Did any of you ever trade the "bund flipper"? It's fairly rare these days but if you watch closely, every once in a while during quiet markets you might notice a stack of unusually large bids or offers, e.g. 750, 750, 750, apparently attempting to spook opposing algos in to trading the same way. The trick was essentially to fade any panic, wait for the 750's to pull, and the market to likewise settle back to where it had rested before. Anyway, over the months/years I've traded a few "gimmicks" like this and made more bucks than I've lost along the way. Lately I've been thinking I might have had a bit more fun and made a bit more money had I devoted those hours to online poker (regardless of changes in US law). You see threads about people interested in moving from poker to trading, but I don't recall seeing any about going the opposite way. I'm speculating that online poker might have nourished whatever 'neurotic needs' (for lack of better term) kept me obsessing over the financial markets, and perhaps same could be said for others? * Very low barriers to entry and clearly defined stakes, allowing even a broke but dedicated learner to grind his way up the pecking order over time. - Benefit #1 - That sense of "getting somewhere" on your own, in a purely meritocratic environment. * Greater transparency in terms of who the other players are. - Benefit #2 - It's easier to play the game when you know who you're playing with. You can read all the books you want about categorizing the various financial market players and their possible motives, but you can't see this on the price ladders (can you?). I wonder if this explains why some/many former pit-traders failed to transition successfully to the screens. * Vastly larger number of "trades" to scrutinize, and instant "feel good" feedback. - Benefit #3 - It seems more credible to me when someone has made a comfortable profit over the course of 100,000 hands (which can be done in a reasonable time frame), versus someone who has backtested a trading idea (which never really captures every crucial detail of the live environment), or versus someone who bought a Moving Average crossover at the start of a bull market 5 years ago. It's also in our nature to seek out quick gratification and at least with poker you don't have to wait around long to see the outcome, and hopefully the positive reinforcement to keep going. * Clearly defined rules and fewer moving parts. - Benefit #4 - The cards in the deck don't change from one year to the next. In contrast, I believe markets do tend to undergo periodic "regime change" whereby a breakout strategy (for illustrative example only) on a particular timeframe might be wildly successful for 6 months, and dire the next. I'm not saying poker is a perfectly static game where you can just build a mechanical system and leave it to make millions, but from what I know, success in trading is much more of a moving target. * Less toxic online community - Benefit #5 - No offence but I find everything about the trading industry repulsive. Everybody seems to be either trolling, scamming or selling something. I'm not so familiar with the major poker forums but I've spent some time there and I think you'll find the average member is more open and honest about their actual experiences in the game. Just my thoughts. I'm not pushing an agenda whatsoever, just provoking some discussion is all.
Great post and explanation of what a real edge is--- compelling argument for poker also. I dont play but your post makes it seem interesting.
I would say real edges scalable enough for good living are much more common in providing something people need/want and ready to pay and say "thanks" for that. Neither poker nor trading are such occupations. Obviously it is much harder to extract money from someone who doesn't want to spare with it than from someone ready to spare with money in exchange for some other value.
Agree that most would have far better odds pursuing poker rather than trading. #2 (playing low enough stakes so that you're better than the competition) and #4 (stationarity) are key. How well it scales is another matter (although that's part of the reason it's less competitive). There's some element of #2 in trading, but with the ubiquity of hft, it's far less prevalent than it used to be.
That is a good point. I never thought of that before. In business you are taking money from people who are willingly handing it over to you. In poker and trading you are trying to take money from people who do not want to hand it over to you. Big difference! Some will say that in business there is competition from others who try and start a similar business, so you could say that those people are trying to take your customers money. So competition is still there for the money as in poker/trading, but still easier to take from people who want to give it to you versus take from people who do not want to give it to you! Surely why there exist so many successful businesses but so few successful traders or poker players.
It's an interesting point but I don't agree with it. You are thinking of trading from your own narrow perspective whereas there are a multidue of participants with entirely different objectives to you. This relates to my point #2. If you post bids or offers, you are providing a service that others will be thankful for (regardless of where the price goes in the next 10 seconds or 10 days) - you are allowing them to get in/out of a position.
re Benefit #5: the card deck might not change, but times definitely do change both in trading and in poker. the pokerhype is over, there's less stupid money and more computers. that's why poker players trying to turn trader and not the other way around. because of lower entry i'm sure it's easier to make a buck playing lower stakes poker than lower stakes trading. it's difficult to scale up though, i'm convinced it's easier to make big bucks doing high stakes trading than high stakes poker. to summarize, i'd much rather be a trader than a poker player right now.