Chess vs Trading

People often start threads such as..

How good will I get in a year?

How much will I need to make a living?

Is it possible to be successful straight away?

etc etc

I was today think of trading and the correlation between successful traders and chess players. And what it takes to be successful.
I'm quite a novice at trading (probably 6 months online - ultimately unsuccessful) and a few months of study (more recently).
I've been playing chess on and off for about 25 years. I have about 60 books on the subject and over 30 DVD's. I represent my city and have represented my county. I've even had a little success in a few tournaments.
I would class myself as a good amature (a good club player).
Worldwide chess has a grading system that orders the players into different catagories.
Super Grandmaster
Grandmaster
International master
Master
club players
Right down to people that can play but can offer no ryme or reason why they made a particular move.

In some ways you could have the same kinda grading system for trading.
Now i'm not saying do this in anyway - I'm just saying it makes it easier for me to see where I am on the scale as far as trading is concerned. And more importantly it helps me to see what is a realistic level I could advance to.

I'd say i'm currently somewhere between the bottom two levels (probably closer to the bottom).

I the world of chess SGM win most of the bigger tournaments.
GM's travel the world earning a living from playing and producing books/DVD's seminars
IM's simlilar to GM's (with a little less reputation)
Masters win the odd tournament and often teach (usually kids) and usually have a day job
club players tend to play for fun but some will teach chess (depending on standard)

The point is money is made from playing/teaching chess and I see it the same as trading in some ways.
Where do you see yourself on this list as far as trading is concerned?

The main point of this thread is to suggest that although it is possible to make a living from trading (just like a teaching club player or master) but the challenge of becoming the ultimate trader is a bridge too far for most of us. I'm not saying we shouldn't strive to acheive and become the best we can or even to give up and not even try. What I'm saying is realistic targets are the way to go.

In all my years of chess, all those thousands of hours of study I have never been able to even get close to Master level. It may be like that for traders.

You wouldn't take up chess and within a month expect results equal to a Grandmaster and neither should we think this way in trading.

What do you all think?

This might be going off at a slight tangent, but I have traded for a living full time since 1999 and also play chess (not at the same time...).
The skills sets are different, for example emotional involvement and decision making and execution are worlds apart.
Richard

Don't think there's any co-relation between being good at chess and being good at Trading.

Trading is nowhere near as demanding as chess.

All this hoopla about chess and trading is generated by some crazed traders and media who want to hype up trading as being something which only the very intelligent can succeed at.

Rubbish.

In fact I might add that the more intelligent you are the more chances you will fail.
Its called as Anaylsis-Paralysis.

All Trading needs is tough mental control - "discipline" and a military like approach to risk/reward.

Some basic math skills do help.

Simple.

chilltrader said:

Don't think there's any co-relation between being good at chess and being good at Trading.

Trading is nowhere near as demanding as chess.

All this hoopla about chess and trading is generated by some crazed traders and media who want to hype up trading as being something which only the very intelligent can succeed at.

Rubbish.

In fact I might add that the more intelligent you are the more chances you will fail.
Its called as Anaylsis-Paralysis.

All Trading needs is tough mental control - "discipline" and a military like approach to risk/reward.

Some basic math skills do help.

Simple.

Click to expand...

I don't think you can correlate intelligence with the 'amount' of analysis someone does, in fact I'd say the opposite was the case.

Sorry if I wasn't to clear and also sorry that it's a bit garbled (just read it back).

I wasn't saying chess was anything like trading.
I was just saying that the dedication required to reach certain levels of chess/trading could be viewed as similar. Albeit different approaches/skills needed.

If I played a GM at chess - he would beat me everytime.
If i sat in a room with an ulimate trader (with the same money and a computer) he would be more successful everytime.

Well... I have definitely seen people those tend to over-analyse being the ones who either deem themselves to be "above average intelligent" or are deemed by others as above average.

Can call it peer pressure

I think there are parallels with trading and chess, but they do not extend throughout the whole fields... being good at chess, or playing chess, does develop some mental skill sets that can be helpful to trade, with some trading strategies benefiting more than others - for instance, a Spread trader might easily be able to go through his net positions in a series of complicated trades if he had an experience of "thinking 3 moves ahead", or a fundamentals trader weighing up many factors and isolating the most important ones and their impact on the environment (i.e. the price of teh security or the positions of the pieces).

However, I would consider each of these skill sets to come under the umbrella term of "analysis" rather than "trading" as a whole. Of course, analysis is a subset of trading, but certainly not the extent of it. You can draw comparisons between Chess and Analysis (and there are rankings for Analysis, e.g. the Extel awards), but, IMO, this does not encompass the whole of what it means to be a trader. In fact, analysis and trading are in many ways polar opposites.

Of course, how else can you rank traders? by PROFITS**.

