Professionals at the top of their fields maximize their psychological resources. Professional athletes have known this for decades, and top traders are learning that consistent performers are in top physical and mental shape. Winning is all about having the right mental edge. We’ve all observed how this works on the playing field. Football teams with the proper mindset can turn a 21-point loss in the first half into a win, even if it means scoring a winning two-point conversion in the last 20 seconds the game. Other teams can’t recover if they don’t build momentum in the first half. They drop the ball, throw an interception, and lose ground as the clock ticks away. Having the proper mindset can help you win the game of trading. This is true for playing sports as well as investing.
You’ve got to have the right mindset to trade profitably, day after day, and come out with a winning record, even when market conditions change. Many of the traders in the Innerworth Master Interview series are former college or professional athletes, who see a connection between trading and sports. For example, Scott Shellady, a Chicago-based trader and former University of Colorado Buffaloes football player says, “a lot of this relates to athletics.”
“You have to analyze what you’re doing wrong” “Sometimes it can be the market and sometimes it can just be a little bit of bad luck, but at the end of the day, you have to take each day separately and try to steer clear of sticking them all together and saying, ‘Boy, I’ve really stunk in the last 10 days.’” Andy Bushak, a former Cleveland Browns’ linebacker equates trading to preparing for a football game: “The whole week you watch game films of the other team. You look for tendencies. You practice.
When it comes to game time, you don’t have to think. You have to react. Trading works the same way.” Christopher Tate, a trader based in Australia, sees trading as analogous to surfing. “You don’t know when the next wave will come, but you know one will come eventually. When the right wave comes along, you need to be ready to ride it, take advantage of it, and make a win.” What all of these traders know is that stock analysis alone will not make one a winning trader. One must be ready physically and mentally to be a winner.
Andy Bushak, who offers seminars to traders through Advanced GET, has noticed that former athletes tend to make good traders. It’s probably because they are used to sticking to a game plan, recovering from setbacks easily, and are comfortable acting on their perceptions. They don’t second-guess their decisions and actions. Instead, they get some key support and resistance levels, come up with a plan, and go into the markets to see what patterns and setups are consistent with that plan.
When they see a setup that will work with their plan, they act decisively, without hesitation or doubt. Since they have the protection of their capital through proper risk management, they are not worried if they make a mistake. They can recover quickly and take advantage of the next opportunity, or “ride the next good wave” to use Christopher Tate’s surfing analogy. It’s useful to think about how trading is similar to playing a sport. Considering these similarities and applying them to your trading style may help you improve your trading performance.