Credit crunch, recession, redundancy, bonuses cancelled

/ CityAM / 30 January 2008 / 1 Comments

"Calling all you sad-looking stockbrokers - are your skills better applied to online poker?" asks Betfair's Oliver Bowen...

You've had to stop yourself out of a number of "shrewd" positions you thought were good long-term plays. Your HSBC shares have been on a downward spiral since the beginning of November (when you confidently backed up your position at £100 per point on Tradefair.com) and your BP shares are the lowest they've been since January '05.

But you are a good trader. You are good at running wins and knowing when to take profit, you operate rigid stop-losses and you have self control. You have found a trading technique that works for you. You have conquered fear and greed. For you it is all about expected value, return over time and making correct decisions often enough to ensure you turn a profit. What you are is a good poker player.

Annette Obrestad is a 19 year-old Betfair-sponsored professional player from Norway. She is arguably the best poker tournament player in the world and has won nearly a million pounds playing online poker. She also won £1m at the World Series of Poker Europe live event in London in September.

Her approach to poker is not dissimilar from your approach to trading. That is why she is so good. She has found a style that works for her, she is ruthlessly self-disciplined, she makes decisions based on value and expected return over time and she does not let her emotions stop her from making the correct poker decisions.

Annette Obrestad is the Goldman Sachs of poker. If Goldman Sachs was an online poker pro, then it wouldn't be playing the $10 tournaments - and nor does Annette. The best players with the largest bankrolls play the biggest games because if you are good, volume and size define your profitability.

This Sunday night at 6:30pm, Annette will have no qualms about buying into the $100k guaranteed tournament on Betfair for $550. She knows (because she analyses her stats) that she is likely to make the money in the tournament around 15% of the time. She also knows that her ROI in this kind of tournament is 130%. She knows this because she has played thousands of tournaments and tracks her results.

Her skill level is such that her expected value by playing the weekly Betfair Poker $100k is very positive. In fact, she once won a 180 player tournament without looking at her cards - but that story is for another time.

Annette Obrestad isn't gambling; she is looking for value. Taking a position on the FTSE is akin to playing poker; if you make decisions which are not based on a good perception of value, you are gambling and you will lose over time.

You need to find your skill level and your financial comfort zone and find a technique that works for you. Some of Betfair Poker's most consistently profitable online players will play 12 tables at a time at low stakes. Others will make the same money playing one table at higher stakes. The key is to get your money into the pot as the better than 51% favourite as many times as possible for as much money as you can afford given variance and your bankroll.

If you knew with 51% certainty which way the oil price was going to move each day you would be able to make a return. If you learn to become a good poker player then you might just get to Annette's level, where the more you play the more you make - regardless of whether there is a recession or not.

Betfair Poker's $100k guaranteed prize pool tournament takes place every Sunday at 1830 GMT.