Psychological coping strategies when working in high-volatility environments

This is my first post at the IndexCoop, I am a new member who is very impressed by your work and your team spirit and has just bought into the coop as well as its indexes with a longterm “buy and hold” mindset. My personal background is non-DeFi, non-crypto, non-financial (and non-native w/ regard to English), so I am that quintessential retail customer you are going to deal w/ a lot more in the future, which is why I first thought I personally had nothing of value to contribute to the Coop and its members.

However, having listened to some of the podcasts and having read some people’s posts during the recent market turmoil, I suddenly realized that I do have some expertise (and ample experience) in a crucial area that, at least from what I have gathered, some otherwise super-sophisticated people in here seem to be approaching in a non-professional way or at least may have a somewhat underdeveloped understanding of in terms of how to deal with it.

Put simply, I think that I could offer and put together some helpful insights into how (successsful) people who work in other high-volatile environments try to deal with the ongoing psychological distress and all the battery of emotions involved when losing (and winning) a couple k USD on a day-to-day basis because it is a natural part of their job. In other words, I would want to answer this question for you: How can you train yourself to feel less and less emotionally involved when volatitly occurs and, most importantly, stay or become a happy person despite these emotional challenges#.

I am not sure whether or not you are interested in this at all, which is why I am putting this out to wait for people’s response. So why would I be qualified to give advice? I am a former professional high-stakes online poker player. Since I assume that most of you have no clear conceptual understanding of what makes a professional online poker player a winner (and what their job looks like/what the challenges are), here is a quick breakdown in generic terms (I think you will see the parallels yourselves):

  • they spend thousands of hours away from the tables alone at their computers modelling certain in-game situations; they use advanced computer programs and mathematical concepts such as AIs, GTO theory etc to get there (=research, training)
  • this way, they develop an extremely sophisticated and theoretically profuond understanding of the game, i.e. they are like 20x smarter when it comes to decision-making at the tables than some of the casual players they will later on play with
  • they then meet these casual players at the tables and play with them, yet routinely lose high sums of money to them even though they know so much more about the game (in the short term and even in the medium term, but not in the long run)
  • competition amongst professionals is fierce, and only a small % of players actually make money in the long run; some very smart people end up losing $$
  • because volatility is so high, eveyone, even world-class players face long stretches of making no money (“breaking even”) or even losing money (“downswings”) that can lasts for several months and sometimes even longer
  • there is no objective way in terms of money/results to truly assess how well a player’s decision-making process has been over a given amount of time (i.e. the actual money outcome is a bad predictor)
  • in the end/in the long run though, professionals are rewarded with fairly high incomes/winnings, oftentimes “having made” most of their money in only a couple of (super-profitable) poker sessions

All of this causes huge ongoing emotional distress, because you oftentimes feel like “things are unfair”, “there is no reason why this should happen to me”, “I know so much more about the game and yet I constantly lose”, “I should be up by now, having invested so much time and money”, “Is it all worth it?” etc etc.

In fact mastering the emotional aspects of the game is the most challenging aspect. This is what differentiates world-class players from mediocre players. (When I say world-class player, picture a clever guy like Gary Kasparov or Magnus Carlsen in chess and couple that with Obi Wan Kenobi, cause that is what they are doing in their minds w/ regard to processing and emotional coping).

The take-away: A lot of people in (professional) poker who tend to fail or dont realize their true potential are math whiz kids who underestimate the emotional challenges and make bad decisions when things are not going their way (“tilting”). Even among the successful players, emotional suffering is extremely common, people tend to get involved too much and as a result are a less happy person than they could be.

But there are proven strategies that help individuals cope (better) w/ all of this.


Hey thanks for posting, I think this is a great idea and at the very least it would be great to have a follow up on the forum with some of your learnings from playing poker at a high level.

Do you think you’d be able to link it to investing/index products more generally? Perhaps there is potential to put this out as an Index Insights piece on our Substack, that can useful for the crypto community more widely.

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Hi, I’ve actually just written a (simplified) article on the most common trading biases in crypto (Behavioural biases_investing - Google Docs). I think your experience/knowledge could be a very interesting follow-up on this as it sounds like you have a lot of valuable information on the subject. Would be keen to team up and work on this!


This is awesome - I really like this perspective. In my opinion this is even more useful for the contributors working on our protocol than just for investors. IC can be an extremely fast and intense work environment (part of the reason we love it :joy: ) . This is a very new type of work, we need grow comfortable in a completely digital environment with very high stakes.

I echo @DarkForestCapital I would love to hear more thoughts and lessons that you have from your career. That sounds like a great starting point.

hey, thanks for the positive feedback; I think my best bet right now is to educate myself about the coop as well as your ecosystem by attending a welcome call, among other things, really think this through and structure it in a way so that you guys can benefit most from it. So I am not gonna rush it. As I said, atm I have a somewhat limited understanding of a lot of things that are going on in here and I think the coop could profit from this more if I familiarize myself a bit more before posting stuff. I could potentially go super-deep on this, only I would strive to really want to make it as relevant as possible for you. Also, I want to say that I work full-time and I have got 2 kids, so I am realistic w/ the amount of time that I can put into it: it’s very limited. Still, I will eventually follow up on this, only it will take some time.

I have read your article, Ela, and I really like it; the similarities between your space and where I come from are very striking, so I agree that the type of input that I might be able to offer could be a valuable follow-up. It would also be different from yours because your findings are more theoretical/academical (all of the biases apply to poker as well btw), whereas I’d have some hands-on practical things to share that have worked for me and others.


Hey @prollyjustlurking, I see some early consensus here that your experience would be very valuable for us to learn from. I certainly second that view.

Without rushing you and understanding your time constraints, I suspect that any one of the more senior owls will be more than happy to jump on a call and answer your questions about the Coop to get you up to speed a bit quicker.

If that would be helpful, now or in the next few weeks, feel free to reach out on discord either directly (my username is verto0912#9189) or in one of the channels.

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Will reach out to you on discord tomorrow at the latest by DM. I have no public writing rights there yet and would prefer to pitch a rough idea for a roadmap and the types of high-value input that I think I will be able to eventually deliver on a 1:1 basis so as to not distract too many people.

Also, I have some privacy concerns so this type of communication will suit me perfectly for now. Just a quick teaser: my day job heavily features breaking down complex stuff for various people and making it clear to them why it matters more than they thought, so in terms of skills I should totally be able to pull this off.

did you go to the #start-here channel and react with the owl? :slight_smile:


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