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Professional poker player transitioning to day trading - please advise
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Professional poker player transitioning to day trading - please advise

  #1 (permalink)
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Professional poker player transitioning to day trading - please advise

Hi,
This is quite long post describing my situation in detail, but if you'd like a shorter version there are cliffs at the end.


Introduction
I am 29 and I have been a successful professional poker player for the past 8 years. During last couple years on-line poker has been slowly dying, with the last nail to the coffin a couple weeks ago being this: ugh, can't post links, anyway on-line poker is close to dried up
So after some careful consideration I decided to change my craft and become a day trader. I treat this plan seriously and I want to commit to learning day trading full time for at least a year/two (hopefully longer if I start to become successful). I have savings from poker and I can live comfortably on them for a couple years.


My skills & approach
I have always been big on mental game, even worked with a sport psychologist, so this part is going to be my strong side.
A lot of skills transition well from poker to trading. For years I have been exposed to money management (called bankroll management there) and huge money swings. I had to learn to focus on process oriented goals, to not care about short term results, as they don't determine if you are a good or bad player, etc. I am exceptionally aware of the randomness in the world and importance of distinguishing luck from skill, even though sometimes it is extremely tough (one of my favorite non-fiction books is Mlodinov's "Drunkard's Walk: How Randomness Rules Our Lives").
I am aware this whole thing is not gonna be a cake walk. I am willing to put in the hard work and the hours. Fortunately this is not an issue. I enjoy learning and devising new systems/algorithms (I have a master's degree in IT and my absolute favorite non-fiction book is Hofstadter's "Gödel, Escher, Bach").


What am I interested in
I have spent last two weeks browsing basics and methods. Starting at futures.io (formerly BMT) sticky posts and then going through links / googling key phrases, I went through quite a few articles and videos.
My instinct is that:
– I want to day trade, most likely futures (starting with paper trading, then micros), and do something in a range of 1 to 20 trades a day (depending on if I go scalping or not). I am not interested in swing trading or any other form of longer term investing.
– I want something that is based on how the game is fundamentally played (people wanting to push the price up vs people wanting to push the price down). I am not looking for any fancy indicator, system or any other non-existent golden grail. I want to learn to simply look at market in the now (be it by price/volume, order flow or whatever) and extract information from that.
Up until now my attention was caught mostly by:
– Order Flow / Order Book (inspired by futures.io (formerly BMT) webinars by John Grady and Ferran Ramentol, especially the first one as he exactly describes trading as a game there),
Volume Profile (FT71 materials here at futures.io (formerly BMT) are exceptional, though they mostly describe it just as a way of presenting information, so I'd also be looking for something that tells a bit more about how to use it to actually make a trading decision)
- Price Action (Al Brooks and his books / course, his materials seem very thorough, but the whole approach seems a bit lacking for me, as just price chart does not show what happened inside the candlesticks and what is the state of the market).
Obviously the above are just some blind guesses by a newbie :P


So the question is..
I have come to futures.io (formerly BMT) as it reminds me of 2+2 poker forum a few years ago – a community with open and helpful atmosphere and I'm looking forward to learning and posting here.
Right now I want to ask for an advice on how to proceed. Which method would you advise me to learn and how should I learn it (where to get the right materials)? I don't mind spending some money on a paid course / training program, but I'd rather not, as I assume most of them are snake-oil scams. And while loosing a little money is not a big problem, wasting time and even worse cluttering your brain by learning loosing strategies is.


I am open and listening
Grasiu



tl;dr cliffs:
- pro poker player for last 8 years wanting to transition to day trading
- plan to commit to it full-time for two years (longer if succeeding), while living on savings
- a bit lost in the overabundance of information, so please advise on what/how should I learn
- don't mind spending some money on courses/etc, but quite afraid of snake-oils and learning loosing strategies
- after first two-week glance mostly considering Order Flow, Volume Profile, or Price Action to trade micro futures, but feel free to suggest other things


Last edited by grasiu; November 18th, 2014 at 08:42 PM.
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  #3 (permalink)
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grasiu View Post


My skills & approach
I have always been big on mental game, even worked with a sport psychologist, so this part is going to be my strong side.
A lot of skills transition well from poker to trading. For years I have been exposed to money management (called bankroll management there) and huge money swings. I had to learn to focus on process oriented goals, to not care about short term results, as they don't determine if you are a good or bad player, etc. I am exceptionally aware of the randomness in the world and importance of distinguishing luck from skill, even though sometimes it is extremely tough (one of my favorite non-fiction books is Mlodinov's "Drunkard's Walk: How Randomness Rules Our Lives").

