Ask Me About Poker

[UrmaBlume 10]

There are so many apt comparisons between poker and trading that as a long time poker player, consultant to online poker sites, published poker author, software developer and manager/director of a small trading fund, I would like to start a discussion and answer any questions I can on poker as it relates to trading as well as poker in general.

 

Today's online poker sites offer so many deals/rakebacks & specials that smart, hard working, competent players can make six figures a year just by breaking even in their play. Kind of like the volume rebates given high frequency traders - they can break even on the trades and still make a killing.

 

cheers

UB

[TheDude 10]

Can I wear sunglasses when I trade like those fat mugs who play poker on TV?

[UrmaBlume 10]

Can I wear sunglasses when I trade like those fat mugs who play poker on TV?

 

Sure you can, but if you look a little closer you will find that the best of them, the biggest winners, never wear sunglasses, the same for traders.

 

UrmaBlume

[TheDude 10]

Sure you can, but if you look a little closer you will find that the best of them, the biggest winners, never wear sunglasses, the same for traders.

 

UrmaBlume

 

haha. Makes sense when you think about it. I guess like traders, the biggest and best dont want to go anywhere near the TV or media in general.

[UrmaBlume 10]

haha. Makes sense when you think about it. I guess like traders, the biggest and best dont want to go anywhere near the TV or media in general.

 

You got it. And with traders it is even more so. So many have their funds based offshore and that's not just because of lower or no taxes.

 

For some poker players the media attention can offer them great leverage whereas the reverse is often true for a certain type of trading.

 

Do you play and what is your game and venue of choice? Even though I live in Vegas I only play online and play mostly PL Omaha H/L.

 

UrmaBlume

[TheDude 10]

To be honest, Ive only played poker once with a load of US marines in a bar in Germany. I walked off with 100x what I came to the table with. No joke. Obviously it was beginners luck!!

 

I play black jack very rarely - just for laughs, and mostly lose. I can see there is skill in these games, I just don't have the time to devote - otherwise I'd just be gambling.

[brownsfan019 17]

I got one UB - having been on both sides (poker/trading) - what do you think is the easiest to make it in? I realize that may be relative, but you asked for questions and here's one.

 

If an eager protege came up to you and said teach me, your choice, where do you start? And why?

[UrmaBlume 10]

I got one UB - having been on both sides (poker/trading) - what do you think is the easiest to make it in? I realize that may be relative, but you asked for questions and here's one.

If an eager protege came up to you and said teach me, your choice, where do you start? And why?

 

In the markets there is no ante or rake until you have a hand you want to play - in other words no cost to wait for best possible starting hand.

 

When you get the best possible starting hand in poker the other players can fold - in the markets - all market orders are filled.

 

When you have the best hand you can raise, can even raise yourself with more market orders and your opponent can never fold and must always call. Not so in poker.

 

With stops you never lose the whole pot, can protect gains and not so in poker.

 

Maybe best of all is that if you go to the Bellagio to play it takes a certain level of skill to beat the $1 - $2 game but it takes another whole level of skill to beat the $1,000 - $2,000 game but in very liquid markets like ES the skill required to bet the market with a 2 lot can beat it with a 100 lot.

 

While rates of success for both are about the same, in the markets your opponent can never fold, never bet and never raise you - in poker your opponent can do all of that including bluffs.

 

In poker it is really tough to find/play the really big games but in the markets - any size you want is available 24/7 to anybody who cares to step up.

 

Both are great opportunities because anybody can play for almost any stakes and you don't need a license, permission or be member of a club to play either.

 

One aspect of online poker that resembles the markets is that if your size/frequency is big enough you can, through rebates, make a lot of money even if your play is only break-even.

 

For our traders we teach both and are not much interested in those who don't enjoy the challenges of both.

 

All of our trader enjoy and play both. As I have been outed as the author and the cover posted elsewhere in this forum you can see on the back cover of my book how we value poker skills in our traders.

 

Browns - the short answer to your question is that I think the markets are easier than poker, I wouldn't teach the protoge either, I would teach both because the skills of each compliment the other.

 

 

cheers

 

UrmaBlume

[UrmaBlume 10]

I normally play on PokerStars but this weekend I opened an account at Full Tilt to test their new Rush Poker.

