When I am not trading, or preparing for trading, I spend a lot of my time watching professionals, particularly high-level professionals. I find watching any high-level professional in any field gives me tremendous insight into being a professional, how to operate at a high level, and how I can improve my trading.
This week I had a buffet in studying professionals from various fields. There were several people who influenced me in many ways, but one really stood out. Pius Heinz.
Who is Pius Heinz?
A 22-year old german who was the first to ever win the World Series of Poker just 4 days ago. After 9 days, over 80+hrs of poker playing, going up against over 6500+ other people who wanted nothing more than to take his money, he prevailed. Something should be said about his story and his winning the greatest prize in the world of poker.
Pius first watched poker on german tv and was fascinated. He played a few games and then decided it was a game of skill. He then spent the next several months studying intensely the game of poker and immersed himself in learning it inside out. He started off playing online poker and had some success, but felt unprepared for live play.
So what did he do?
He spent over a year learning live play and entered in several tournaments to gain experience in playing live as opposed to online. After having mixed success, he was deciding whether he wanted to play poker full time.
But he stuck with it as he felt he could be successful, despite having mixed results.
Enter the 2011 WSOP tournament.
The first day he had to play for over 10hrs with very few breaks. He was playing against 6500+ contestants many with more experience then he. Every day he won, meant another 10+hr day, making sure his reads were sharp, his math was on point, his patience never-ending and his concentration never wavering.
Imagine playing in the largest tournament in the world, playing against people who will do anything to make you lose. Imagine having someone stare at you with the most intense look possible while not having to give off any clues as to what your hand is? Imagine playing with larger amounts of money than you have ever seen in your life, keeping your emotions in check and completely focused. And every day he won, the energy got more intense, the stakes higher, all while remaining patient, concentrated and focused. All at the age of 22.
Going into the last few days, Pius was not the chip leader. In fact, he was not even in the top 10. Did he get discouraged? No, he kept completely focused on his task whether he just won a lot of money, or lost of ton of money.
The final day of the tournament is called Day 9 where the final 9 players would play at the final table, all competing for an $8.7million prize. Again, Pius was not the chip leader going into this. He was in the middle of the pack against many more experienced players, including the 2011 player of the year Ben Lamb.
Playing for 7.5hrs, waiting for the right hands, paying attention to every detail, and maintaining his patience and discipline, he began to climb. He was building his stack of chips and moving up the ladder. While others were making mistakes, he was playing perfect poker. After 7 were eliminated, it was Pius going heads up against the 35 year old Martin Staszko, a chess and mathematical wiz who used to work at an auto paint shop. Now, they were competing for the WSOP bracelet and $8.7million for the winner.
In the final heads up play, they exchanged the lead 9x over 119 hands. At one point, Staszko had a 4-1 chip advantage. On remembering this part in the play, Heinz commented, “I tried not to lose my nerve. At some point I was not making a hand. I was getting frustrated, honestly. I just tried to play my game.” Even after things not going his way, he kept to his discipline and his plan. Eventually, he got his hands, made the right play, and won the tournament. He was the first German player to ever win the WSOP, all at the age of 22.
Poker, Concentration and Trading
After being introduced to poker by a friend of mine, I became addicted. Not because of the money, but because of the similarities to trading.
Mathematics and Risk Management
In poker, you have to play the mathematics in your favor. Yes, you have to read the players and that is a critical skill. But, there is nothing more powerful then having the mathematics in your favor. The chances of winning when you have a dominated hand puts all the odds against you, and over time, they play out. You actually have to learn money-management and violating this only increases the chances you will lose your money which is your ammo.
Learning to play with smart money management is critical in poker and trading. If you doubt the power of mathematics, why do you think casinos on average make over $1billion a year? Because they know the mathematics to the tee and they put all of the numbers in their favor. They play the math against people who do not know the numbers, and that is why they win. If you cannot manage your money, it is like trying to fill up a bathtub with holes in it. You will always find all your efforts spilling out from your account. This is why it is essential to learn proper money management.
Poker players need immense concentration to play at a high level. They have to watch the reactions of all the other players, study every detail, remember what hands they had and how they played them. And while they are not watching others, they are being watched with the most intense scrutiny. They need discipline not to give any clues and patience with every turn. At one point in the tournament, a player waited 10minutes to read the other player. Imagine being stared at for 10minutes while your competitor is watching every breath, move, inflection and gesture. Amazingly, the player being watched never flinched, never took his eyes off his focus point, never changed his breathing and was perfectly stoic. He showed immense skill, focus and concentration.
Traders need this razor sharp concentration as well. Every detail offers information. Every move you make either makes or loses you money. While things are going against you, do you adjust your stop? When you see the money draining out of your account, do you follow your plan? When you are watching the markets, are you easily distracted, or like a sniper putting the cross hairs on the target? Concentration is absolutely critical and every mistake could be disastrous. All high level traders have immense concentration.
Ask yourself how strong is your concentration when trading? Are you taking calls, reading emails, scanning the web, or are you focused on nothing but the markets? If this is lacking, work on building your concentration. A simple technique before you start trading is to spend 15 minutes just watching your breath through the inhales and exhales. Notice how quickly your mind gets distracted from doing something so simple. Then imagine what it is like during trading which is far more complex. Continuing the meditation practice will be invaluable for your attention and concentration.
Along those lines, also ask yourself how strong is your money management. Do you know your risk of ruin? And do you follow your rules diligently, or do you go off the reservation. Make sure to put the mathematics in your favor as it will be a tremendous asset in your trading.
It also helps to understand your Equity Threshold and if you are there or not. Pius definitely was playing with more money then he ever had in his entire life and bumped up against his equity threshold. If it weren’t for his concentration, emotions would have dictated his play, and we would likely have another champion.
Lastly, how much have you dedicated yourself to studying a system or methodology? Pius knew poker was a game of skill, and spent months end over end learning his craft. He wasn’t in it for the quick money and wanted to do it well.
Ask yourself do you have a forex trading system and have you spent months studying it? If not, have patience as you never know what could happen. You could be deciding one day to quit trading, and next day be on top of the world. You could be working in an auto paint shop for years, and the next competing for an $8.7million dollar prize. One day, you could be just like Pius, who after years of studying his craft, – be facing some big decisions at the highest level.
Congratulations to Pius. Through hard work, study, patience, discipline and concentration, you were successful at the highest level.
As for you reading this article, what will be your story?
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For those of you wanting to learn a system, check out this article Understanding Price Action.