First of all, I am not being negative here though you might think so.

**************************
your post reminds me a lot of me when I was trying to get a job as a salesman of scientific instruments. I had a lot of qualifications... 2 degrees one of which was a BSc. Hons, another a Cert of Ed (back then you did not need a complete degree to be a teacher). I was a good chemist and participated in numerous demonstrations, able to talk at the PHd level or common man in explaining techniques, I was a teacher for a short period of time so seminar work was no problem... I wanted to combine these talents and be an industrial salesman of scientific instruments.

I always reached the second interview....never won the job. There was one question I could not answer

" What makes you think you can be a salesman"

I pointed to my education and experience and said that I felt that was transferable to being a salesman...

the answer was always the same.

"Sir, we understand your strong technical background. You would not be in this final interview without such a background. BUT.... what makes you think you can sell???"

I thought that was a horribly unfair question back the.... internally I am screaming "like man!!! give me a freaking chance... every one has to start somewhere!!!"

Eventually I did become such a salesman and became a Sales manager as well over 15 years. But I started selling vacuum cleaners door to door first as I realized I needed sales experience...successful experience to prove I had the right stuff.

****************************

I think you have many qualities for being a trader.... you do know don't you that 90% of new day traders blow their accounts in the first year. Usually IMHO because that did not learn the craft before diving in.

You should be very good at looking for "tells" as a poker player. Well the "tells" are there in trading too... it is called reading charts and there are many ways to skin that cat. Every successful chartist goes beyond the simple guidelines that are put into books. They develop a charting system and that takes time to do it properly. I am a chartist myself and I am here to tell you that it took me 10 years to figure things out before I did this full time and I am still modifying my approach today 10 years later.

If it were easy to learn ALL traders would be successful. Would I make a good day-trader??? Maybe, my tools have a chance of being modified to be adaptable to day trading but they are designed for swing/long term trading....you only have to follow my journal to see that long term trading can be successful and exciting.

It is not simply buy something and forget about it for months/years...not if you want to be successful at it. but you can afford to take time off and not worry about your investment going to wallpaper because you did not close out your trade before the end of the trading day.

But I suppose you want the "action" of the table in stocks so your desire to be a day trader. There are different skills required to be a successful day trader.

1. You must develop the ability to identify stocks that are going to be volatile on the day you want to follow them..... not an easy task if it is stocks.

2. this is not a important if you are following commodities trading or forex. Your problem there is a charting one. You must be able to identify the tells in the charts that show you it will rise or fall. Then you must identify when you want to get out of that trade....just as difficult.... so much so that day traders often just set a % target and bail out when/if it hits that target. they may leave money on the table or never reach that target if it turns around ... you must figure out when to hold or fold

3. You must have good money management skills...especially if your charting skills are weak. This allows you to try many trades and accept losses (small) along with profits (higher) for your given poke.

As far as advising you on where to start.

1. There are no unbiased training programs on how to be a successful trader. There are such courses but most are designed to get you as a client for their method/service. My advice is to forget any course that guarantees you will be a successful trader....

2. follow a selection of journal threads on this website. You will find many styles of trading here...sort out those that are interesting to you and ask questions. BM runs a pretty tight ship here and there are many useful journals you can follow.

3. Don't decide your trading style and arena until you understand what it is all about.

4. Try paper trading first to get the hang of things and to test your methods. I am not a fan of simulation trading on the internet. I was on one recently just to see what it was all about and the chart was a real chart to start though not identified...you decided whether to buy or short and then each interval you were asked whether you would continue....buy more....cover short or hold.... fine until you realize that the next interval was a random number...How real is that???

Simply decide what you are going to trade by using real charts/sources. Manually enter your trades into excel and follow the REAL charts and make your decisions and record them in EXCEL.

You often hear of newbies who make fantastic gains in simulation but cannot do it in real life... Of course there is a psychological component here as in live they are playing with real money...no pressure in simulation.

5. In summary, spend the time to read books on the subject, try ideas in simulation, and develop your trading method...whatever it may be. Then when you are comfortable...find a broker and make some test trades for real and see how it goes.

If you do it properly, you will be learning for years to come

Good luck

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  #4 (permalink)
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Thanks for that reply Underexposed. As the skills part goes, I am aware, that I don't have any guarantees and that you gain skills to trade from trading (duh).
I mostly wrote all this to get more tailored advice. I know nobody is gonna decide for me, but it might be easier for someone to give a suggestion, if they have an idea of my previous experience.




