To become a profitable trader, the first step is usually to try and pick good stocks. Most people are aware of the fact that selecting good stocks without thinking of a good exit strategy is a near impossible task.
An exit strategy is the most difficult part for many investors and traders in the market today. To trade profitably, many people say that you need to develop a good mentality. The only problem is that for you to develop such a profitable and winning mentality, you must have a good experience. However, there is a small and perfect way to learn this experience without using thousands of dollars. This good way is playing POKER. Yes, this is a very short and interesting way through which you can learn.
Did you know that by investing in stocks and playing poker there are a lot of similarities? One of the most important similarities is the fact that both of them have a relationship with money, uncertainties, and risk. It is important for me therefore to try and explain in this article the differences and the similarities between poker and stock trading. You have to make sure, before proceeding that you know all of the rules of Texas Holdem and you are conversant with all of the terminologies. The reason for this is because there is a huge similarity between stock picking and having a good hand to play.
As is the case in Texas Holdem wherein you can look at the whole selection of cards before deciding to play or not, the same applies in selecting stocks. You will need to start by analyzing the stock before deciding on whether or not to enter an option. For most traders fortunately, you only have to pay the commission. No one will raise pre-flop. However, you need to pay the commission if you want to exit the position, which implies that the cost of entering a position is more or less two times the commission.
You must proceed like a good poker player in the event that you are looking to invest in stocks. Before you invest, you always have to make sure that you conduct an effective research. While trading however you never really have to wait for good stocks as in poker where players have to wait for a good hand. However, you can conduct a search on the stock picking websites to find a good stock. Besides that you can also find them yourself by using screeners. In poker, you get to see the flops and two more cards once you call the blinds. Think of these cards as the performance of your stock after you enter the position.
In poker, the flop can make tree hands, a good hand, a medium hand, or just a bad hand You have to use the same vision in trading, and you should judge both: the upside and the downside potential of the stock. In poker, sometimes you have a good hand but you know that you are losing because your opponents have a better hand than yours.