losing are high. Similarly, if you make decisions in trading based on your emotions, you might lose a lot of money rather than gaining it.

Like poker players, Forex traders need to maintain a strong emotional and mental stability to deal with stressful situations while sticking to their original plans in both losing and winning conditions. Additionally, patience is what Forex traders need to learn from poker players to win the game.

You can apply some of these methods to maintain emotional stability.

  • You can take advantage of your opponent’s emotional state and make decisions in your favor.
  • You should practice enduring your psychological impulses. You can analyze your and your trader’s experience and read about the market’s latest trading techniques.
  • You should not allow any kind of error, and loss hinders your ability to make opinions. Try to eliminate any psychological distortions.

5.     Mathematical Modeling And Analysis

The poker game is all about applying strategies and algorithms for risk elimination. The famous mathematical analyses are parlay and martingale:

  • Martingale: It is a model where a loss at one position is compensated in the next by increasing the volume until you have recovered the profit or loss of the previous position. Only after that can you use the minimum amount for the game or trading.
  • Anti-martingale or Parlay: The volume increases after every successful position.

In Poker, you are not allowed to use any software or calculator for the calculations. The mathematical systems act as an advisor for the poker players. Thus, poker players learn the count by heart.

With poker games, you learn to use various tactics keeping in mind the situations at hand, which are equally beneficial for Forex Traders in the market.

6.     Commitment and Discipline

What else is needed in a place like Poker and Forex trading other than commitment and discipline? With these qualities, you can avoid any impulsive behavior and always stick to your strategies. 

Despite many temptations on the way, a disciplined approach is what makes the poker player successful in the end. A poker player is faced with many unforeseen situations where they have the chance to either give up the game or continue with their plan. The situations are there to test the commitment of the players towards the game.

To succeed in the game, one must develop a methodical approach. With enough practice and training, a poker player doesn’t get bored or involved in the hysteria in the game’s long term. Forex traders should also practice discipline and stick to their plans and strategies to be consistent for the long term in the financial market.

The quality comes in handy when you have to deal with stressful as well as exciting situations without the need to find a middle ground in your plan.

7.     Having A Long-Term Mindset

This all comes down to the long-term commitments by the poker players in the gaming industry. Poker players look for consistency while maintaining low risk and positive returns over a longer period. 

If you sit at the table with the mind of winning a huge lot your first time, you are harboring a wrong mindset. Likewise, if you begin trading with a mindset of gaining money on day one, then you are on the wrong path. This is not the long-term mindset you need in your business.

As poker players, the right approach would be to take a manageable and realistic approach while solidifying your discipline and commitments for a longer period. You will not achieve everything immediately; you need patience and the right approach for that.

Now that you know what you can learn from poker players, you can start brushing up your trading game.

Some Other Similarities Between Poker and Forex Trading

We have included the seven important things you can learn from poker players to incorporate into your Forex trading. However, some other similarities between the two are worth mentioning.

Available 24 hours

Both Poker and Forex trading are at your disposal round the clock. However, trading sometimes isn’t operating when the wholesale currency market is closed.

Rakeback Schemes

Both Forex and Poker employ rake backs. The Poker employs rake backs to offer the long-term dedicated players a repayment on the house takes. Take a look at how it works:

  • The platforms use third party marketers to deliver users to the trading site or houses.
  • Those third-party marketers take a commission from the platform of the users they had delivered.
  • Whenever a new member signs up to the trading sites or houses, the third parties deliver the new users their commission.

Practice Accounts

Just like Demo Trading Accounts, Poker also offers practice and play-money accounts for the new users to try their hand.

Role of Chance

A professional poker player will acknowledge their chances in both the states of the game. Either they win or lose; they will approach the game with a plan and keep refining their skills. 

The same goes for Forex Trading; there will be times when you are holding on to trade, and suddenly the market changes, and you suffer a loss. You cannot escape the role of chance, but you can surely become successful in the long term with a solid plan.

Managing Bankroll

Poker Player and Forex Traders know how to manage and fund their bankroll, meaning the amount of money that they deal with from time to time. They know how they can leverage the money to get the biggest stake.

What Are the Advantages of Forex Trading Over Poker Playing?

Now that you have learned how poker players can help you progress in your trading game in the financial market. You should also know about the advantages that Forex trading has over Poker Playing. 

Here are a few of the advantages.

  • With Forex Trading, you can make more money as compared to a poker player. You have to play continuously to earn a considerable amount of money while there are more chances of making a huge amount of money through trading.
  • While playing Poker, you need to keep playing till the game is not over. This is not the case with Forex Trading; you can place your trade, stop or take profit, and go anywhere you like while your money is being processed.
  • In Poker, you have different opponents each day, and the opponents tend to get stronger as you reach the higher stakes. While in Forex Trading, you have the same opponents daily.
  • Trading is more complicated and difficult than playing Poker. Even a beginner can win the game for the first time, but this is highly uncommon at trading. Trading requires more information and also experience in the market.
  • In Poker, if you keep folding hands frequently, you will lose big or small money depending on the stake. But if you skip a trade, you won’t lose any money.
  • Forex Trading requires more patience and concentration. You cannot just open the computer and start making trades. You have to meet certain trading criteria and quality set-ups. On the other hand, Poker allows a place for emotions, addictions, and judgments. 

Final Thoughts

Poker players and Forex Traders both share a similar Psychology. The motive of both of them is to make money. For that, they need advanced knowledge of the trading and game with qualities including patience, emotional stability, disciple, and commitment. 

A poker player can get into Forex trading more effectively to use their poker skills and work more efficiently than a Forex trader. In addition to this, the other trait that is essential to both of them is to make a sound decision during uncertain situations. 

With the characteristics of analysis, probabilities, and decision-making, many successful traders were poker players in the beginning. Therefore, Poker’s skills are not limited to the game but are transferable to the financial trading business as well.