Underexposed View Post
3. Don't decide your trading style and arena until you understand what it is all about.

4. Try paper trading first to get the hang of things and to test your methods. I am not a fan of simulation trading on the internet. I was on one recently just to see what it was all about and the chart was a real chart to start though not identified...you decided whether to buy or short and then each interval you were asked whether you would continue....buy more....cover short or hold.... fine until you realize that the next interval was a random number...How real is that???

Simply decide what you are going to trade by using real charts/sources. Manually enter your trades into excel and follow the REAL charts and make your decisions and record them in EXCEL.

You often hear of newbies who make fantastic gains in simulation but cannot do it in real life... Of course there is a psychological component here as in live they are playing with real money...no pressure in simulation.

5. In summary, spend the time to read books on the subject, try ideas in simulation, and develop your trading method...whatever it may be. Then when you are comfortable...find a broker and make some test trades for real and see how it goes.

I definitely want to start paper trading. I just seem to have no starting handle to do it. Just opening a chart, looking at it (not knowing what to look for) and deciding on my intuition to go long/short seems like fortune telling from tea leafs..

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  #5 (permalink)
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@grasiu
I suggest you start by reading / watching stuff by Mark Douglas.
He focuses on the mental game in many of his works.
Dr. Brent Steenbarger has some good insights into the mental side of trading:
TraderFeed

I suggest as a poker player you will likely benefit from a tape or DOM reading method.
It is important to develop your own system and don't copy someone else.
Choose to be either a swing trader, scalper or long term trader.
(Choose ONE)

I am partial to reading price action on systems like Jigsaw or 9G.
(I use the 9G Dom and love the way it works and can be customized)
A demo (community edition) is available to try it out.
9G Trading

Jigsaw trading is also and excellent tool to consider
Jigsaw Trading - Day Trading tools, day trading methods,day trading community

There are a lot of youtube videos on using these tools.

First thing... learn to take a stop.
Always plan your trade:
An entry...
A target...
A stop...
NO EXCEPTIONS.
(Some will disagree with this but it is wise to consider trading this way)

Above all: DON'T BUY a 'system'. There are lots of 'holy grail' systems that are just snake oil.
Spend your $$ trading don't buy anything until you develop an edge of your own by sim trading.
Ninjatrader has a free version that you can use to practice. You will need a brokerage account to trade realtime but there are many of those to choose from.

You will need to become an elite member to get full benefit of futures.io (formerly BMT) but it is well worth the cost.

If you want some links on futures.io (formerly BMT) here are a few to get you started:

https://futures.io/beginners-introductions/33906-complete-beginner-no-idea-where-start.html

https://futures.io/traders-hideout/33598-webinar-futurestrader71-ft71-morad-askar-getting-started-scalping.html

https://futures.io/elite-circle/11125-ask-any-trading-question.html

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Knowing it's not about Clouds or Wind. . .
But Learning to Dance in the Rain ! ! !
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grasiu View Post
Thanks for that reply Underexposed. As the skills part goes, I am aware, that I don't have any guarantees and that you gain skills to trade from trading (duh).
I mostly wrote all this to get more tailored advice. I know nobody is gonna decide for me, but it might be easier for someone to give a suggestion, if they have an idea of my previous experience.

I definitely want to start paper trading. I just seem to have no starting handle to do it. Just opening a chart, looking at it (not knowing what to look for) and deciding on my intuition to go long/short seems like fortune telling from tea leafs..



@grasiu, below's a link to a post I made for another poker player the other day. Dough says they were a sponsor of WSOP (don't know myself, am not a poker player), regardless, I think for starters their way of going about things might appeal to you. And whether that arena was IT or not, I could see it being a foundation place to start, and a dialogue with those there might lead you to more suitable variations. Google Tom Sosnoff if curious about him. There is such a huge supermarket of threads and choices on futures.io (formerly BMT). Too, if interested, maybe a search on futures.io (formerly BMT) could connect you with other poker players who have posted here.

https://futures.io/beginners-introductions/33906-complete-beginner-no-idea-where-start-2.html#post452682

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DavidHP View Post
@grasiuYou will need to become an elite member to get full benefit of futures.io (formerly BMT) but it is well worth the cost.