**lets not get into risk adjusted returns, or scaleability, or anything like that.

I love playing a bit of chess and think there are some good skills that can be linked e.g the importance of protecting your pieces ( money) while always looking for the opportunity to capitalise by taking your opponents....ummm the importance of review like how to really excel you have to keep a note of how you played go over the games and continuosly evaluate how you performed and how by making different decisions the outcome could have been more favourable.... also by going over the games of the grand masters and replaying them yourself thinking about each move could be likened to learning about the strategies and techniques of market wizards.

heres an interesting link though for the flip side of the argument :
Exposed: chess genius who lost his bank $1.8bn - Americas, World - The Independent

and msn chess is a great place to play a bit while trading to get you set for the day and as a bit of distraction when your trying to sit on a profit

Chess - MSN Games - Free Online Games

(cant seem to get my rating past 1700 though like trading i think the competion gets much tougher the further you get )

(you can also play for cash on it which Im planing to do with a chess program running in the background ofcourse )

klastica said:

Now i'm not saying do this in anyway - I'm just saying it makes it easier for me to see where I am on the scale as far as trading is concerned. And more importantly it helps me to see what is a realistic level I could advance to.

Click to expand...

And therein lies the problem - why do you feel the need to measure against other people when empirical evidence such as profit, Win%, Risk:Reward ratios, etc are there to be improved upon through constant learning, practise, assimilation?

klastica said:

The main point of this thread is to suggest that although it is possible to make a living from trading (just like a teaching club player or master) but the challenge of becoming the ultimate trader is a bridge too far for most of us. I'm not saying we shouldn't strive to acheive and become the best we can or even to give up and not even try. What I'm saying is realistic targets are the way to go.

Click to expand...

And this is just in psychological terms, your projection. Realistic is based upon the individual. Group positioning within some arbitrary/exact measurement based system would miss the point imho.

I understand the sentiment btw, I think it's an interesting post though that reveals more about you than anything else.

dilesh23 said:

I love playing a bit of chess and think there are some good skills that can be linked e.g the importance of protecting your pieces ( money) while always looking for the opportunity to capitalise by taking your opponents....ummm the importance of review like how to really excel you have to keep a note of how you played go over the games and continuosly evaluate how you performed and how by making different decisions the outcome could have been more favourable.... also by going over the games of the grand masters and replaying them yourself thinking about each move could be likened to learning about the strategies and techniques of market wizards.

heres an interesting link though for the flip side of the argument :
Exposed: chess genius who lost his bank $1.8bn - Americas, World - The Independent

and msn chess is a great place to play a bit while trading to get you set for the day and as a bit of distraction when your trying to sit on a profit

Chess - MSN Games - Free Online Games

(cant seem to get my rating past 1700 though like trading i think the competion gets much tougher the further you get )

(you can also play for cash on it which Im planing to do with a chess program running in the background ofcourse )

Click to expand...

As long as you understand that your chess program will be playing for cash against someone else's chess program

yeah i suspect so and those times the chances of winning will be about 50/50... but on those wonderful opportunities when its a human on the other end it might just be worth the risk where theres a will theres always a way

dilesh23 said:

yeah i suspect so and those times the chances of winning will be about 50/50... but on those wonderful opportunities when its a human on the other end it might just be worth the risk

Click to expand...

They do have moderators that boot you too.

Basically klastica I would strongly advise against posting anything that might be construed as original thought on T2W.

Skill Leverage said:

Basically klastica I would strongly advise against posting anything that might be construed as original thought on T2W.

Click to expand...

Thanks Skill Leverage, advice taken. :cheesy:

Superior chess players may make good analysts, but likely poor traders. Paralysis by analysis will eat them up.

no comparsion, a better comparison would be chess boxing, anyone seen that? You have a game of chess then a fight, nice.

covered_call said:

Superior chess players may make good analysts, but likely poor traders. Paralysis by analysis will eat them up.

Click to expand...

I couldn't disagree more. With the study that a superior chess player would do(cos they know how to study) one area that they would cover would be this potential weakness (Paralysis by analysis). They would make their weakness their strength. This is what great chess players would do.
I'm not saying all chess players would make great traders, there's more to it than that. But to over generalize and say 'likely poor traders' is wrong IMO.

Personally, I think there is more correlation between the game of Poker and trading: the psychological aspects of winning and losing money, the ability to weigh up risk/reward, an understanding of probability, money management, the ability to cut losses quickly, an understanding of where your edge comes from; these all play a big part in being successful in both disciplines.

Oh, and 95% of all poker players lose money.

PokerBrat said:

Personally, I think there is more correlation between the game of Poker and trading: the psychological aspects of winning and losing money, the ability to weigh up risk/reward, an understanding of probability, money management, the ability to cut losses quickly, an understanding of where your edge comes from; these all play a big part in being successful in both disciplines.

Oh, and 95% of all poker players lose money.

Click to expand...

I set up the thread to suggest a similarity between the pains great chess players and great traders go to for success. And I was wondering whether a grading system (although never published) would be a way of looking at where you stand in the grand scheme of trading.
Are you a Super Grandmaster?
Are you a club player?

But I totally agree that poker and the skills needed are very similar

YouTube - London ChessBoxing Club on London Tonight

might go give this a try it looks pretty fun