Just came across an interesting website, http://www.texasholdeminvesting.com . I’ve been playing Texas Hold’em poker for a while now via Facebook/Zynga and unlike past experiences I now really enjoy my time playing it. I’m not sure why in the past I didn’t catch the holdem bug. If I try to think about it then maybe it’s a developmental thing. In the past I was attracted to holdem, and did reasonably well but found it too similar to trading on the emotional side and therefore a bit of a drain while now that aspect disappeared and I can play it for hours.

Anyways, as the title of the post and the website indicate there are countless parallels between investing / day trading and Texas Holdem Poker. In fact the Texasholdeminvesting website came up with a book dedicated to identifying the similarities. I’ve just downloaded it (free intro), and looking through he’s got most of the topics covered, like: managing emotions, thinking in probabilities, performance analysis, and bankroll size and position sizing. I’m hard pressed to find a game with more similarities with trading than poker. Depending on your personal traits poker can be a good way to sharpen some trading related skills or just have some fun during market downtime.

H/T to Meir.

P.S. If you’re playing texas hold’em and haven’t tried Zynga I think it’s one of the nicest free fake money poker out there that I’ve come across. If you’re on my facebook list give me a buzz if you want to play a few rounds.

Tags: Buzz, Day Trading, emotions, experiences, facebook, game, market, parallels, performance, performance analysis, position sizing, probabilities, stocks trading, texas hold em poker, texas holdem poker, trading, Zynga

It’s been a while since I’ve updated my list of Best Trading Books which I recommend to traders looking to up their game. And there’s a good reason for that, I didn’t see anything interesting out there that would make it as a “Top Trading Book”, that’s till I recently came across this fantastic book. First I need to say this isn’t a paid or incentive driven review, I didn’t get a free book, and I have absolutely no affiliation with the writer. I just think that One Good Trade is a damn good trading book which almost any trader can benefit from.

I did skip the first couple of chapters (mostly prop trading related) but then instead of skimming through to the end like I would do with most new “get rich quick” / secret formula trading book for stocks / futures / options and all other instruments on the planet, I actually started seeing some really good material in it which kept me reading. It’s like one of those gem of a trading book that Dr. Brett Steenbarger publishes (his 2 books Enhancing Trader Performance and The Daily Trading Coach are absolute must read).

The author of One Good Trade, Mike Bellafiore covers almost everything you can think of in terms of the journey to becoming a good trader. From specific advice on Tools of Success:

To real world examples and explanations on sound trading building blocks such as

And more advanced stuff such as reading the tape, high frequency trading, when to press your winners etc.

Even if you’ve read dozens of trading books in the past (who hasn’t..) I would still encourage you to pick up this one.

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There’s an interesting post over at Brett Steenbarger’s blog on viewing sectors performance during the day. I find it more and more useful myself when looking at the market. It doesn’t tell you of course what’s going to happen but it helps frame a bias for the day and acts as confirmation/non of other analysis. Anyway I thought I’d another tool along the same lines. This one from Google Finance. In the past I’ve always defaulted to Yahoo!Finance for the (relatively) rare occasions I needed to check up on a ticker and see what’s the company behind it. However recently I’ve started using Google Finance more and more, they keep rolling out new stuff and making improvements to layout and content. So here’s what their sectors overview look like. I like the clean and easy to read format.

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Tags: brett steenbarger, finance, foreign markets, google, heatmap, improvements, markets sectors, performance, Stock Market, yahoo

I don’t post daily results anymore, it’s not very meaningful and just adds to stress during drawdowns. But Here’s a snapshot of my total R return since August last year. Note the Jan – Feb chop/drawdown that I mentioned before. I then made some changes to my trading to adapt to the new environment. I included last year’s data mainly so it’s easier to see the Jan-Feb period in context. Also note that I was on vacation for most of December (only worked for 4 days) and Nov/Jan weren’t full working months either. The graph was generated using Stocktickr.

I’m also trialing Market System Analzyer which offers a wide array of statistics and position sizing simulation tools. Here are a few interesting stats for data since Jan 2007.

• Total Number of Trades: 731
• Profit Factor for all trades: 1.669
• Percent Profitable: 39.67%
• Max Number Consecutive Wins: 7
• Max Number Consecutive Losses: 11
• Win/Loss Ratio: 2.538
• Worst Case Drawdown (%) Equity Value: 5.922%

I’m very far from trading in the best way I can, both from a hard stats point of view as well as on a personal level. I don’t think it’s possible to trade in a 100% “optimal” way but there are certainly things I can and should continue working on. This is one of the fascinating and challenging aspects of trading, you never “arrive”, you just progress or regress.

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It’s been a while since I updated my “Weekly” poll.. Here are the results for the most recent one. It looks like the majority of voters feel a return of 10 to 30% is realistic..

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