Written by: Goshawk Trades

Translated by: AididiaoJP, Foresight News

Texas Hold'em is one of the most powerful secrets in trading.

Jeff Yass, valued at about 67 billion dollars, requires every trader in his hedge fund - quant fund - with more than 500 billion dollars in assets to learn how to play Texas Hold'em.

This is the core of their trading training.

Why?

Because Texas Hold'em can teach you the key skills that distinguish professional traders from ordinary people: correct betting, risk management, probabilistic thinking, and controlling emotions when volatility hits.

The following 5 principles of Texas Hold'em can elevate your trading level.

1. Position Management

This is the most important lesson Texas Hold'em teaches us.

Even if you get pocket Aces — one of the best starting hands — you will probably lose 1 time for every 5 times you play. If you push all your chips in every time you get Aces, you will eventually go broke. It's not a question of if, but when.

The same goes for trading.

Even the most confident trading opportunity can result in a loss. And the number of losses might be more than you think. If you put 30%, 40%, or even 50% of your account on a single trade just because "this trend looks really good," you might be just one losing streak away from blowing up your account.

Many people forget this mathematical principle: if your account is down by 50%, you need to make 100% just to break even.

This is why both professional poker players and professional traders care about the same thing: it’s not about how much you can win, but whether you can afford to lose.

Manage your position well, and ensure you can withstand volatility; that is the key.

2. Choosing the Right Table is an Advantage

In Texas Hold'em, even if you are ranked 10th in the world, if you sit down at a table with 9 others ranked in the top 10, it will be hard for you to make money.

But what if this expert sits at a table full of amateur players? Over time, even losing money becomes difficult.

It's the same in the market.

Choosing which market to trade in is one of the most crucial decisions you often overlook. Many retail investors jump into forex or stock indices — the most competitive and transparent markets on the planet — and then wonder why they can't make money.

However, those less active markets actually present more opportunities. Emerging markets, illiquid cryptocurrency pairs, and prediction markets are the "soft tables" in trading.

Big institutions may not operate well in these places. Either the market is too small, and money can't come in and out easily, or the compliance requirements are too high to enter.

This is your opportunity.

3. Bet More When You Have a Great Hand

When playing cards, the better your hand, the greater your chances of winning, and the more you bet. You wouldn't bet the same with a pair of 2s as you would with a pair of Aces.

This may sound simple, but most traders completely fail to do it.

They place the same bet on every trade, regardless of the strength of the signal.

Truly skilled traders and poker players adjust their positions based on the size of their advantage. When the odds are clearly in their favor and the opportunity is good, they increase their stake. When the signals are weak or uncertain, they play small or don't play at all.

Those who count cards understand this best. When the cards are favorable, they raise their bets. When the cards are bad or uncertain, they bet the minimum.

If you can't estimate the odds clearly, or if the odds aren't in your favor, don't place a big bet.

4. Always Focus on the Process, Not the Outcome

This might be the hardest lesson to accept in both poker and trading.

You might make a mathematically correct decision and still end up losing. Or you might make a poor decision but end up winning. In the short term, luck doesn’t care whether your process is correct.

But what about the long term? The process is everything.

A poker player might push their chips in with a 90% win rate and still lose; they won’t regret it. Because the decision was correct, it was just bad luck, which is a separate issue.

The same is true for trading. You might do everything right for several weeks or even months but still end up losing money. You may experience times when everything seems to go against you, even to the point of doubting your methods.

Many people break down during these periods. They abandon good strategies after a few losses because they confuse "bad results" with "wrong methods."

Professionals do not think this way. They review their decisions, not the results. They ask themselves, "Did I follow the system?" instead of "Did I make money today?"

5. Develop Psychological Resilience to Withstand Volatility

Texas Hold'em can teach you how to face difficult times.

You will definitely experience significant ups and downs. There will be times when everything seems to be against you, as well as periods when you feel invincible.

Both situations are dangerous because they can affect your decision-making.

Top poker players possess a knack for what some call the "Zen robot state" — focusing solely on the current hand without dwelling on the last one. They only look at the current situation and do what needs to be done.

In trading, this means not letting every trade's profit or loss dictate your actions. Your job is not to feel happy when making money or upset when losing. Your task is to execute your trading system and allow probability to play out over enough trades.

This is why I always recommend automating trading strategies. Let the system place the orders, removing emotions from the equation. There will be no hesitation to enter; you won’t act impulsively after a loss, nor will you panic when facing a loss.

Automation cannot eliminate volatility; no one can. But it can help you avoid the emotional damage caused by volatility.

In Conclusion

In the end, it boils down to these points: know where your strengths lie, understand how probability works, and develop a psychological quality that can maintain stable advantages over the long term.

Texas Hold'em, in a small, fast-feedback environment, trains you in these three abilities, making it an excellent training ground.