If you want some links on futures.io (formerly BMT) here are a few to get you started: (3 links)

Already went through first two (actually I read all futures.io (formerly BMT) threads that had word 'poker' in it :P). The last one is on my to-read list, I will get elite futures.io (formerly BMT) membership in next couple days.




casey44 View Post
@grasiu, below's a link to a post I made for another poker player the other day. Dough says they were a sponsor of WSOP (don't know myself, am not a poker player), regardless, I think for starters their way of going about things might appeal to you. And whether that arena was IT or not, I could see it being a foundation place to start, and a dialogue with those there might lead you to more suitable variations. Google Tom Sosnoff if curious about him. There is such a huge supermarket of threads and choices on futures.io (formerly BMT). Too, if interested, maybe a search on futures.io (formerly BMT) could connect you with other poker players who have posted here.

Yeah, I heard about dough.com. Actually one of their traders is a friend of mine. I keep it as an option, but I want to look more broad then just products that target poker players.




DavidHP View Post
It is important to develop your own system and don't copy someone else.

This is what I keep hearing a lot. The thing is I have a little issue with that statement.
I know, that I have to understand what am I doing by myself, not just try to copy someone else's trades (what FT71 describes in webinars as tip of the iceberg - below the decision there is A LOT more going on, why the decision was taken). But I would like to learn, at least at the beginning, the way of thinking from someone more experienced (the stuff below the tip of the iceberg, then I can come up with the tip myself ).
"Developing your own system", when you are a newbie, sounds like a road to disaster. Imagine if a newbie doctor was told to "develop his own system" of doing a heart surgery, instead of learning it from someone more experienced..

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  #8 (permalink)
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Transitioning from Poker to Trading

I was making a majority of my income from poker for several years, as well as being on a international blackjack team. This was about 5-6 years ago though, just to put it in perspective. I made this transition myself from cards to trading. There are a lot of pluses from being a pro card player. The skills that separate a fish to the sharks at the table are the same mistakes beginning traders make when they blow out or let a veteran survive. Trading is a lot like ONLINE poker more than live, no live reads, no direct opponent, and most of the volume is done by machines so no guy at seat 3 to analyse.

A few of the skills that will make the transition easier:
- The PROFITABLE gamblers mindset (Thinking about +/-EV and understanding you only have a % edge. Nothing is guaranteed, bad beats happen)
- Understanding Risk of Ruin and bet sizing (this is basically money management 101, same applies to trading)
- Recording your stats and analyzing them(I used poker recording software for my online games, and notebooks for live, do the same for your trading)
- Finding your leaks (you have recorded your own stats and watched your own replays. Identify and fix your mistakes. you are probably not going to let the ego catch you out)
- TILT (seriously happens in poker and it happens in trading, you know it exists, its -EV and you deal with it)


Things I thought made the transition harder:
-Multitabling (you are probably used to having a lot of tables running so you can always play a hand. trading multiple instruments at first so you can have some action is a big mistake. Trade 1 instrument and be patient (play tight))
-Used to be able to play whenever , popping open your trading software at 3AM is probably going to be a mistake (you cant just sit down and open some tables whenever. More active times of day are usually better to trade, try to trade during normal trading hours)
-Knowing your outs (with a 52 card deck you can calculate your outs in most any situation. In trading the price changes can create infinite amounts of combinations. This used to drive me nuts. You can never really know what your chance for catching an out is.)


All in all I loved playing cards and still do. Trading is definitely an extension of that for me and I love it just the same. Choosing your instrument and trading style is just like picking your game and table. For me I went the algorithmic route, it made sense to me and gave me more concrete numbers to work with. I did try manual trading using market profile and other technical indicators which I had moderate success with. Manual DOM trading i personally think is a bunch of hooey for reasons I wont go into. Overall I think the algo method was the way for me. I am sure you will find your own style. Either way good luck.

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Couple of resources for discretionary scalping that could be useful.

http://www.youtube.com/user/PATsTrading

Learn How To Day Trade Using Pure Price Action - Price Action Trading

https://futures.io/elite-trading-journals/30373-pats-price-action-trading-elite-members-common-journal.html


Simplest approach I've found.

Hope this helps.

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Few resources for discretionary scalping that could be useful.

http://www.youtube.com/user/PATsTrading

Learn How To Day Trade Using Pure Price Action - Price Action Trading

https://futures.io/elite-trading-journals/30373-pats-price-action-trading-elite-members-common-journal.html


Simplest approach I've found.

Hope this helps.

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