Chess vs. Poker 
(Gorilla, 505 
Points) on 5/5/09 at 12:17pm
I think poker is most often (and justifiably so) viewed as the choice game for traders for a lot of obvious issues: probability, good amount of subjectivity v. logic, betting, 'Liar's Poker', etc. I wouldn't say there're any addicts on my desk, but people enjoy a good game and talk about it a lot, and I know Susquehanna and a lot of prop shops integrate it into their training.
I like poker and do well in some of the circles I play in (racked it up at Penn with a lot of rich kids who didn't know any better), but my choice game is chess - I like that essentially, all the information is in front of you and I feel like there're more contingencies to manage. Like poker, it's essentially about identifying risk, and because the information is more perfect, I think it mirrors markets better.
Any thoughts?
Perfect Info
by yesmanI should clarify - I call the information 'perfect' because it's all there. But as in life, it's often in the interpretation where the errors are made.
hard to go on a run and make
by monty09hard to go on a run and make any money in chess. Its like Stu's gin game.. once your marked your action is gone.
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the right competition
by yesmanI heartily disagree...you find better players and you can make decent money on games/matches (and they don't necessarily take as long as poker, or involve as many people, or require as much up front).
new york is the best city in the world for lucrative, competitive chess, in both officiated clubs/leagues, and private games.
Anyways, I'm more concerned with synergies in the thought processes employed in trading and chess/poker.
I think poker relates
by PnLI think poker relates to trading more so than chess. you are basically making markets in every pot that you play while factoring in odds, imperfect info, strategy, etc.
Irony
by Edmundo BravermanIts like Stu's gin game.. once your marked your action is gone.
Last month here in France (where poker is big), Stu Ungar was on the cover of Live Poker magazine. I just thought it was ironic that a dead poker player would grace the cover of Live Poker.
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that is pretty strange...
by PnLthat is pretty strange...
that is very strange. Who
by monty09that is very strange. Who would you compare in current crop of players that have the same style? PA? PI?
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Just My 2c
by AlphaholicI don't know much trading, but I find poker a microcosm for business in general. I love cards, and while I'm a very low-stakes player, I definitely take a cerebral approach to the game.
That said, I think mastery (especially proven...awards, championships, anything) of either game is a sign that you're very game/process/analytically oriented, and worth bringing to the front of any resume.
Hope that helps. I think arguments can be made for either game without a definitive conclusion.
I'll take a crack at your
by indian-bankerI'll take a crack at your question because I spoke about chess during one of my trading interviews and I play a lot of chess(was also FIDE 1800+ rated). When you're playing chess, you have a set opening (sicilian, ruy lopez, etc.) and a follow through strategy unlike poker where you encounter a higher level of unpredictability immediately which traders often have to deal with. When you are playing chess, you have one opponent, that allows you to devote your focus on a particular move or set of moves. In poker, you usually have more than one opponent, and that makes you consider others actions even more, just like in trading you obviously deal with an entire market. Like PnL mentioned, you are continuously making markets in every pot you play while factoring in odds with imperfect info in Poker. In chess, you deal with perfect information, everything you need is in front of you, and you can make informed decisions. I will tell you that chess is great for making directional bets.
indian-banker - really
by yesmanindian-banker - really appreciated your input, that was exactly the kind of commentary I was looking for.
No doubt opening is very rehearsed, but I do think chess entails a lot more unpredictability than you implied. I started considering myself a more advanced chess player once I stopped thinking mechanically (ie - tried to predict as many moves ahead as possible) and started thinking tactically in 3-4 moves max, and strategically thereafter. Opening and endgame aren't very improvised; you develop a thesis, which makes chess conducive to prop/directional bets.
as for poker, i like the market making aspect, but to be decisive, you have to build a scenario in your head of who has what and bet/fold accordingly - to me, that's similar to building and opening and a follow through.
maybe I just prefer chess because it's combative
poker is the best hands
by GeneralThadepoker is the best hands down... or heads up. Had to include that pun. I personally dont like players that try and integrate the math and probability aspect of the game tirelessly. I for one know that my gut is better than any other system.
