Since my trading has been really bad lately and football has been absolutely dreadful for me (thank goodness the season's almost over) I started playing some poker again.
I've gone back and forth between playing short stacked in a higher stakes game and buying in for the full buyin in a lower stakes game. The general rule is that you want to buy in full and play at a level where your bankroll can take a lot of hits. The advantages of the full buy-in include the ability to really play a post flop game and the ability to maximize your profits when you have the opponent drawing thin.
However, there are still some advantages to playing short stacked in a higher stakes game. First, I find that in online poker, higher stakes players are actually worse than lower stakes players up to a certain buyin level. Second, by being short stacked, there are less post-flop decisions and you can often pick off players who are trying to build the pot with weaker starting hands.
I'm sure there are more pros and cons for either style, but the main thing that I've come to realize is that whichever style and strategy you're playing, it is more important to be clear about the strategies and stick with them. For example, if you're playing NL Holdem and you bought in for the minimum, you should refrain from playing a lot of suited or connected hands, especially if you are not the aggressor or you are out of position. People play these hands because if you hit your hand, you may take down a big pot. But because you haven't bought in for the full amount to maximize the pot in case you hit, the expected value of playing such hands goes down dramatically.
The above point is something that is probably pretty well known. The point I want to make now is a little different and I frequently see people doing the opposite of it. I feel that if you're playing short stacked, you need to leave the table as soon as the stack has grown. Whether it be double or triple the short buyin, there needs to be a limit set. I've seen too many people buy in for the minimum, build it up pretty well, lose it all on one hand, then buy in for the minimum again. The problem that many people don't see is that even though that one loss probably was a bad beat or something, it's still well within the percentages. Using one of the examples I frequently talk about, let's say you're playing a guy who always goes in against you with an underpair. You're pretty much favored against him 4-1 all the time. The problem is you're going to lose 1 time out of 5 and if it happens after you've been building your stack pretty well, you'll be negative overall even though you're a huge favorite. So if the plan is to play a short stack strategy, then you need to stop it once the stack is no longer "short".
I also feel that this concept of sticking with the original strategy is useful in trading. I find that even though I make a trade based on a short term catalyst, I will try to make more on it than the original expectancy based on the catalyst, and end up with no gain. Conversely I will make a trade using a long term catalyst and end up taking gains too quickly and not maximizing the profit on the trade. Hopefully I will learn this lesson and apply it both to poker and trading.