I listened to the audiobook Thinking in Bets from Annie Duke. She is a professional poker player and shares her information about risk taking, placing bets, winning in life. I’ve come to understand that poker and trading have a lot in common.
The world is not black and white. There is no 0% or 100% chances, you need to think in probabilities. When Trump had “only” 40% chance against Hillary and won, journalists were surprised but poker players weren’t. 40% is also a probability of an outcome.
There is skill and luck in decision making process and the outcome. Sometimes there’s more skill and less luck, other times there’s less skill and more luck. People too often think positive outcomes were for a skill and negative outcomes are blamed for bad luck which is irrelevant.
When somebody else has negative outcome he/she is often blamed for lack of skills and in case of positive outcome that he/she was lucky. This is the other way round when thinking about oneself.
Life is poker, not chess. Poker includes uncertainty, incomplete data, bluff and luck while in chess everything is on the table.
Backcasting is thinking in future and see how to get there. It can be thought about the positive outcome in the future as well as the negative outcome happening in the future.
If you are prepared for future action, there’s no surprise or emotion if things go wrong.
I enjoyed listening to the audiobook and recommend to others who are interested to gain insights about how to think in bets.
Thinking in Bets by Annie Duke book link
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