3 Things Traders Can Learn from Poker Players

Is forex trading like poker? Ahh, this question has popped up a bunch of times in the BabyPips.com forums as many have noted several similarities between trading and the card game. For one thing, both involve playing the odds and determining your risk based on the cards you’re dealt.

With that, it can be said that the best poker players possess qualities that could translate well into the world of trading. Let’s take a look at three main things we can learn from our poker counterparts:

1. Money management

In the game of poker, a player tries to increase his bank roll by making calculated bets based on the hand he’s dealt. Similarly, in trading, your goal is to grow your initial capital by risking a part of your account on a trade.

In both cases, one has to know how much to risk in order to stay in the game. Just as going “all in” in poker can either result in a huge win or an early exit from the table, betting the farm in trading can lead to an empty trading account.

Aside from that, it’s not just a matter of knowing HOW MUCH to risk but also WHEN to play. Seasoned poker players such as Big Pippin’s all-time idol Phil Ivey are very selective with their hands, as they wait for good opportunities that they can press to their advantage.

In forex trading, you also have to know when the odds are tilted in your favor, when to add to your position, when to cut your losses, and when to stay on the sidelines.

2. Knowing who you’re up against

A professional poker player’s strategy will depend a lot on who he’s up against. For example, he will probably trade differently when he’s facing amateurs than when he’s playing against other pros.

Familiarity with one’s opponents can also give a poker player a distinct edge. Any poker player can attest that knowing your opponents’ tendencies and “tells” can give you a big advantage in poker.

Similarly, it’s important for traders like us to know the characteristics and behaviors of the markets that we trade. Why? Because these can also give us advantages in the trading arena.

Different pairs have different tendencies which should be taken into consideration as they can determine the appropriate trading approach. For instance, pairs like EUR/JPY are more volatile than pairs such as USD/JPY, and consequently, they may warrant wider stops.

3. Controlling emotions

The best poker players have mastered the art of controlling emotions because showing apprehension or excitement at the table can tip off their opponents. As such, they must take extra care to make sure they keep a straight face – hence, the term “poker face.”

As traders, we must strive to do the same. If you really think about it, to a certain extent, it’s actually easier for traders because we don’t physically have to hide our emotions. We can frown at a losing trade or jump for joy for a winning trade, just as long as we don’t let your emotions negatively affect our decision-making process.

There you have it – 3 things traders can learn from poker players. But be careful not to treat trading like gambling, folks! Remember, trading is a business more than anything!


  • HotPotato

    For me, the most noticeable comparison is that most poker/forex players start off reading a few articles/fundamental rules & techniques and automatically assume that they can come out winning and profitable. 

    There’s no such thing as easy money folks!

    Like poker, forex requires a ton of knowledge, determination and constant self-evaluation to stay on top.

  • Laughcrime

    As someone who came from a professional horse race betting background, and then from there into professional poker (online, which had both tougher competition and higher potential profitability), and now from poker into Forex, I cannot emphasize enough how much of a head start my previous skill sets have afforded me. And it’s even more confirmation for me after having experienced the very same thing when I came from horse racing into poker. (One good general example is how obvious it is what the main problems are that beset beginners in Forex.) So yeah, very good points in this article.

  • Onlinecasinosdoc

    You made a great point in this post. I just spent some time reading all your posts and I must say you are a genius who always throws out smart opinions

  • pipbiquitous

    This is true, I’m myself an ex-pokerplayer and there are quite a few ideas that are similar. Too bad people here are thinking poker is a gambling game, it’s less than you think!

  • wirabayu06

    I like the three point as u said above Dr. Pipslow..

  • TurtleForex

    I’ve always said that poker had many similarities to trading. I was a successful live and online poker player. I agree with Retro as far as risk management. I actually started trading before I began playing poker competitively. I think my trading background was the reason I picked up on poker so quickly. I play a tight-agressive poker game and pretty much trade the same way. I’ll sit and wait for my set-up then go right at it. After playing poker I was able to apply thinking in probabilities much better to my trading. So each helped me get better at the other.

  • retro

    I transitioned to Forex from playing poker profitably for 3-4 years. I really think it has given me a head start over most due to the similarities of which are mentioned above. To me poker has given me a great grasp of risk management as well as when to push an edge, and when to back off and take a small loss. Good article.

  • Dreighen

    I too being a poker player, yet new to Forex, can attest to this article being true. There’s way more than 3 though, and like one other said, poker is more a business than gambling if you know what you’re doing!

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