Introduction

When I got introduced to poker, I was highly fascinated by something called the Game Theory Optimal (GTO) strategy. In short, the concept of GTO (in the context of modern poker) is largely about creating a strategy that gives you the highest outcome on the long term. Those last two words are extremely important and easy to overlook. In poker, trading and actually throughout your whole life, it can be very rewarding to keep this mindset present with every decision you make. By doing this, in the ideal situation, you can never regret a decision you made, but still be disappointed by the outcome. This works for poker (you get it all in with the best hand and the highest chance of winning, but due to luck the other person wins the pot), for trading (you made a trading decision based on your own well-thought predictions) or for life in general (from helping a friend to making a educational decision which turns out to be the wrong one). Since the intention of this post is not to teach one how poker works, I will not go into detail about optimal decision making in poker. However, you might find it interesting to know how this poker theory actually changed my life in several ways.
The concept of basing any decision on the long term Expected Value (EV), is one that should not be interpreted in a mathematical way only, but it is one that should be interpreted the way you think it should be interpreted. I know this is kind of vague, but the idea behind it is a strong one.

Examples

1. Poker

If you are serious about playing poker, you can not avoid at least some concepts about game theory optimization or terms as Expected Value (EV). In poker, every decision you make should be the one you will make a 100% of the time in that situation and, regardless of the outcome afterwards. Every decision you make should result in the highest EV in the long term. This means that you should have no hard feelings about the decision itself if it turns out to be the wrong one (you lose the pot). However, you can ofcourse be disappointed about the outcome. Keep in mind that those are two different things! A small simple example for one that is interested:

Player A has two aces to begin with (the best possible starting hand in poker) and Player B has some random hand like pocket eights (two 8's). Player A knows he has the best possible starting hand, so he wants to make the pot bigger. Player B thinks that Player A is bluffing and goes all in (he puts all his money into the pot to scare Player A). At this point, Player A has to put in the same amount of money as well and should do this a 100% of the time. Before any cards are dealt on the table, Player A has about 80% chance to win the pot. Suppose the pot is $400, the Expected Value for player A is (80% x 400$) is $320, regardless of what the outcome is. However, 2/10 times this scenario happens, Player B will win by luck.
If you are Player A, you can be disappointed with the outcome, but you cannot regret your decision to put your money in with those aces! In the long term, you will make money by making those decisions.

2. Trading (crypto-currencies as well)

The same applies to trading (or investing in crypto-currencies). A trader wants every decision to be the most profitable one in that particular situation. The only way to become a long term winning trader (about 10% of all traders is a long term winning trader), is to base every trade on your specific 'reads' on the market and to be confident that it will be a good trade most of the time. This ofcourse does not mean that you will become a winning trader in the end, but the mindset should be there.

3. Life

This ofcourse sound a bit too easy, 'just make the right decision every time in the long run'. However, in life I find that this helps me every time I face a decision, regardless of how important this decision is. This does not mean that you should make every decision rational instead of emotional, but it prevents having an inner regret about it afterwards, if the outcome turns out to be 'bad'. For example, if you chose to quit your job to begin your own business, but it results in a liquidation and you going back to work, you can be disappointed about the outcome, but you can have no inner regret about the decision to quit your job! A lot of people apologize too much as well. If you make a certain decision, to help a friend or not, and you made this decision after you thought about it for a good while, you should not apologize every time it turns out that your friend is disappointed or something goes wrong. You made that decision because you thought it would be the best one at that time, and you should take responsibility for the outcome, whether it is positive or negative. Again, being disappointed with the outcome and regretting your initial decision are two different things. If you can manage to be confident that your decision at that time was the 'right' one, you will find yourself being much more confident overall.

The reason for this post is that I see so many people constantly regretting earlier decisions ('what if, what if'), not realizing that the decision was the 'right' one for them at that moment, which is the only thing that counts.