 

In a fast online game you will get around 70 hands per hour. In rush poker you get 200 or more hands per hour. They have it set up so that everybody is in that particular game is in a pool and as soon as you fold you are seated at another table and another hand begins.

 

Besides lots of action, the speed very quickly exposes any weaknesses in your game. As in trading a high number of trades/hands quickly demonstrates a normalized result.

 

I believe that it is gimmicks like this that allow players to see so many hands in such a short period of time that the 20 somethings that really have it together are able to quickly gain the experience that enables them to beat the old pros so often.

 

Online poker is the nuts. You can learn in free games or for stakes as low as nickle/dime all the way up to nose-bleed stakes. While I have done some consulting for some of these sites in the past, I have no affiliation with any of them and would be happy to help any TLers get started.

 

Even though I live in Vegas I only play online because every day there is unlimited money up for grabs, the competition is mostly weaker than in the Vegas cardrooms, you can change games/poker rooms with a click, you can play in as many games and tournaments at the same time as you can handle and you never have to tip the dealer.

 

cheers

 

UB

[brownsfan019 17]

Interesting comments UB. I've always loved poker, but have not taken it much further than a hobby I really enjoy. I was surprised by playing only online when you are right in Vegas, but you highlighted some reasons for it. I like playing live from the standpoint of seeing people's reactions, talk, etc.

 

I haven't tried rush poker out yet either but could be a great way to see a lot of hands quickly it sounds like. Wonder if some guys are multi-tabling rush?

[UrmaBlume 10]

Interesting comments UB. I've always loved poker, but have not taken it much further than a hobby I really enjoy. I was surprised by playing only online when you are right in Vegas, but you highlighted some reasons for it. I like playing live from the standpoint of seeing people's reactions, talk, etc. I haven't tried rush poker out yet either but could be a great way to see a lot of hands quickly it sounds like. Wonder if some guys are multi-tabling rush?

 

Successful Rush Poker players have developed algorithms/systems for successful play to the point where they play rush very selectively and very aggressively. They base their actions on their cards and the actions of their opponents.

 

As to multi-tabling Rush Poker, Yes the best play 4 Rush tables all day long - getting as many as 800 hands per hour. Rush Poker is to poker as High Frequency Trading (HFT) is to the markets except that the volume rebate is higher in poker than it is in the markets because in poker you collect rake back for every hand even if you commit nothing to the pot.

 

In poker with an account the same size as what would make a minimal starting account for a beginning futures trader, a very successful player can earn low six figures a year even if he only breaks even in his play from rake back and other rewards for high volume play.

 

The best of these guys sit in front on multi-monitor setups and play in as many as 4 Rush Tables or more than 20 standard tables. If a future trader breaks even in his trades he is still down commission. If these poker players play enough hands and break even in their play they still take home a couple of hundred thousand dollars per year.

 

I have done some consulting for one of the biggest online sites and have written a successful book on the odds, probabilities and advanced game theory in Holdem and Omaha H/L and have learned that about the same percentage of players succeed in poker as succeed in futures trading and that the characteristics of methods and understanding are much the same for both groups.

 

One point that makes the markets harder for the uninitiated is that it is harder to calculate both pot odds and implied odds and one point that makes trading a lot easier is that when you have a great hand there is always someone to call your bet no matter how large.

 

In poker if you make a huge hand and place an all-in (market order) bet, you only win money if someone calls. In the market if you hold the nuts and make a market order you will always be called.

 

Information = Equity

 

Another big difference is that the money earned by the most successful poker players including endorsement, books, etc., is chump change compared to what is earned by the most successful traders.

 

There are more than a few successful traders that play successful poker but very few successful poker players that have migrated to the markets. I think the best new hire for a trading operation with stronger than average trade decision support technologies is a successful poker player, unafraid of technology and willing to learn and who has never traded anything.

 

 

cheers

 

UrmaBlume

[Mysticforex 13]

When I was in High School, quite some time ago, I played a bit of Poker. I always did well enough to have a bit of extra spending money. It sure beat a part time job of delivering groceries at the local grocer. My game of choice was 7 Card Stud, something you don't see as often as you used too. I guess it was replaced in popularity by Texas Hold Em.

