Understanding Your Emotions
Achieving an understanding of human emotional responses in the context of putting money at risk and in particular understanding your own emotional makeup is one of the most significant similarities between Texas Hold’em poker and investing.
People generally make poor financial decisions and this trait is emphasised when the timeframe for making such financial decisions is shortened. The human mind is hard-wired to make decisions with the burden of a number of biases that have been well-documented by the academic field of “behavioural finance”. The decision-making of the average Texas Hold’em player or investor is riddled with common biases that are difficult to overcome without a concentrated effort to recognise them and prevent them from interfering with your results. The majority of investors and Texas Hold’em poker players bring their normal decision-making methods to putting their money at risk. However, normal decision processes are made with the luxury of time, a luxury which one does not often have in the financial markets or at the Texas Hold’em table.
It is the emotional aspects of Texas Hold’em and investing that you will find most difficult to master. Decisions that involve putting money at risk are amongst the most emotionally-charged decisions that humans make at any stage during our lives. And more importantly, the emotional response to gains and losses in situations where you have put money at risk, such as Texas Hold’em and investing, are among the strongest emotions that you will endure.
Operating in a disciplined way according to your plan and achieving a good knowledge of the Texas Hold’em game / investment market can reduce the part that emotions play in your future decisions related to putting your money at risk – both in Texas Hold’em poker and investing.
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