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  5. Poker and Forex trading — what do they have in common?

Poker and Forex trading — what do they have in common?

Forex trading

Is forex trading a game of chance like poker? Experienced traders would certainly vehemently resist this theory at first glance. Still, the clever wealth business has more in common with a game of poker than one might initially assume, especially when we look at the real professionals in both areas who make their living from it. A look at the similarities and differences between poker and forex trading shows how similar the two can be.

Practice makes perfect

Contrary to what was initially assumed, poker itself has little to do with “luck” but is instead a clever game with many variants and rules that require a lot of strategic thinking and psychological skill.

The classic card game has hardly anything to do with illegal rounds in smoky backrooms, including the proverbial ace up your sleeve. On the contrary, thanks to poker courses, it can be adequately learned, and many websites also provide information about the various poker rules and variants. Many recognized international tournaments are similar to chess tournaments, and many poker pros have been able to turn their passion into a career.

These solid players are often not called gamblers but intelligent business people. Even those who have already clocked up more than 500 hours of play cannot count on great earnings – which is why learning and further training is always necessary.

The same goes for forex. Again, no master has fallen from the sky – entering as a newbie with a lot of money would be devastating. With $4 trillion in daily volume, the Forex market is the largest and most liquid in the world. The idea is simple: it’s just a matter of betting which currency will lose value against which and when to sell and buy cleverly. You still have to know the Forex rules and, of course, study the market in detail over a more extended period to act quickly and accurately.

Less than 10% of traders are successful over the long term – making forex no more reliable than a game of poker.

Opportunities are waiting

Another thing they have in common is that they work around the clock, regardless of where they are – whether by smartphone, tablet, or computer: Internet casinos and the forex market are open 24 hours a day, so stock market hours and international time zones hardly play a role, which in turn offers professionals the tempting opportunity to organize their everyday work very flexibly.

What is the role of luck in Forex and poker?

So how much luck is actually involved in poker and forex trading? No matter how experienced you are, the excitement and thrill in both areas come from the fact that there is always a little bit of luck involved. In poker, cunning “bluffing” can be used, which can tempt your opponent to fold even if your hand is not very good. Even the best player has no influence on which cards the other players draw and how they act. It is similar to Forex because unexpected market movements can cause surprises.

The price movements are still the result of human decisions; only a very small part of the market action can be determined from rationally determined positions based on chart formations.

But therein lies, as with poker, the fascination of the business. Profits and losses are possible at any time, but a positive balance will only result in the long term and from constant employment and clever calculations. Throwing in the towel immediately in the event of a bad luck streak would be a wrong decision.

Patience, consistency, and a cool mind unaffected by emotions are the most likely to lead to success and the desired results.

Poker pros are less likely to gamble than smart business people

Of course, it is also essential to calculate cleverly, take manageable risks, and determine the use in such a way that a corresponding success is possible, but a dangerous loss can be avoided. Anyone who has exhausted their budget too quickly or goes bankrupt in poker and Forex will learn the adverse side effects of both transactions painfully.

The forex mark is subject to significant variance, where the risk lies. If you invest 50 percent of your available capital and lose, you will surely go broke in no time, if you only invest 5% or less, you can achieve better results in the long term, albeit more slowly over time.

The same applies to poker, where there is at least as much variance. Experienced poker players know how to switch their limits cleverly. They know when to stop and decide when to play short-term with a no-limit strategy and over several rounds with a fixed-limit strategy.

Of course, these betting limits depend on personal skills, both in poker and forex and on the available budget and correct bankroll management, which should always be clearly defined in advance so as not to be tempted to make short-sighted decisions.

The psychology of forex and poker

The nervous strain can therefore be enormous in Forex trading and poker games, and rational action, independent of fluctuating feelings, must be learned over the long term. Psychology plays a significant role in the currency market – those who coolly analyze human behavior can predict market developments before they happen.

For example, a growth market will prompt investment, while an economic downturn often prompts panic selling to avoid significant losses. The same applies to poker – if a player is on scared money – i.e., money that one is afraid to invest – this can quickly be forced to give up through high bets, even if they wanted to follow suit and had a good hand. Those who observe well and keep their “poker face” can score better.

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