INDIAN- BANKER I AGREE
by Ivy"In chess, you deal with perfect information, everything you need is in front of you, and you can make informed decisions."
I love to take risks but usually calculated risks. I rely too much on lucks when it comes to Poker. So Chess that is!
I'm wondering if there's any Chess Club in the LA area. Any one knows? :)
Ivy Nguyen
Not poker or chess...
by Bondarb...the best gambling game for a trader to be good at is high-level blackjack, ie counting cards. To clarify I am talking about a buyside trader not a market maker.
Here is why: 1) being a card counter forces you to understand the concept of position sizing and risk management. Even if you have an edge in the game a card counter can easily bust out if he is over-betting his bankroll as the normal volatility of the game can create long losing stretches. This forces you to learn concepts like risk of ruin and other aplicable risk management concepts. 2) blackjack is faceless. At high levels poker involves skills that do not apply to trading such as "reading your opponent". Watching someone like Phil Helmuth go around the table and basically tell you everyone's hand without seeing the cards is amazing but its not really a skill that is part of trading. Blackjack is purely mathematical always. 3) Discipline and not making mistakes are the key to being profitable at blackjack. A good card counter understands that even one mistake per hour of play may add up to enough in the long run to erode his edge over the house. The system he uses is not nearly as important as iron-clad discipline. 4) Blackjack is solitary and not social. Movies like "21" aside counting cards is not a social way to make a living. It is hours of grinding. Most of the money is made in short bursts and in between are weeks of grinding and grinding. This is how trading is on the buyside also.
Poker and chess are both good games because they require inteligence and are fun but neither apply to trading as well as blackjack. Between poker and chess I think poker does win hands down because the betting aspect mimics position sizing which is the most important part of leveraged trading in my opinion. The one skill poker does teach that is very much like trading the good patience to fold and fold and fold when the odds are against you while still being willing to push a good amount of money into the middle when the odds are on your side. That mentality is important for trading...but blackjack has that also.
Chess is a Strategic game, Poker relies mostly on probabilities
by FrenchAmericanMnA07I have a deep respect for both players but I think that you can't cheat and mislead people about your level playing chess.
Poker is different, I have won tournaments (small stakes) on very lucky hands but I never won any chess games on luck!
The difference between two chess players is based on their ability to think ahead and assess risk and not on a potential good turn or river.
that is a good point french
by Bondarb....an average poker player can sit down and win hands off the best in the world by catching a couple lucky cards, definitely. But remember we are talking about which game has a skill set similar to trading, not which game is the fastest one to sort out who is smarter. A bad trader can make money for years at a time thru luck, just like a poker player can catch a few lucky hands. But in the end it is the risk management and bet sizing of poker that make it a better match for trading, even if skills in those areas take more then a few hours to shine through.
heh
by excelsiorhard to go on a run and make any money in chess. Its like Stu's gin game.. once your marked your action is gone.
this thread is 6th place for stu's gin game in google already
Poker vs Blackjack
by jnxpn...the best gambling game for a trader to be good at is high-level blackjack, ie counting cards. To clarify I am talking about a buyside trader not a market maker.
Here is why: 1) being a card counter forces you to understand the concept of position sizing and risk management. Even if you have an edge in the game a card counter can easily bust out if he is over-betting his bankroll as the normal volatility of the game can create long losing stretches. This forces you to learn concepts like risk of ruin and other aplicable risk management concepts. 2) blackjack is faceless. At high levels poker involves skills that do not apply to trading such as "reading your opponent". Watching someone like Phil Helmuth go around the table and basically tell you everyone's hand without seeing the cards is amazing but its not really a skill that is part of trading. Blackjack is purely mathematical always. 3) Discipline and not making mistakes are the key to being profitable at blackjack. A good card counter understands that even one mistake per hour of play may add up to enough in the long run to erode his edge over the house. The system he uses is not nearly as important as iron-clad discipline. 4) Blackjack is solitary and not social. Movies like "21" aside counting cards is not a social way to make a living. It is hours of grinding. Most of the money is made in short bursts and in between are weeks of grinding and grinding. This is how trading is on the buyside also.
