Playing Poker And Investing In The Stock Market

I often call poker players stock market investors who are having fun. This is not strictly true for stock market investing can be fun for the right person and poker can also be as disheartening as stock market investing for some. But generally, investing in the stock market is more for business than fun and poker playing is more for leisure than making money (except for poker sharks who make a living out of playing poker).Psychology is always involvedPlaying the stock market involves psychology, too. Stocks are owned, sold and bought by humans. One must know basic human psychology to be able to make money in stocks trading where bluffing is a common measure. Some stocks go up in prices because of the manipulative tricks played by some investors. Knowing the true value of an investment hinges on knowing how humans think and rationalize. Thus, one has to make a study of human motivations to be effective in stocks trading.Playing poker requires a working strategy and a game plan. Luck can only do so much in the way a game turns out. A poker player must know how to read the odds. He must know when to call a bluff and when to raise the bet. He must know which cards to keep and which cards to discard. Likewise, a poker player has to know when to cut his losses and wait for another opportunity to score big. In a long-term poker play, somebody who has no strategy is as good as broke.

In stock market investing, a long-term strategy based on solid facts is also required. A stock market investor must always ask the question, ?What are the odds that stock so and so are going to rise again?? In a market of sky-high inflation and interest rates, where stock prices are at rock bottom, he must know to buy the stocks which will eventually recover and bring a high margin of profit. From his own stocks, he must also know how to hold on to those that have the highest chances of recovering. Likewise, a stock market investor must know when to cut his losses and flee the market, and when to come back in again. In stocks market investing, someone who merely goes with the flow is as good as busted.