Which is higher variance? Trading or poker?

    • tommygecko
      tommygecko
      Bronze
      Joined: 11.08.2012 Posts: 1,229
      ^^

      And also, since poker is only getting harder and harder. Can trading be a better place to start at for someone who primarily wants income?
  • 7 replies
    • jules97
      jules97
      Bronze
      Joined: 10.06.2012 Posts: 1,449
      Trading is higher variance and harder.

      You can't start at nl2 trading and work your way up. You have to start at nl10k.
    • VorpalF2F
      VorpalF2F
      Super Moderator
      Super Moderator
      Joined: 02.09.2010 Posts: 8,901
      Hi, tommygecko,

      I think that with poker, at least, you have some measure of control over the outcome.

      With trading, you are riding the whirlwind, and the best you can do is to predict where you'll land -- and it isn't always over the rainbow.

      --VS
    • bennisboy
      bennisboy
      Bronze
      Joined: 11.04.2011 Posts: 711
      It depends

      There are millions of securities to invest in out there. Some will be pretty stable i.e. lower variance, but lower variance means lower potential returns.

      Also, there is no point 'trading' unless you have a colossal bank roll, due to transaction costs involved in active management.

      If you have a couple of thousand pounds/dollars/euros hanging around that you won't need as an emergency fund, then set up a tax exempt savings account with a brokerage (most countries have them e.g. ISAs or IRAs). Use the research of the companies to invest in 3 or 4 mutual funds (most brokerages have recommended portfolios for different risk strategies or investment aims) and invest in those.

      You will benefit from agreements that many brokerages have with the funds where you will not have to pay the initial commission, and get discounts on management charges.

      Sit on a decent portfolio for long enough and you will see an increase in your assets. Investing is about wise selection, and patience. As an individual, trading is very hard to come out on top.
    • mineriva
      mineriva
      Bronze
      Joined: 30.04.2008 Posts: 913
      Trade is the transfer of ownership of goods and services from one person or entity to another by getting something in exchange from the buyer.

      All these online stock and/or forex "trading" is not that. You do not get ownership of these stocks. You cannot buy some stock or forex and then insist that the goods be delivered to your doorstep.

      What these guys do is allow you to wager on the outcome of the specific stock or forex/pair. In particular they allow you to wager on a range of outcomes above or below a predetermined margin. That is nothing other then spread betting.

      Using forex as an example: Forex prices are determined by offer and demand for a specific forex pair as traded by the banks. These banks themselves therefore have, to some extent, insider info. They also have the means to predict, as far as it is possible, what the market will do.

      Banks, as international entities, with this insider info do not even "trade" online in this form because it is not economically wise.
      Neither should you.
    • Itsnevereasy
      Itsnevereasy
      Bronze
      Joined: 08.08.2010 Posts: 381
      Variance is lower where your edge is bigger.

      In poker you play vs drunk retards. In trading you are facing multinational investment banks and hedge funds. Go figure.
    • bennisboy
      bennisboy
      Bronze
      Joined: 11.04.2011 Posts: 711
      Originally posted by mineriva
      Trade is the transfer of ownership of goods and services from one person or entity to another by getting something in exchange from the buyer.

      All these online stock and/or forex "trading" is not that. You do not get ownership of these stocks. You cannot buy some stock or forex and then insist that the goods be delivered to your doorstep.

      Actually if you own stocks, you own part of the equity of the company

      Same kind of thing goes for many forms of trading.

      But yeah, a lot of these online brokerages (for instance the forex ones you mention), you own non-physical currency.

      Also, I don't think it's fair just to quote the dictionary definition of a word these days, or any days, because words often pick up new meanings. Trading is quote legitimately used here because you are buying and selling.

      One last thing I heard from a great investor (Warren Buffet I think):
      "Successful investing is about time, not timing"
    • Naems
      Naems
      Bronze
      Joined: 27.05.2008 Posts: 1,919
      i havent played Poker for almost a year now. I felt like coming back and saw i still had 25$
      left on my account ( thought i cashed everything out ). I started playing and working on my game and in 2 weeks i made 540$ out of it. Well i played nl400 before and was basically bumhunting micro sh tables so its not that of a magic trick, but show me the same return of invest with trading. As someone mentioned above you need a big roll to make significant profit.