Trading in the foreign currency exchange market has quite a lot of similarities with playing poker. But before you start developing the wrong impression that I am putting foreign currency exchange on the same league as the game of poker, let me tell you outright that this is far from it. This is about the discipline and the mind that ideally everyone who dips his fingers on forex trading should have in order to be successful. It is just unfortunate that these winning traits happen to be the very mind set and the same rigid self-discipline possessed by all of the most successful professional poker players.
So what should be the outlook of a successful poker player every forex trader (novice or professional alike) must try to be like?
Like the foreign currency exchange market, poker is rife with uncertainties and constantly cloaked with extreme unpredictability. The successful professional poker player has accepted this early on as part of the reality of his existence. He knows too well that he will not always be able to win all the time and he has prepared himself to take losses in a stride. He knows that the more important thing is to win the bigger hands and that he needs to cut his losses fast so that he gets to play another day until the bigger winning hand comes along.
The forex trading is a volatile market as poker. As with a poker player, a trader must primarily understand that losses are inevitable. This is why it is very vital to maintain the same level of concentration and self-control even as the market does not turn to his favor.
A professional poker player must be someone who is always willing to view things at a bigger picture without bothering too much about individual sessions. He care less for short term results, would not lift a finger running after a sum of money that was already lost, would not quit when behind, and making sudden adjustments to his game. He realizes that the very thing that matters the most is by making sound decisions. He is well aware that the moment right decisions are made, the actual result of a particular session would be immaterial because he knows that he will most definitely be the victor in the long term.
In a similar assessment, I have been witness to many forex traders who would usually yield to losing trades and then make a sudden drastic plan in their game plan by lingering too much on the bad trade too long a time.
A professional one does not “play scared”. He is never scared of losing the money in front of him and always sits on the table only with the sum he is willing and prepared to lose. He knows that if he plays with “scared money”, it will only make things difficult to make sound decisions. Same goes with a forex trader. He must not bet and play on something he knew his pocket could not afford. He should only invest on a part of his ‘risk capital’ – or that part if lost, will not have a bearing on his and his family’s accustomed lifestyle.
A professional poker player does not allow emotions to get in the way. He will not call bets or get into something he is not sure of just because he doesn’t want the feeling of being pushed around. He will not call bets for the sake of impressing his rivals nor let personal disputes and feud to cloud or overrule his judgment. He is completely aware that anger and frustration has the possibility of turning players to play crazy and start spewing chips.
Similar to playing the game of poker, trading the foreign currency exchange can be very emotional. But like the professional poker player, a forex trader must be taught not to allow ego and emotions to mess up with his decisions.