Utilizing Texas Hold'em poker strategies! How can poker skills bring unfair advantages in the cryptocurrency field?

The DeFi Edge, a DeFi researcher, has recently published a lengthy article describing trading strategies and mindset in poker, comparing them to cryptocurrency. While many are chanting WAGMI, the importance of poker's PVP mode in the crypto space may be underestimated: someone has to lose for you to win.

Original Link: https://twitter.com/thedefiedge/status/1494718736175009794

Utilizing poker strategies can give you an unfair advantage in cryptocurrency trading, and you don't need to play thousands of hands to start seeing returns. Here are 17 key doctrines:

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1. Advantage of Whales

In a poker game, the player with the most chips can dominate everyone.

In Cryptocurrency:

Whales can dominate you without you noticing:

• Gain access to earlier trades.
• Easier access to insider information.
• Can manipulate small market capitalization markets.

This is not a fair game.

2. Whales Have Another Advantage

You may have witnessed the scene weeks ago when the whales crashed Wonderland, causing massive liquidations. They understand how money works, and even those not using leverage got wrecked.

There are hidden motives behind everything; you will hear a lot of advice at the poker table:

Bro, if I were you, I would fold this hand.

Are they really looking out for your best interests?

In Cryptocurrency:

Be careful with the advice you receive from various sources; what are their motives?

The narrative of "this coin will increase a hundredfold" is often a prelude to them offloading it to you.

3. PVP Mentality

Poker is Player Versus Player (PVP); someone has to lose for you to win.

In Cryptocurrency:

You underestimate the potential importance of PVP in the crypto space; this is not a "We're all gonna make it" situation.

Sometimes, by the time you hear about a DeFi protocol for the first time, early players have already cashed out, leaving you holding the bag.

4. Don't Play Too Many Hands

Beginners get caught up in active trading; professionals understand that waiting for a good hand is a better choice.

In Cryptocurrency:

It's best to patiently wait for solid projects before investing; FOMO will only make you waste money. You are investing, not playing a video game.

5. Stick to Good Projects

On TV, you see professional poker players holding a lousy hand and winning through sheer bravado. They may attract attention, but they are not poker pros.

In Cryptocurrency:

Are you a beginner? First and foremost, stick to solid projects and stop chasing exaggerated APY; there's no such thing as a free lunch in this game.

6. Results Bias

You played the hand perfectly, but still lost the game. That doesn't mean you should change the way you play; the process is more important than the outcome.

In Cryptocurrency:

Just because someone's junk coin surged tenfold doesn't mean you should follow suit; in the long run, skills and tactics will beat luck.

7. Table Selection

Table selection: Would you rather play poker with a drunk billionaire or a poker pro? Find the game you can win.

In Cryptocurrency:

• I don't understand art and culture, so I won't try to speculate on NFTs.
• I excel in math and economics, which is why I focus on DeFi.

What are you good at?

8. Second Table Selection

Most people cannot make money in the crypto space. You're not dumb; your capital and full-time job put you at a disadvantage.

In Cryptocurrency:

Perhaps for you, the best game is to DCA into blue-chip projects and wait; it's a good way to reduce the difficulty of the game and win.

9. Small Gains Add Up

Many people get caught up in "heavy betting" and going all-in crazily, underestimating the profits accumulated from winning small hands.

In Cryptocurrency:

Don't get obsessed with finding 10x opportunities; the returns of stablecoin DeFi farmers and blue-chip stock investors often outperform those focusing on junk coins.

10. Be a TAG Poker Player

I'm a patient player, waiting until I have a good hand to go into beast mode, maximizing my win rate and minimizing my loss rate.

In Cryptocurrency:

I invest in far fewer projects than most people, but when I have confidence in a project, I go all-in.

Note: Texas Hold'em player types can be classified based on different characteristics as Tight, Loose, Aggressive, and Passive. TAG refers to Tight-Aggressive gameplay, Tight meaning playing fewer hands and waiting for stronger starting hands; Aggressive indicates a player who tends to bet and raise rather than call.

11. Look Further Ahead

Profits have their ups and downs; don't view daily events with a narrow perspective; the focus should be on the long term.

In Cryptocurrency:

• Stop checking your portfolio 25 times a day.
• You're driving yourself crazy.

12. Chip Management

No matter how well the game is going, there will be fluctuations and changes; managing your chips is a way to prevent bankruptcy.

In Cryptocurrency:

No matter how excellent a project may seem, there could be black swan events like rug pulls, hacks, or vulnerabilities; position size needs to be properly managed.

13. Salary Management

This applies to investments outside the crypto space as well:

• Have emergency funds to cover 6 months of living expenses.
• Have investments beyond cryptocurrencies, such as index funds.

I don't go all-in on cryptocurrencies, so I remain unusually calm every time the market crashes.

14. Single Bet Size

You need to wager an appropriate amount for each bet.

In Cryptocurrency:

• Don't bet the house.
• The pot in poker is equivalent to the allocation of your investment portfolio.

My position strategy:

• Maximum of 15% of the portfolio in a single protocol.
• Maximum of 5% in high-risk projects.

This ensures the safety of my assets.

15. Immediate Stop Loss

Right now, you have two Aces in your hand in the game, but someone might have a flush, and several people are all-in. This is when you should stop loss and fold.

In Cryptocurrency:

If a project that seemed promising turns sour, it's time for an immediate stop-loss and regroup for another day.

16. Addressing Flaws

Address your flaws in the game; for example, raising too many times before the flop can leave you completely exposed.

In Cryptocurrency:

• Identify the reasons for failure; will you mess up while chasing high APY? That's a flaw.
• Have you been scammed repeatedly? That's a flaw.

17. Learn Mathematics

Mathematics can give you an edge, such as calculating the odds of the total prize pool and expected value.

In Cryptocurrency:

Go learn about the impact of impermanent loss, tokenomics, market cap, and more. Fall in love with spreadsheets.

18. Dealing with Losses

You have a great hand, and the math is in your favor to win, but ultimately, you lose the hand. It happens, but don't let it have a cascading effect.

In Cryptocurrency:

The worst-case scenario is a rug pull; you may be angry, but don't let emotions lead to worse decisions.

19. Find Your Strengths

Poker is a PVP game; you must find and leverage your strengths. For example, improving your math skills or reading opponents more accurately. Poker games are purely skill-based; you can hone your skills.

In Cryptocurrency:

How to gain an edge in the DeFi space.

20. Gain Psychological Edge

Your success in poker and cryptocurrency depends on the quality of your thinking, so strive to gain a psychological edge:

• Exercise.
• Adequate sleep.
• Meditate daily.
• Avoid alcohol while playing poker or trading coins.

Train your mind as athletes train their bodies.

Conclusion

I don't want to sound too pessimistic, but making money in cryptocurrency is really challenging; many people in this field make money by telling you how profitable trading coins can be.

So, I'm trying to keep you grounded and humble; the first step to winning is survival. Summary:

• The psychological aspects of cryptocurrency trading are more significant than you realize.
• This is an unregulated space; you underestimate the power of whales.
• Learn math well.
• Crypto trading can be a PVP mode; be cautious if you are a beginner.
• Everyone has lucky streaks, but don't confuse them with skill.