There are many similarities between share market and poker. Some aspects of share market can be replicated in the poker felt and can help a player to become a better one.
1. Volatility in Stock Market and Variance in Poker
In share market volatility means the degree of changes in the price of financial assets. Sometimes the investor makes a good decision after a thorough study but due to various factors their thesis fails and they end up in losses instead of profit. However, the fact is, that continuous good decisions will eventually lead to good profits in a long run like in depth research of the company that you are investing on.
Same way variance is the bug in poker. This is the difference between real and expectation. An essential tip for poker card game is to “lower the variance which means that the player is closer to expectation” and vice versa. We all know luck factor is a major variable of the game of poker. So, the player should analyze the game properly to make good decisions as it will be profitable in the long run and balance the variance.
2. Risk Management
In Share Market the investor analyzes his risk. Risk management leads to good return on investment and a good investor knows how to maximize his returns. When the market is down, for instance, the investor acts wisely by holding back in order to cut down losses.
Same way one of the practical tips to win in poker is that the poker player should analyze his risk and focus on better profits. The player should know when to hold or drop his cards to minimize his losses. The player should understand his opponent’s cards and his moves. They both should realize that there is always another better opportunity to make a bigger bet.
3. Emotional Control & Panic Control
The share market is full of fluctuation in prices, which leads to emotional distress. A frequent loss increases the frustration level and thereby forces the person to make poor decisions and in some cases even leave the market. An investor while purchasing shares does relevant research and conclusive analysis of a company and at the same time he is also prepared for the risk of financial fluctuation.
Similarly, in the game of poker the player should be prepared for losses. Due to a stretch of bad bets the player may be suffering and it could be affecting his decision making ability. He might lose hope of winning. At times because of the continuous failure the player starts thinking irrationally and acts impulsively. In this dangerous stage the player should take a break and be emotionally stable then start the game afresh.
To be successful in any field there are no shortcuts. A lot of time and effort is required to be a winner in the game of poker or as an investor in share market. Even after spending years in a particular field you tend to make mistakes but you still need to work hard and learn from those mistakes. With your seriousness and passion this precious experience will lead to your desired goals.