For Father’s Day this year, I am taking my Dad to the US Senior Open in Sacramento, California. As much as we both enjoy and love golf, I can’t help but find similarities between trading and golf. I find myself using four letter words when golfing, and equally as often as trading. I find myself throwing clubs equally as often as I throw wadded up paper at my trading screen…or at least wanting to. The fact is, golf and trading share many similarities, and equally as many differences.
The parallels certainly don’t end at drinking and swearing. Think about it for a minute. Why do so many people like to play golf, despite being completely horrible at it, having no true understanding of the game or any kind of formal training? Is it recreational fun? Is it because it’s trendy? Whatever the reason each person chooses to pick up their clubs, it isn’t because they are a pro going out to make a living…statistically speaking. The same is true with trading. Having run a day and swing trading chat room for traders and been a part of the trading world for a decade now educating new and experienced traders, I can say that many of them get started to get rich…quickly. Sadly, 90% of those traders fail and move on after having blown up their accounts.
What can sports and the stock market have in common?
When I started trading, I could not make money if my life depended on it. I wanted nothing more than to make money and get rich…quickly, like all the other people on Wall Street I saw doing it. It took nearly three years for me to finally say, ok, this isn’t easy. I had learned dozens of strategies, indicators, tips and tricks. Similarly, when I took up golf, I wanted to be a scratch golfer and not someone who struggled to break 100 every time I played. I was always good at everything in my life, and if I sucked at something, I worked hard until I was the best at it that I could possibly be. It wasn’t until I was golfing with an older man one day that I realized my whole thought process and perspective on the subject matter was wrong. It is fine to want to be good at something and to struggle in the pursuit of success, but not everything can be improved with simply more practice, time and dedication.
Every once in a while, you have to take a step back, a big step back and evaluate your process. If you aren’t seeing incremental improvement on your own, through your own process, practice and current methods, it is time to consider something else. Tunnel vision can affect traders in the worst way. They get the deer in the headlights syndrome and lose the objectivity required to make logical, rational decisions about trades. Nothing is more frustrating than losing money in the markets and sucking at golf. But, one thing is certain; getting emotional and irrational is not going to improve either.
Make the necessary adjustments and stay in control!
When I finally stopped trying so hard in golf, I saw a noticeable drop in my handicap as my game began to improve. It took a long time, but once I stopped focusing on what I was doing wrogn, and started paying attention to what was working and what I was doing right, my game got better. I enjoyed playing more and undoubtedly, people appreciated me not blowing up after a bad shot. It happens, you will hit bad shots in golf, the pros do it, I do it, we all do it. Trading is no different. You WILL have losing trades, but if you spend more time focusing on what is working and making you money, not only do you put yourself in a better mental state to continue, but you also enjoy what you are doing that much more.