An update on my poker playing
I want to talk about poker again. I played in a $5 tournament with 280 players. I can't even remember cashing in on such a tournament, but I know I can last a long time, and the most I'd lose is $5. The tournament started at 2:30 PM and I was playing until almost 7PM. The reason is that I not only made it to the "make money" level, but I finished second. I finished 8th in a tournament with 115 players once. In that one, I and had a chance to win, but because I was second in chips at the final table. But I ended up going against the chip leader all in on the first hand. I lost on the river and ending up making $195 by finishing 8th. It cost me $20 to make $195. In this tournament, it cost me $5 to make $231. A new record day for me.
But the story is not over. On Saturday, I did the same thing, but the results were a little different. This time I finished first out of 343 players and doubled my payday. Again a new record. Coming in second on Friday made me think I was lucky. Coming in first and second on two consecutive days made me think I was pretty good. However, I then entered some 9 player tournaments in which the top 3 get paid. I could make money in any of those and in the first one I was eliminated first.
A big ego hinders trading and playing poker.
Van
Comments
I come to trading after cutting my teeth playing poker. So far I think poker is a much more psychologically battering game in terms of swings and luck. Tournaments especially are very luck-dependent. Even when you are positive that you are a better player you will frequently lose.
The lowest level tournaments, the $1 and $5, are somewhat beatable by playing tight and letting the crazy players just knock each other out. When you increase stakes to the $20 and above, there start to be many more average players who are not beatable by simply waiting them out.
Poker is a great game, and true understanding of risk is a huge advantage. Even the best professionals have losing months - never get too high on your results.
Looking forward to Nov 4th. Enjoy,
Chabah
Posted by: Chabah | November 2, 2006 04:31 PM
Dr. Tharp
Thank you for your daily articles. They are very helpful.
Overconfidence presents a trading conundrum. I find I cant trade big or successfully without lots of confidence. But when Im at my most confident, the point where I lose all anxiety, I tend to have my biggest losses. How can a trader retain a healthy level of anxiety while remaining confident enough to "stay big"?
Posted by: Nick | November 4, 2006 09:13 PM
Dr Tharp,
I am an engineer by training and an entrepreneur and salesman by trade. The engineer part made me believe that I should be able to come up with a system that would make money by keeping as many of the “odds” in my favor as possible. After reading your book “Save Strategies for Financial Freedom”, I thought I had found the Holy Grail of investing, a simple system, little time invested, increased returns etc. As a result of your RED market condition, I pulled a significant portion of my net worth out of mutual funds invested with brokerage firms while I did more investigation, including reading your book “Trade Your Way to Financial Freedom”.
Luckily I also bought your Peak Performance Program. The results and recommendations of the “Investment Psychological Inventory” revealed a lot of reasons why I have not been successful in dealing with a brokerage firm investment advisor and why I would not be successful making my own investment decisions. As a result of the profile results, I started with Part 2, “How to Control Stress”. I discovered that my fear of losing the wealth that I had earned was causing me to make self-destructive, emotional decisions. The recommendation from the profile evaluation, “You should not be investing in speculative areas under any circumstances”, was a real wakeup call. Now I know why I was comfortable having money out of the market as the DOW hit an all-time high.
I have moved on to Part 1, “How to Use Risk”. In the Prediction Test, I used a chart analysis technique that I learned from another book on trading. I correctly predicted the direction of 17 out of 20 charts, but I put such a low confidence level on my choices that would have reduced the return on those highly successful predictions to around 15%. I now know that I need to test this ability more thoroughly and get my confidence to an appropriate level of expectation to reduce stress to an acceptable level to make money. I can’t wait to get to the rest of the program while I continue to practice the stress control techniques in Part 2.
Thank you!
Glen Goss
Posted by: Glen Goss | November 10, 2006 01:47 PM