5 Poker Tips That Can Help You Succeed in Crypto

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With over two centuries of strategic gameplay, poker offers valuable lessons that can be applied to the cryptocurrency sector.
Poker and crypto share a lot in common: the analysis of played cards (or past trades), the constant need to take calculated risks, and the virtues of patience and persistence. Thus, it's unsurprising that numerous accomplished crypto players once honed their skills at the poker table.

Take, for example, Bryan Pellegrino, CEO of LayerZero who began playing poker at 15. Over his professional journey, he amassed $500,000 solely from World Series of Poker tournaments.

Follow the Big Player

In poker, the player with the most chips holds the upper hand. They frequently participate in hands, even with weak cards, employ bluffs, and exert pressure on opponents by making substantial bets. Those who stop resisting and learn to play in their direction (accumulating chips from weaker players) will come out on top. 

A similar dynamic unfolds in the crypto sector: market makers possess massive capital and open positions dwarfing those of retail traders by hundreds of times. These whales manipulate the market, enticing small players into disadvantageous positions.

According to conspiracy theorists, whales "paint" long and short signals on charts, manipulate price movements around news releases, and have advance knowledge of Elon Musk's tweets. The market maker's objective? Triggering stop-losses (the forced closure of positions at a loss) for ordinary traders.

Traders' stop-loss orders, which the market maker "hunts" for, illustrated by BTC/USDT. Source: hyblockcapital.com

Regardless of your endeavor – whether trading, engaging in retroactive activities, or investing in ICOs – abide by poker's cardinal rule: follow the lead of the big players.

How you follow suit depends on your activity:

  • Trading. Keep an eye on volume indicators, order books, and price action. Volume surges, large buy or sell orders, and candles with long wicks are telltale signs of whale activity. Dive deeper into the Smart Money Concept and Market Profile to gain a better understanding.
  • Airdrops. The goal of a retro hunter is to efficiently execute activities within the right project. Identify wallets that received substantial airdrops from Arbitrium, Uniswap, StarkNet, and other leading projects. Emulate their actions.
  • Token sales. Use on-chain analysis to uncover token sales backed by Tier 1 funds even before their official announcement.

Furthermore, on-chain analysis can help identify meme coins and track capital flows between assets using the Nansen platform.

Exercise Caution with Advice

You never know what to expect from your opponent: they might be telling the truth, bluffing, or trying to confuse you. That's why, when a poker player hears advice at the table, they tend to ignore it. Nobody wishes them success, especially when money is on the line.

The dynamic between players at a poker table differs from that among participants in the crypto market. In poker, everyone is an opponent, while in crypto, your primary opponent is yourself. However, there are third-party influences, such as influencers.

Many of those offering you free advice may not do so out of pure goodwill: influencers, for example, might have personal interests in recommending new projects. Therefore, when it comes to finances, always conduct your own research.

Statistics Trump Intuition

Novice poker players often deviate from their strategies, thinking that "this time it will be different" or relying on their lucky card or intuition. While intuition does exist, it takes years before one can rely on it. 

Intuition often leads to aggressive plays of "pretty" hands like AK (Ace-King). However, in the long run, such an approach is detrimental. For instance, going all-in preflop with less glamorous QQ (pair of Queens) is stronger than AK in 57% of cases. The player with AK wins if either an Ace or a King appears among the community cards.

Poker players use Expected Value (EV) to evaluate the profitability of their actions. EV considers the probability of both positive and negative outcomes of a hand, as well as the potential levels of loss and profit. If the EV of an action is greater than 0, it means that such behavior will yield a profit in the long run.

The most straightforward application of EV in crypto is the mathematical expectation of executing a trading setup (a set of rules for opening a trade). To calculate it, you need the following information:

  • Probability of executing the setup.
  • Average Risk/Reward ratio of positions opened according to this setup.

For example, if the probability of executing the setup is 60%, and the average RR is 1:3, then the mathematical expectation of the setup will be as follows: 0.6*3 - 0.4*1 = 1.4 R. By trading in this manner, a trader's profit in the long run will be 40%.
The Expected Value of Positions with Different Risk-Reward Ratios and Win Rates. Source: reddit.com

The Expected Value of Positions with Different Risk-Reward Ratios and Win Rates. Source: reddit.com

It's crucial to close all positions either in profit or in loss, and with the same level of risk.

To gather statistics, traders conduct backtests, evaluating the probability of executing a trading strategy in the past. This can be done manually or automatically.

In the first case, a trading simulator is required (available through paid subscriptions like TradingView or FX Replay). In the second case, it involves creating and configuring an automated algorithm.

Control Your Emotions

Even if you've never played poker, you've likely heard of a "poker face" — an expressionless look that hides your true emotions and helps you control them.
Mike McDonald’s poker face. Source: assopoker.com

Mike McDonald’s poker face. Source: assopoker.com

Success in the crypto industry is tied to your level of self-control and your ability to make decisions based on concrete system signals rather than personal emotions.

Here are some strategies to help manage your emotions:

  • Dollar-Cost Averaging (DCA). Investing a fixed amount at regular intervals reduces emotional stress during both price rises and falls.
  • Setting Loss Limits. Determine your loss thresholds in advance. This is important for both trading and retroactive activities.
  • Mental Health Practices. Meditation and deep breathing can help you manage emotional stress.

Even the most seasoned crypto traders experience emotions. However, unlike beginners, they know how to control them. If you feel the urge to recover losses or are taking unjustifiable risks, take a step back. Sometimes, doing nothing is the wisest decision.

Follow Bankroll Management Rules

A bankroll is the capital allocated for playing poker. Typically, it's equal to the value of 100 buy-ins. For example, if a player participates in tournaments with a $500 entry fee, their bankroll should be at least $50,000.

This way, the player allocates only 1% of their bankroll per tournament, diversifying risks. Even if they lose 10 tournaments in a row, they still have funds to continue.

Similarly, crypto activities require money management:

  • Trading. Allocate 1%-2% of your capital per position, and do not exceed daily or monthly loss limits.
  • Investing. Distribute funds based on the project. For example, allocate 20% of your capital to BTC and no more than 5% to altcoins.
  • Retroactive Activities. Distribute capital based on project tiers. For Tier 1 projects, allocate up to 10%; for Tier 2 and above, allocate 5%-7%.

The money management strategies described above are general guidelines and not absolute truths. Define your diversification strategy based on your deposit, the current market phase, and trends.

Additionally, keep enough USD on hand for unforeseen losses and create a financial safety cushion to cover your basic needs for 6–12 months.

Final Thoughts

Professional poker offers many strategies applicable to crypto. However, these five are among the most effective. We hope they help you succeed in your cryptocurrency endeavors.

Vlad Vovk
Writes about DeFi and cryptocurrencies from a technological perspective.