Poker and chess are both good games because they require inteligence and are fun but neither apply to trading as well as blackjack. Between poker and chess I think poker does win hands down because the betting aspect mimics position sizing which is the most important part of leveraged trading in my opinion. The one skill poker does teach that is very much like trading the good patience to fold and fold and fold when the odds are against you while still being willing to push a good amount of money into the middle when the odds are on your side. That mentality is important for trading...but blackjack has that also.
Playing online poker professionally definitely covers all four of those aspects. When you introduce data mining and multitabling, online poker becomes even more similar to trading.
Playing level
by jnxpnI have a deep respect for both players but I think that you can't cheat and mislead people about your level playing chess.
Poker is different, I have won tournaments (small stakes) on very lucky hands but I never won any chess games on luck!
The difference between two chess players is based on their ability to think ahead and assess risk and not on a potential good turn or river.
You don't really need to see who is winning the hands to gauge a player's general skill level. There's a myriad of better ways to tell how good or bad a player is in poker. Betting patterns and sizes tip it off pretty quickly.
Blackjack
by yesmanBondarb - I also have a fondness for blackjack, and I actually think a lot of what you said does apply to market-making.
I think pts 2,3, and 4 in your advocacy for blackjack apply to chess very well - by your logic, that may make it preferable to chess.
.
by rajDid you guys read this article? It was from a while back:
http://online.wsj.com/article/SB123387976335254731.html
Crazy... how do you win a 2 hour chess game without looking at the board...
Certainly being able to know
by devinCertainly being able to know when to hold and when to fold is relevant to any form of risk-taking. In some of the more thinly traded markets out there, it can be a little bit like poker in the way you described it, bondarb. I would give a recent example, but it would be a little like showing my hands so to speak
Buffett on bridge...
by gunboatdiplomat'Buffett himself says about bridge: "It’s got to be the best intellectual exercise out there. You’re seeing through new situations every ten minutes…In the stock market you don’t base your decisions on what the market is doing, but on what you think is rational….Bridge is about weighing gain/loss ratios. You’re doing calculations all the time."( Forbes June 2,1997)
On another occasion he described the similarities between bridge and investment as follows: "The approach and strategies are very similar in that you gather all the information you can and then keep adding to that base of information as things develop. You do whatever the probabilities indicated based on the knowledge that you have at that time, but you are always willing to modify your behaviour or your approach as you get new information. In bridge, you behave in a way that gets the best from your partner. And in business, you behave in the way that gets the best from your managers and your employees."'
More generally I know of quite a few fund managers who play bridge.
Yahoo Chess
by Edmundo BravermanJust a quick question for anyone who plays chess on Yahoo!.
Do the numeric ratings assigned to players on Yahoo! chess conform to same system that the pros use? I think I'm rated around 1300, but I don't really know where this places me in the great scheme of things.
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Trading v Investing
by yesman'Buffett himself says about bridge: "It’s got to be the best intellectual exercise out there. You’re seeing through new situations every ten minutes…In the stock market you don’t base your decisions on what the market is doing, but on what you think is rational….Bridge is about weighing gain/loss ratios. You’re doing calculations all the time."( Forbes June 2,1997)
On another occasion he described the similarities between bridge and investment as follows: "The approach and strategies are very similar in that you gather all the information you can and then keep adding to that base of information as things develop. You do whatever the probabilities indicated based on the knowledge that you have at that time, but you are always willing to modify your behaviour or your approach as you get new information. In bridge, you behave in a way that gets the best from your partner. And in business, you behave in the way that gets the best from your managers and your employees."'
More generally I know of quite a few fund managers who play bridge.