 

But anyway, here's my question. It may seem trivial, but if you don't ask you'll never know. Now my Poker playing is limited to the preloaded game of Texas Hold Em that came on my Blackberry. There is a Blue Chip that is rotated to each player when a new hand starts. What is that???

[UrmaBlume 10]

When I was in High School, quite some time ago, I played a bit of Poker. I always did well enough to have a bit of extra spending money. It sure beat a part time job of delivering groceries at the local grocer. My game of choice was 7 Card Stud, something you don't see as often as you used too. I guess it was replaced in popularity by Texas Hold Em. But anyway, here's my question. It may seem trivial, but if you don't ask you'll never know. Now my Poker playing is limited to the preloaded game of Texas Hold Em that came on my Blackberry. There is a Blue Chip that is rotated to each player when a new hand starts. What is that???

 

It is called the Dealer Button. The deal rotates around the table and the button designates who the dealer is for that hand. Cards are dealt and bets are placed beginning with the first place to the left of the dealer. The rotation negates constant positional advantage by any one player over the other.

 

There is really not more than procedure that can be learned from play money games. The good news is that most of the major online sites offer stakes as low as nickel/dime and lower for beginners with baby bankrolls.

 

One young lady from Scandinavia named Annette started with these uber low stakes games and over the last few years has won millions in the big buy-in tournament circuit.

 

Twenty plus years ago I played professionally. These days I am a recreational low stakes player. All of my play is online. I play at Poker Stars and Full Tilt, play mostly Pot and No-Limit Omaha H/L tournaments except for the Rush tables at Full Tilt and am usually in the company of Jose Cuervo when I play.

 

Acquiring expertise in poker is a great way to develop an instinct for risk/reward and odds based positive or negative expectation.

 

cheers

 

UB

[UrmaBlume 10]

Below is a results page from one of the small stakes tournaments I play several times a week. This took pace a week ago on 2/10/2011

 

From the screen capture you can see that there were 857 entrants, entry fee was $5.50 and UrmaBlume won $985.55 for first place. The tournament took 6 hours and boy was I shitfaced by the the time it was over.

 

These small stakes tournaments are great entertainment, you can't get hurt financially and sometimes you get lucky and win a few bucks.

 

 

 

 

cheers

 

UrmaBlume

[MightyMouse 12]

Successful Rush Poker players have developed algorithms/systems for successful play to the point where they play rush very selectively and very aggressively. They base their actions on their cards and the actions of their opponents.

 

As to multi-tabling Rush Poker, Yes the best play 4 Rush tables all day long - getting as many as 800 hands per hour. Rush Poker is to poker as High Frequency Trading (HFT) is to the markets except that the volume rebate is higher in poker than it is in the markets because in poker you collect rake back for every hand even if you commit nothing to the pot.

 

In poker with an account the same size as what would make a minimal starting account for a beginning futures trader, a very successful player can earn low six figures a year even if he only breaks even in his play from rake back and other rewards for high volume play.

 

The best of these guys sit in front on multi-monitor setups and play in as many as 4 Rush Tables or more than 20 standard tables. If a future trader breaks even in his trades he is still down commission. If these poker players play enough hands and break even in their play they still take home a couple of hundred thousand dollars per year.

 

I have done some consulting for one of the biggest online sites and have written a successful book on the odds, probabilities and advanced game theory in Holdem and Omaha H/L and have learned that about the same percentage of players succeed in poker as succeed in futures trading and that the characteristics of methods and understanding are much the same for both groups.

 

One point that makes the markets harder for the uninitiated is that it is harder to calculate both pot odds and implied odds and one point that makes trading a lot easier is that when you have a great hand there is always someone to call your bet no matter how large.

 

In poker if you make a huge hand and place an all-in (market order) bet, you only win money if someone calls. In the market if you hold the nuts and make a market order you will always be called.

 

Information = Equity

 

Another big difference is that the money earned by the most successful poker players including endorsement, books, etc., is chump change compared to what is earned by the most successful traders.

 

There are more than a few successful traders that play successful poker but very few successful poker players that have migrated to the markets. I think the best new hire for a trading operation with stronger than average trade decision support technologies is a successful poker player, unafraid of technology and willing to learn and who has never traded anything.

