i recently came across an interview with Phil Ivey where he says he "doesn't care" about the $$ when the journalist asked him about how he deals with the constant stress of making/losing 6-7 figures in the span of a few hours. his comment was kind of similar to CIS/BNF's remarks about focusing on the game itself, more than the $$ per se. i guess when u amp up the size of ur bets under a kelly criterion-like approach, there's a certain point where a 10 pt move in ES could mean +/- value of a house before lunchtime, etc. but then if the the guys who win big don't really care about the money, why do u see so many of them living frugally? (ironically, on the flip side, the guys who blow out spectacularly seem to be those who lived large, stories about Jesse Livermore come to mind) so what is the most effective approach to looking at $$? not to get all theoretical with Freudian psychoanalysis and whatnot but self-sabotage comes into mind - perhaps 'not caring' about the money means that you short-circuit any potential channels for self-sabotage? then when you made it, you keep the dough under tight lockdown?
I think the key nuance is that a good trader should care deeply about open positions that are in the red, but "not worry" about about positions that are in the green. Human beings are wired the exact opposite way though - "stick it out and fight" when positions are going against them, "get scared and quickly grab profit" when positions are going in their favor.
The goal is to be as risk neutral as possible. Inherently we all have concave utility functions: large losses are worse than large gains are good. The less you "care about money" the more risk neutral you can be. As you set up your trading plan, set your expectations and risk management around staying as risk neutral as you can and you will never blow up.
The point is not to focus on the money but on the trade. Any experienced trader knows that any trade or series of trades may fail but if the trade plan is viable the key is to manage according to the plan and the money will take care of itself.
interesting way of putting it. i never thought the concavity of utility functions would ever come up again in practical discussions, lol
Another reason might be that they've seen it all before. Drawdowns are common and big losses happen as well. People get used to everything. So one trade, whether a loss or a gain does not really matter and one shouldn't really think about it much. What matters is how you did this quarter, this year and throughout your trading.
Many high limit name players should care a little more about money as hordes of them are dead broke and deep in debt. Some of the biggest names are actually playing other people's money. The percentage of broke players is far higher than most would guess if you don't count those with outside income and those who stole or cheated (and saved) a large amount.
quite a revelation...not a participant in gaming myself, but i always wondered why the poker stars don't switch to futures trading, it's always the futures traders who dabble in poker on weekends
They might if they thought they had a worthwhile edge. And the degenerates are used to other gambling vices.