In many ways, trading is like a sport. Not just because it gets competitive, although that’s certainly a big factor. (There’s a Trading World Championship, after all!) The mentality you have to bring to trading is much like the mentality one must bring to a sport. Here’s what I’m talking about.
Practice your game
No sports success got that way overnight. Michael Jordan didn’t decide one day that he wanted to be in the NBA and then just turned into the best overnight. Just like all the other greats of any sports, Jordon puts years of blood, sweat, and tears into becoming the best. The same goes for a lot of life’s pursuits. If you want to succeed in something, you have to be good – and you need to work to get good at anything!
Is practicing for trading going to involve blood, sweat, and tears? Well, I doubt it will be that vigorous. Maybe you’ll break into a nervous sweat now and then, but it’s unlikely. That’s because practicing for trading can be done without putting anything at stake. You can get a decent demo account and start trading with virtual money. This helps you understand the concepts and flex your financial muscles.
Find the right coach
Many sports stars would be more than happy to say that they share their victory with their coaches. The star may have had the raw talent, endurance, and strength. But the coach helped them get to where they are. They helped keep their heads in the game. They helped them attain the knowledge that they couldn’t get by simply exercising and practicing. In other words, they had a good helping hand. And this can apply to the game of trading, too.
If you don’t want to go at this completely solo, then you can look into working with an investment broker. But just as a sports star has to be careful with their coach choice, you shouldn’t just go with the first broker you see. You need to be very careful when making your selection. As with a sports coach, you’re probably going to have a long-term relationship with this person, and trust is going to be crucial. Get versed in the criteria you need to pay attention to.
Coming to terms with failure
You’ve seen plenty of sports stars that have had mind-blowing hot streaks. They’ll score game after game after game. They’ll beat all of their opponents within an impressive span of time. But how many sports stars can you name who have never tasted defeat? Who have never gona a game without scoring? Who haven’t seen turbulence and failure before or during their career?
Successful traders know what its like to face defeat. They made a bad choice once, or the market suddenly turned against them. It’s something that they’ll see throughout their career. They’ll also have suffered failure a lot before they tasted success. Just look at Warren Buffett – he has a long history of failure. You should be prepared for the occasional loss, because it’s going to happen, especially when you’re starting out. But if you pick yourself up and stay on course, then you could still see amazing success in the end.