I play a lot of poker tournaments now and I usually finish in the money or close to it. However, I've noticed that I still occasionally make a big mistake. What's a big mistake? Well, suppose I raise to 4 times big blind before the flop. I have King Ten suited. That is the 14th best starting hand of the 169 possible hands when playing with 9 other people.

Now what happened today was someone quadrupled my raise. My immediate response should have been to think, "this is getting really big. What are the chances that this guy has me beat? He could easily have a large pair a very high suited connector (AK suited). I have the 14th best hand but if he has, let's say, a pair of queens, he's got me beat." I didn't do that, I just called, "thinking he's probably bluffing or something similar." Sinice I had the 14th best starting hand, it was probably reasonable to call or it might have been a minor mistakes. He did have a pair of queens, but I didn' tknow that.

The flop comes (the first three common cards that are dealt face up) and I don't improve my hand. I bet half my chips to get his attention which was my second mistake and my first BIG mistake. My hand was not improved at all...I probably shouldn't have called the initial raise, and I certainly should not have bet when the flop didn't improve my hand. I bet simply because I was feeling "powerful." I wanted to bully him. And those feeling produced a huge mistake. But at least I'm aware of the feelings that come up and can work on them constantly.

My opponent then goes all in, and as if I wasn't stupid enough so far, I called his bet. Why? I have nothing. Most of my chips are gone if I lose and I bet them without even having a pair. My thinking was, "I'm pot committed now, perhaps I'll get something with the last two cards." Big, big mistakes. But at the time, I didn't think any of these things -- I just reacted. I had about 30,000 chips when this started and let's say my initial bet of 2000 and the raise to 8000 were okay. At that point, I still had 22,000 chips and enough to compete in the tournament. But the next bet cost me $10,000 more and the all in reraise cost another $10,000. Those two mistakes cost me 2/3rd of my chip stack (equity) and were disastrous. They were emotional mistakes.

And, of course, my opponent, as I said, had the third best starting hand in texas holdem, a pair of queens. There were only three cards in the deck (the other three kinds) that would allow me to beat him. But no kind came up in the last two common cards and after those mistakes, I'm practically out of the tourament.

At the time, I made those mistakes, I was 4th in chips among the final 9 of 90 players. A first place win in the tournament was huge compared to a ninth place finish. Ninth place paid about twice the entry entry-- which wasn't much payoff for three hours of poker. But when I finished the three mistakes in that hand, I was 9th in chips. And I was eliminated from the tournament shortly thereafter in 9th place.

I'd played about 200 hands mistake free and then I make a bone head play and basically miss out on a big payoff.
Mistakes in poker, just like mistakes in trading, can kill you.

Now you might ask why did I made the mistakes. The answer is simple -- emotions. That whole series of mistakes occurred in the space of about 5 to 10 seconds. Not much time to think. I was simply ruled by my emotions.

I've been working on eliminating mistakes and I'm doing pretty well. I usually finish in the top 10% in most tournaments I enter now. I used to make a lot more mistakes, and when I did, I didn't make any money. But today's mistakes probably prevented me from making two to ten times as much money as I should have, so its still very expensive.

I currently use all the tools in the Peak Performance Course to eliminate mistakes. And I'm getting better and better. I used to make 3-4 mistakes in 200 hands, and now its just 2 major mistakes in one hand. And quite often I don't make any. Perhaps soon, such mistakes will be a thing of the past.

So what's the point and how does this relate to trading? Well, it all relates to your efficiency as a trader. How many mistakes do you make and what does it cost you? Poker is a good way to look at this because 200 hands in a few hours probably is equavalent to 200 trades in terms of the opportunity to make mistakes.