I’m sure most of you have played a sport at some point in your life.
Whether you were participating in 6th-grade tee ball or Division 1 collegiate athletics, everyone should at least understand the sacrifices and difficulties of passionately applying yourself to any sport.
And the truth is, I largely view the stock market as a sport. It’s the greatest game in the world (with the highest stakes).
And just like in professional sports, only the finest athletes (traders) survive.
But not every trader approaches their strategy with the same discipline as they would a major sport … and this is a CRITICAL ERROR!
SPOILER ALERT: If you apply some of these athletic attributes to your trading, you might be pleasantly surprised with the results! And if you fail to embrace these similarities, that lack of clarity could lead to subpar trades and avoidable losses.
With that in mind, keep reading and I’ll show you eight ways Evolvers can learn from world-class athletes.
You’re going to love this…
Both trading and playing sports involve setting goals.
In sports, the goal is typically to win the game (or hopefully the championship).
While in stock trading, your goals need to be personally determined.
Since there’s no “Super Bowl” for trading, your success and goal-reaching in the markets are largely up to you.
And working toward financial goals only will inevitably leave you disappointed.
My advice? Don’t set financial goals. First, strive toward education and consistency by hitting singles.
Then, if you continue trading with discipline, your financial goals can potentially come to fruition.
Strategy and Tactics
Both activities require strategic thinking and the use of tactics.
In sports, players need to develop game plans, analyze opponents, and make split-second decisions.
Sound familiar? That’s because traders need to do all the same things…
In the market, you develop trading strategies, analyze market trends, and make immediate decisions based on all of the available information.
So, while the specific strategies and tactics involved in sports and trading are completely different, the mechanism through which they’re achieved are almost exactly the same.
Physical Risk vs. Financial Risk
Both traders and athletes must balance the concept of risk and reward.
Think about it…
In sports, players take physical risks to score points or win the game.
How many times have you seen a player hurl themselves toward the basket, or into the endzone, completely disregarding their own body in hopes of scoring the points?
Now, consider the risks in trading…
While you’re probably not gonna tear your ACL trading at your computer (unless you’re an extremely intense scalper), you must take financial risks by buying stocks or options with the hope of earning profits.
The Spirit of Competition
In sports, players compete against each other to win matches or championships. This is the entire concept of athletics.
But some traders seem to lose sight of the fact that they’re going up against other traders.
Trading can deceivingly seem like a game against yourself for the most part.
But make no mistake … just like an athlete, you’re competing against every other trader on the planet.
If you don’t work hard to become more competent than your competition, you’ll eventually get smoked by those who do.
Performance Under Pressure
To be a world-class trader or champion athlete, the ability to perform under pressure is paramount.
In sports, athletes face high-pressure situations during critical moments of a game or competition.
Think about a player sinking a buzzer-beater three-point shot at the end of a playoff basketball game. Or a soccer player scoring the tie-breaking goal in the 87th minute of the World Cup Final.
EXAMPLE: My favorite athlete of all time, the incredible Manu Ginobili of the San Antonio Spurs, was a prime example of delivering clutch performances under pressure throughout his illustrious career.
Similarly, stock traders need to manage their emotions effectively in volatile market conditions to make quick (and correct) decisions.
Bottom Line: Trading your hard-earned money will naturally put you under pressure.
But it’s how you perform under said pressure that will determine your long-term success (or lack thereof) as a trader.
Teamwork and Collaboration:
In team sports, players work together, communicate, and coordinate their efforts to achieve a common goal along with their coaches and coordinators.
On the other hand, trading is mostly an ‘individual sport’…
You sit by yourself in a room full of screens, waiting for that perfect opportunity to strike.
But eventually, after learning the fundamentals, every trader needs some help and support.
This is exactly why I started my Discord server … so that Evolvers can start treating their trading a bit more like an all-star sports franchise.
WARNING: This doesn’t mean you shouldn’t do due diligence or have unique convictions!
Team trading is simply a way for you to get feedback on potential setups, trade ideas, entries, exits, and catalysts.
Adaptability to changing circumstances is critical to success in sports and trading.
In sports, teams or athletes must adjust their tactics during a game based on the opponent’s strategies or changing game conditions.
Think of a golfer’s bag. PGA pros carry many different clubs and pull out the best one for each specific hole or situation.
Traders should prepare in the same way by developing a multi-faceted bag of trading tricks.
Years ago, I adapted to a changing market by learning to trade options. And it turned out to be the single most important thing I did to evolve my trading strategy.
But that’s just one example of adapting. If you continue to work hard, you’ll find the adjustments you need to make to have longevity in the market.
Bottom Line: Like golfers picking a new club, stock traders need to be willing to adjust their game plans in response to market fluctuations and changing price action.
Both trading and sports involve analysis, research, and most of all … performance evaluation.
In sports, teams study opponents’ strategies, review game footage, and analyze statistics to gain a competitive edge.
Individually, players are assessed based on their personal statistics and performance in specific games.
Similarly, stock traders evaluate their performance based on their investment returns, risk management, and the achievement of financial goals.
Financial statements, market trends, and economic indicators are also commonly used by traders to make informed strategic decisions.
There are more similarities between sports and trading than most people think…
Start embracing the strengths of world-class athletes in your trading…
Who knows? You might become a better trader by doing so!