What’s a Skill-Based Play?
In our context, skill-based play is a highly strategic and mathematical activity, such as playing online poker and engaging in financial trading, which is highly correlated. We have focused on Advantage play and passive trading. However, the lockdown caused by COVID-19 and a work-from-home environment give people more flexible time management.
Therefore, we created two areas where we already have our expertise, which are:
Benefits of Highly Strategic Play
Brain Health
Poker can sharpen your brain. Dr. Jeffrey Cummings, a leading researcher in the field of Alzheimer’s disease, said in the blog ;
Playing poker is a great way to drastically decrease your chances of developing Alzheimer’s and other brain-related diseases, typically associated with old age, by 50% or even more. Dr Cummings references a French study from 2009 in his research. In the French study, 5,000 elderly individuals played various games that stimulate mental activity. Poker was one of the games in the study and it proved itself to be one of the most effective when it comes to combating Alzheimer’s disease.
Investing Skill
The connection between poker skills and investing skills is already well-proven.
The article “Could poker make you a better investor?”, which is based on an SSRN Research Paper, said;
Good poker skills certainly seem to help if you’re a hedge fund manager. A new study, Hedge Fund Hold’em, has found hedge fund managers who do well in poker tournaments enjoy significantly better fund returns. “This effect is stronger for tournaments with more entrants, larger buy-ins, larger cash prizes and for managers who win multiple tournaments,” the study notes, “suggesting poker skills are correlated with fund management skills.” Is it possible the hedge fund managers in the sample are simply big gamblers who got lucky, or that they were rewarded for taking extra risk? No – managers who played poker “are not more risk-seeking than their non-player counterparts”. Quite simply, the results show “skilled poker players are, on average, better fund managers”.
The article also said;
Most things in life – including investing – are like poker, not chess. It is a “game of incomplete information”, of “decision-making under conditions of uncertainty”; important information “remains hidden” and there is “an element of luck in any outcome”. Luck can allow a hopeless poker player to go on a winning streak, just as a clueless investor can make a bundle by getting lucky on a speculative stock.
So, poker seems to be “the best off-time activity to improve investing skills“.
Finally, for those who think quickly, the below quote from the same article is usefully supported by this article;
Instead of learning poker skills, couldn’t investors simply invest in funds headed by skilled poker players? Alas, no – the aforementioned study found such hedge funds underperform following big poker wins. The connection between poker skill and investing skill is well known, so money tends to flood into such funds following high-profile tournament wins. Size hurts investment performance; as Warren Buffett often points out, it’s a lot easier to be nimble and to make big bucks if you’re managing millions rather than billions. Thus, it’s too late to buy into a fund after a big poker victory.
So, highly strategic play may activate your brain, and there are good synergies between poker and financial trading.
Own Financial Manual Trading
In our definition, Manual Trading, as opposed to passive trading, is the process involving human decision-making and entering and exiting trades. Computer programs, such as algorithms, are used to set automated indicators; human input is required to execute trades.
Skill-Based Play Wrap Up
These areas require practice and patience initially. Never overlook the importance of the initial training. Your success rate will be much higher if you make the right start. Once you reach a certain level, you will have a rewarding winning experience that will automatically bring you a satisfactory monetary return.
For those who don’t have enough time or a lower risk tolerance, I suggest starting with Advantage Play or Passive Trading if you haven’t already explored them.