Buffet is not a trader - when you make markets, you follow and act on what's going on at the moment. There is a rationality to it, but it's a short-term rationality, which is largely based in taking advantage of irrationality. Of course, how short-term depends on market depth.
Buffet's trademark saying is that his favorite holding period is forever - no market maker wants anything on his book at the end of the day.
And Edmundo - professional ratings (the Elo system) are more concrete the more solid your competition. The system has evolved over the years where its more applicable to casual games; it was originally based on a normal distribution, but as weaker players were found to win more often than their score would predict, the system adopted a logarithmic distribution. There are still inherent biases in the system, primarily, that you can choose your competition in open games. So in general, there're not comparable because in tournaments you don't choose who you play and there's usually an skill-based entrance requirement.
Re yesman
by gunboatdiplomatBuffet is not a trader
Buffet's trademark saying is that his favorite holding period is forever - no market maker wants anything on his book at the end of the day.
Thanks for that.
when you make markets, you follow and act on what's going on at the moment. There is a rationality to it, but it's a short-term rationality, which is largely based in taking advantage of irrationality
This section is genius.
You presumably wouldn't describe Boaz Weinstein as a trader (which for you seems to be equivalent to market maker) then?
To be fair
by Edmundo BravermanOld Boaz ain't doing much trading these days...
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no
by aachimpBuffet's trademark saying is that his favorite holding period is forever - no market maker wants anything on his book at the end of the day.
this is false.
i mean, boaz didnt lose THAT
by PnLi mean, boaz didnt lose THAT much $ right??
a
by indian-bankerYahoo ratings are not that good. A player rated 2000 in yahoo should be about 1750-1800 in real. The pros use a different system. If you want to play some really good chess, I suggest ICC (internet chess club). After a certain point, you need to learn theories or tactics to improve in chess. Mere thinking will only get you so far unless you have a mind like a computer that can run thousands of calculations in a matter of seconds or minutes. Of course, the best players know most of the theories if not all, and at that level it's about applying those theories in creative ways.
Just a quick question for anyone who plays chess on Yahoo!.
Do the numeric ratings assigned to players on Yahoo! chess conform to same system that the pros use? I think I'm rated around 1300, but I don't really know where this places me in the great scheme of things.
c
by indian-bankerDid you guys read this article? It was from a while back:
http://online.wsj.com/article/SB123387976335254731.html
Crazy... how do you win a 2 hour chess game without looking at the board...
This is actually easier than it sounds because when you continue playing chess for a while, you start thinking about the game all the time. It's actually got little to do with memorizing the position of every piece because you start remembering positions in clusters which makes it a lot easier. Boaz is an international master I think. He's not a GM yet, but certainly has the potential to become one.
...
by Bondarb...yeah boaz is great at chess. To bad he sucks at trading, has a lifetime p&l of -several billion dollars, and almost single-handedly blew up Deutsche Bank. ...Just another "genius"..
information and trading
by TeamLRAMyesman writes:
I like that essentially, all the information is in front of you and I feel like there're more contingencies to manage. Like poker, it's essentially about identifying risk, and because the information is more perfect, I think it mirrors markets better.
Imperfect information drives trading. The act of trading is because people need to judge imperfect information. If everyone knew a stock was going to go up in the next week, no one would sell the stock. The quality of perfect information in chess makes it least like trading.
Similarly, blackjack is also very dissimilar to trading because all the probabilities are known. How does one statistically arbitrage when the correlations and variances of assets change over time?
Lets not forget the market is made up of a bunch of people who are prone to group think, emotions, manias, etc. Poker is the only game mentioned in this comment thread that requires a player to make judgment calls on imperfect information. Therefore, its the most similar game to trading.
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From my limited experience,
by smartguy907From my limited experience, chess is the game of quants. Poker is the game for traders. New York is hands down best for chess. You can really play poker in public like you can play chess. Also from my experience, the mastery of chess does not go very far in terms of interviews or jobs. I don't think that it is nearly as popular as poker.
it's pretty hard to bluff
by MarginCallingit's pretty hard to bluff the markets