 

 

cheers

 

UrmaBlume

 

A very large difference between hold'em and trading is that in poker there are times either at the river or earlier when you know for certain that you have the nuts. Your job at that point is to make sure you extract as much as you can from that table. In trading you are never afforded such a luxury. There is never, ever a certainty unless you have inside information which a lot of traders do. Unfortunately, I do not.

[UrmaBlume 10]

A very large difference between hold'em and trading is that in poker there are times either at the river or earlier when you know for certain that you have the nuts. Your job at that point is to make sure you extract as much as you can from that table. In trading you are never afforded such a luxury. There is never, ever a certainty unless you have inside information which a lot of traders do. Unfortunately, I do not.

 

What you miss here is that expert practitioners can often posses technical information that equals inside information or a nut poker holding.

 

The issue with many traders is the inability to calculate hand ranking, pot odds and/or implied odds as relates to their entry price, trade location, time frame, method, expectation and risk metrics.

 

UrmaBlume

[MightyMouse 12]

What you miss here is that expert practitioners can often posses technical information that equals inside information or a nut poker holding.

 

The issue with many traders is the inability to calculate hand ranking, pot odds and/or implied odds as relates to their entry price, trade location, time frame, method, expectation and risk metrics.

 

UrmaBlume

 

I will restate what I said earlier. No one can ever, ever know with certainty what the outcome will be in trading unless you are trading with inside information. A lot of times, inside information gives you what the bias should be, but you may not make money trading it. All the slicing and dicing of technical data will help at a cost, but it will never, ever give you the comp to the nuts in poker.

[GlassOnion 12]

I have only played computers. When playing "Live" opponents, do some people really go "All In" just knowing their 2 hole cards? If so, what's the idea behind that. I'am not talking about someone with nothing to lose ( cause they already lost it ), I mean players that still have a decent stake.

[UrmaBlume 10]

I have only played computers. When playing "Live" opponents, do some people really go "All In" just knowing their 2 hole cards? If so, what's the idea behind that. I'am not talking about someone with nothing to lose ( cause they already lost it ), I mean players that still have a decent stake.

 

In Holdem there are four rounds of betting and a player can go all in on any of them. Certainly there are situations of positive expectation to go in before the flop (with just your hole cards) and certainly there are many, many situations where there might be a positive expectation to go all in on subsequent rounds.

 

An example of positive expectation to go all in with just hole cards is if you are on the button with pocket aces and everybody has folded to you, leaving only the blinds. While this move carries a big positive expectation long run it is probably not the optimal play.

 

may the flop be with you

 

UrmaBlume

[UrmaBlume 10]

I will restate what I said earlier. No one can ever, ever know with certainty what the outcome will be in trading unless you are trading with inside information. A lot of times, inside information gives you what the bias should be, but you may not make money trading it. All the slicing and dicing of technical data will help at a cost, but it will never, ever give you the comp to the nuts in poker.

 

Don't forget that there are situations in poker where you can hold the absolute best possible hand and still lose money. In Omaha H/L you can hold either the best possible high or low hand and if another player holds the same hand you can be "quartered" or worse and lose money in the hand.

 

In trading there are indeed certain situations where you are guaranteed a win with even greater certainty than inside information. Two are described below.

 

As you say even inside information doesn't work all the time and I know of no technical indicator for spec trades that does either, however there are some that work with very high rates of success.

 

On the other hand there are certain trading situations involving premium arbitrage where you absolutely know not only that you will win but exactly how much you will win. Two such situations are:

 

1. Long S&P basket, short the future with big premium - will capture without risk the premium and any dividends in the stocks during the hold period.

 

2. Options Conversion - Long Stock, Short Call, Long put - captures without risk the difference between the call premium and put premium plus any dividend.

 

In poker and in trading it always holds true that:

 

Information = Equity

 

At the poker table everybody can see the community cards, the money in the pot, the size of the other players' stacks and can see the actions and reactions of their opponents. The player who best processes that raw data is the favorite. The same is true with the markets.

 

UrmaBlume

Edited February 18, 2011 by UrmaBlume

[MightyMouse 12]

Don't forget that there are situations in poker where you can hold the absolute best possible hand and still lose money. In Omaha H/L you can hold either the best possible high or low hand and if another player holds the same hand you can be "quartered" or worse and lose money in the hand.

