Day Trading Tips and Tricks

March 30, 2012

Erich Senft

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The Olympics and Forex: A Comparison

Trading OlympicsAs I have done in the past with both the World Series and the World Series of Poker, I love to compare my very own profession in trading to those of other professions who compete at the highest level.  You see, I believe that performance at the highest level demands a certain type of person and skill sets to create the opportunity to perform brilliantly.  I want to model my own performance, albeit less lofty, around features common to those at the pinnacle of their respective crafts.

So to celebrate the start of the 2014 Winter Olympics in Sochi, Russia, let’s examine some key similarities and differences between profitable forex trading and competing at the Olympic level in sports.

Similarities:

  • You Don’t Get There Overnight:  I’ve never seen a successful trader who didn’t work to get there and I’ve never heard of a great Olympian that simply woke up one day, decided to be the best skier, and waltzed right into the gold medal.  Just doesn’t happen that way.  Although I am not saying the same effort in necessary between the two, just that one must cultivate both trading skill and athletic talent over time to truly achieve the desired goal.
  • Practice Makes Perfect:  Learning the theory and understanding the sport is great, but athletes must train over and over to perfect their muscle memory and build their strength, accuracy, etc….  Traders must also spend time in the market to practice their trading skills.  Without sufficient exposure to the market and practice with analysis, decision making and the actual trading, one cannot expect to have confidence commanding an account of any real girth.
  • Discipline:  Everyone wants to win.  No one would come to compete if they didn’t.  Trading and sports are no different in this sense.  Rather than let that be a daunting realization, it should be understood as the environment we compete in, and that opens the door to working on how to gain an edge over the other competitors.  Discipline can be the difference between those who want it, and those who want it a little more.  Trading can be emotional, and have many setbacks, and giddy highs.  The proper discipline allows us to both keep making prudent decisions within a high-pressure situation, and allowing growth along the way.
  • Perseverance:  I cannot think of many arenas like sports and trading that can really make you doubt yourself and ask “Is it worth it to continue?”  Often times, Olympic athletes face down differences between first and last so minute that it would be impossible to detect them without very precise measuring and scoring equipment.  The room for error is next to nothing.  And yet, Olympians push through this and still dedicate themselves to be able to compete.  The same can be said about good traders.  Although the margin for error isn’t always as close, there are many times trading will knock you down, and that usually happens before a breakthrough for those who can persevere and find another way to head back to the competition.

Differences:

  • In Trading, You Can Still Rock without Being in the Top Anything:  You don’t have to take any sort of prize in competition.  The Olympics is all geared towards one thing and one thing alone:  WINNING MEDALS.  That’s a lot of pressure.  You literally have to be better than EVERYONE (or almost everyone) else to get one of those!  For a trader, our goals vary from person to person.  And even if we are only “pretty good”, we still can make a handsome return on our investment.
  • No Need to Wake Up Before the Sun (unless you want to):  Yeah, no getting up at the crack of dawn to eat raw eggs, or have a Russian trainer (only cause they are tough, Cheers Russia!) yell a the fact you have not reached perfection yet.  Forex allows you to trade according to your own schedule.  Great for people that want to do it part-time.  No sacrificing a huge portion of your day to either learn or trade.  Just commit what you can, and no one yells at you if you take a few days off.
  • World-Stage Recognition by World Leaders and Adoration of Millions:  Sorry traders, this one goes to the Olympians.  Yeah, and boy do they deserve it!  To athletes competing, or aspiring, THANK YOU.  Thank you so much for giving all of us an opportunity to truly enjoy the time we spend watching in awe, at the culmination of both your raw talent and so much hard work to get to the polished finish line.  And although not all of you will win medals, ALL of you make us so proud to see our own countries flag and colors compete on a global stage, without strife, but in the spirit of humanity.  And although there are both blood and tears spilled on the Olympic stage, over time, these pieces of you soak into the very fabric of history and cherished memories as we watch you mount and conquer the challenges that we can only imagine deep without ourselves.

So next time you see your favorite figure skater glide effortlessly across the slick ice in front of the scrutiny of both judges and the world, think of the time it took to get there and how your trading can benefit from understanding and Olympians path to the center stage.

March 30, 2012

Erich Senft

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