buboreksrac
03-02-2011, 04:00 PM
Hi all,
I am opening this thread with an intention to exchange thoughts on the similarities and differences between poker and the stock market. This issue has been on my mind for some time now, and I am now going to share what I have collected so far:
I have read several analogies concerning poker and stocks, and I think this could help those willing to try themselves out in a different kind of 'gambling'.
The two 'games' are based around the same concepts:
Stocks, just like poker, is a game where bits of information are missing, which means that there are certain details concerning the outcome that you cannot be sure about, because of the nature of the game (by this I mean hole cards of other players, the possible reaction of people exchanging stocks, and the future happenings in economics).
Both games are non-zero sum games, which means, that you not only have to beat your opponents, but also the rake ns the spread (the difference between buying and selling prices) in order to be profitable.
Apart from this, both have a luck factor/variance/gneral obscurity, because of which I think these two 'game types' can be treated similarly.
In poker, as you all may well know, we have the opportunity to choose from three options on four streets (plus bet sizing in no-limit). The stock market works a bit differently: there is only one 'street', but also with three options to choose from (you either bet that the rate will drop, fall, or you choose not to exchange stocks), and there is another, fourth 'dimension' in the picture: time and timing, which plays a much more important role than in poker.
Basically, you can receive information from two sources when doing stocks: you can read news atricles and reports, and stare at graphs. In practice, for the ones not thinking in months' terms, there is only the second option left, as the rate's short-term correlation with the implied real value is not a general occurrence. This is appointed by fundamental analysys. Technical analysys, on the other hand, is some kind of applied social psychology, where the participants' opinion and feelings are visualized in the form of a graph, on which the two axles are time and the actual rates.
These are the basic aspects I could think of at the moment, but I'm really thinking of starting doing Forex besides poker. Does anybody have any experience/opinion on this issue? I would be happy to receive all kinds of feedback, whether it is something worth starting.
I have also collected a few useful links:
Forex Training Online: Learn Foreign Exchange (FX) Currency Trading
http://www.babypips.com/school/
Two books, which I think sum up the basics pretty well:
Alexander Elder: Trading for a living
http://www.megaupload.com/?d=S888YX5Z
Ed Ponsi: Forex Patterns and Probabilities
http://www.megaupload.com/?d=ADBCLO2M
I am opening this thread with an intention to exchange thoughts on the similarities and differences between poker and the stock market. This issue has been on my mind for some time now, and I am now going to share what I have collected so far:
I have read several analogies concerning poker and stocks, and I think this could help those willing to try themselves out in a different kind of 'gambling'.
The two 'games' are based around the same concepts:
Stocks, just like poker, is a game where bits of information are missing, which means that there are certain details concerning the outcome that you cannot be sure about, because of the nature of the game (by this I mean hole cards of other players, the possible reaction of people exchanging stocks, and the future happenings in economics).
Both games are non-zero sum games, which means, that you not only have to beat your opponents, but also the rake ns the spread (the difference between buying and selling prices) in order to be profitable.
Apart from this, both have a luck factor/variance/gneral obscurity, because of which I think these two 'game types' can be treated similarly.
In poker, as you all may well know, we have the opportunity to choose from three options on four streets (plus bet sizing in no-limit). The stock market works a bit differently: there is only one 'street', but also with three options to choose from (you either bet that the rate will drop, fall, or you choose not to exchange stocks), and there is another, fourth 'dimension' in the picture: time and timing, which plays a much more important role than in poker.
Basically, you can receive information from two sources when doing stocks: you can read news atricles and reports, and stare at graphs. In practice, for the ones not thinking in months' terms, there is only the second option left, as the rate's short-term correlation with the implied real value is not a general occurrence. This is appointed by fundamental analysys. Technical analysys, on the other hand, is some kind of applied social psychology, where the participants' opinion and feelings are visualized in the form of a graph, on which the two axles are time and the actual rates.
These are the basic aspects I could think of at the moment, but I'm really thinking of starting doing Forex besides poker. Does anybody have any experience/opinion on this issue? I would be happy to receive all kinds of feedback, whether it is something worth starting.
I have also collected a few useful links:
Forex Training Online: Learn Foreign Exchange (FX) Currency Trading
http://www.babypips.com/school/
Two books, which I think sum up the basics pretty well:
Alexander Elder: Trading for a living
http://www.megaupload.com/?d=S888YX5Z
Ed Ponsi: Forex Patterns and Probabilities
http://www.megaupload.com/?d=ADBCLO2M