 

In trading there are indeed certain situations where you are guaranteed a win with even greater certainty than inside information. Two are described below.

 

As you say even inside information doesn't work all the time and I know of no technical indicator for spec trades that does either, however there are some that work with very high rates of success.

 

On the other hand there are certain trading situations involving premium arbitrage where you absolutely know not only that you will win but exactly how much you will win. Two such situations are:

 

1. Long S&P basket, short the future with big premium - will capture without risk the premium and any dividends in the stocks during the hold period.

 

2. Options Conversion - Long Stock, Short Call, Long put - captures without risk the difference between the call premium and put premium plus any dividend.

 

In poker and in trading it always holds true that:

 

Information = Equity

 

At the poker table everybody can see the community cards, the money in the pot, the size of the other players' stacks and can see the actions and reactions of their opponents. The player who best processes that raw data is the favorite. The same is true with the markets.

 

UrmaBlume

 

True, with arbitrage you can be guaranteed a gain. The gain is generally, lower than the at risk gain but higher than the guaranteed rate of return, eg. treasuries. However, at that point the gain is fixed and you cannot go all in. In poker you can either go all if you have the nuts or if your opponent is aggressive and trying to buy the pot, check and let him make an all in or large bet trying to scare you out of the pot when you have the nuts.

 

On the other hand, there is a lot of bluffing in the market as there is in no limit.

[brownsfan019 17]

Very cool discussion guys. I've always enjoyed chatting about poker. I don't get to play nearly as much as I'd like, but it's always a good time.

 

Also, nice job UB on that tourney! I've played a few that can last so many hours, it's a real grind at times that's for sure.

[iznogoud 10]

As a poker player you must feel slightly pained whenever someone calls you UB (aka superuser site).

 

I come from a poker background too, played 6-max 200nl at my peak but had to withdraw to pay for school and by this i mean beer money.

 

Do you reckon top online players like durrrr, jungleman, nutsinho and co. could transition quickly to trading and make insane returns like they do in poker? or would they struggle with some parts of trading?

[UrmaBlume 10]

As a poker player you must feel slightly pained whenever someone calls you UB (aka superuser site).I come from a poker background too, played 6-max 200nl at my peak but had to withdraw to pay for school and by this i mean beer money.

Do you reckon top online players like durrrr, jungleman, nutsinho and co. could transition quickly to trading and make insane returns like they do in poker? or would they struggle with some parts of trading?

 

Certainly they have the mind for it.

 

I think it would boil down to a matter of tools and training.

 

Given the right tools and training there are several dynamics that make intra-session trading easier than poker and certainly it can be a much bigger game.

 

In the markets, unlike in poker, someone will always call when you have the nut hand, you can bet any amount and always be called and if the circumstances warrant you can even raise yourself and still be called. In addition you can always protect your pot equity and are almost never all in.

 

Also, unlike poker, the game doesn't get tougher as you move up in stakes. If fact because of reduced juice etc it actually gets easier as you trade higher.

 

cheers

 

UrmaBlume

[MightyMouse 12]

Certainly they have the mind for it.

 

I think it would boil down to a matter of tools and training.

 

Given the right tools and training there are several dynamics that make intra-session trading easier than poker and certainly it can be a much bigger game.

 

In the markets, unlike in poker, someone will always call when you have the nut hand, you can bet any amount and always be called and if the circumstances warrant you can even raise yourself and still be called. In addition you can always protect your pot equity and are almost never all in.

 

Also, unlike poker, the game doesn't get tougher as you move up in stakes. If fact because of reduced juice etc it actually gets easier as you trade higher.

 

cheers

 

UrmaBlume

 

Are you serious? Of course trading gets tougher when you scale up. if you put up 1000 instead of 1, It's harder to get filled on limit orders and if you get do filled it will push through you further was well. Which means that traders who are willing to take your order feel pretty confident that they can make you cough it up at a loss. Your market orders will also be filled over a range of prices instead of at one price, making profitability more of a challenge.

 

You, therefore, need completely different entry and exit strategies than you would use if you traded ones and twos.

 

I trade oil and have traded as high as 16 contracts and getting out is a chore and absolutely not the same when compared to getting out with 2.

 

MM