What Investors and Traders Can Learn From the Olympians

The Stock Market and the Olympics may seem as different as two subjects could possibly be, yet there are striking similarities between what great athletes must do to prepare for a competition and what investors and retail traders should do to be successful trading stocks or any trading instrument.

Have you ever noticed that very few of the “favorites to win gold” actually win the gold medal, or often they come back to several Olympics before winning a medal? There is a reason why the best of the best fail to win the highest achievement of their sport:

Focus

Olympians who are focused on winning a gold at all cost, who are constantly being asked about their chances of winning the gold, or who are feeling the weight of expectations for their performance tend to not compete to their fullest potential. The problem is where they are focused. Instead of focusing on doing their very best, channeling their energies for the competition, and blotting out all of the noise, chatter, and commentary they are thinking and worrying about the gold medal.

So some other athlete who is only thinking about doing their best, enjoying the experience, focusing on their performance and not worried at all about what anyone thinks takes the gold in a surprise competition.

Focus also applies to investing or trading. All too often traders and investors are focused on the wrong thing. Often all they are thinking about is making money from the stock market which is the last thing that should be on their minds. Money like the gold medal is a distraction from what will make an investor or trader successful.

Instead of thinking constantly about “making money” traders and investors should be focused on the PROCESS of trading or investing. When a trader or investor has a complete process for finding, analyzing, and selecting stocks that includes all Relational Analysis™ required for an optimal stock pick, they will find that success or making money simply comes naturally and without a huge concerted convoluted effort or strategy.

Practice

Olympians practice their sport, and their performance, race, or stunts over many years. They know that repetition and muscle memory will help avoid nerves and stress hampering their performance at the Olympics.

Traders and Investors need to learn to use simulators to practice trading techniques, methodologies, and strategies to make sure they understand how these will work in any market condition. Remember there are 6 primary market conditions not just uptrends or downtrends. Practicing any skill will dramatically improve your success. There is no such thing as a get rich quick scheme. It will take more than a 5 day training course, or a weekend seminar to develop your process and to hone your skills.

There is no doubt that the stock market offers huge opportunities for financial security, monthly income, or retirement income. However to be successful in the stock market requires education, development of skill, and using the proper tools.

Equipment

Athletes are well aware of just how critical equipment is to their success at competitions, and especially at the Olympics. The right equipment for their skill level is crucial to their success. No Olympic athlete would settle for a cheap knockoff equipment or an outdated older style of equipment. An Olympian would never use a beginners luge sled, a basic off the shelf pair of skis, or a pair of rental skates.

Traders and investors often use outdated older tools, indicators, and strategies that no longer work or that do not provide the best results due to the rapid changes to the Market Structure. Using basic beginner tools is fine in the early stages of your trading or investing career, but pinching pennies and throwing away dollars is a common mistake most traders and investors make. The average trader will try to use a mediocre beginners charting program that is attached to their broker account, rather than spending a few dollars a month for a superior charting program. If you want to be highly successful in the stock market, then use the very best tools for your trading skill level. If you are just in the market to have fun and play and this is only a hobby, then stick with the free charting program.

Training and Coaching

Athletes rely upon ongoing training and coaching. Even when they are at the top of their sport, they still have coaches by their side at all competitions. An expert trainer or coach is a huge part of their success. Just being talented will not get an athlete to the Olympics much less win a medal.

Traders and Investors often feel that they can teach themselves, that all the need to do is just peruse the internet, read a bunch of articles, and experiment on their own. Many traders spend 10 or even 20 years doing this without success. Then these same traders blame the stock market, or investors blame Wall Street for their lack of success. Finding the right educator, the right training program is essential to success in trading or investing. Spending your time finding the ideal instructor and trainer for your trading style will reap far more profits than just trying to figure it out by yourself. Remember that every hour you spend trying to learn on your own, is costing you money. The average trader or investor who has been trying to learn how to be successful for 10 years has spent an average of 20,000 hours. At a mere $10 an hour, that is a whopping $200,000.00 of time cost spent struggling, being frustrated, and not understanding why you aren’t successful.

Goals

For every Olympian the goals for participating in the games is different. Some athletes are there merely to compete, others for their country’s honor, and others as serious contenders. Yet before they ever make their countries team, they have set realistic goals. These are not wishes or dreams but concrete goals, skating faster than so many seconds, learning a new aerial spin and turn, getting better at hitting the put, curling with more precision. Goals for athletes are very precise and detailed.

Traders and investors need precise goals also. All too often a trader’s or investor’s goals are either too vague and undefined or they are too tight. As an example it is not enough to merely think that you want or need 5 or 10 million to retire comfortably, you need a road map as to how you are going to achieve that first 500 thousand, that first one million and so on. Investors need to layout their plan and process to achieve their long term goals. Traders often say they just want to make .25 cents off of an intraday trade on 1000 shares traded which equates to $250.00 gross profit, but much less once they factor in all of the expenses of intraday trading. However setting a daily goal that is so constricted means that most of the time higher profits are left in the market, and on days when the trade is a loss there is no process for compensating for the loss of income. The better way for any trading style is to set monthly and or weekly goals for income, and not to restrict the profits on a trade.

Risk Factors

Every Olympian understands the risks of his or her sport. They have probably experienced at least one serious injury, and the effects of that injury on their abilities and mindset. If an athlete is not mentally prepared for a competition after a serious injury, the stress of the competition will create so much mental anxiety that their performance is severely hampered or fails altogether.

Traders and investors need to understand in depth the risk of their trading styles. They need to understand their risk tolerance and not attempt to trade stocks that exceed their risk tolerance. When they experience a loss all traders and investors must stop, treat the loss as if it were a physical injury, and take time to recover from it. Emotionally and mentally rushing right back in is like an athlete trying to compete with a broken leg. The results will be disastrous because your mindset is risk adverse, and you will make decisions based of fear rather than logic.

Summary:

Athletes and traders have much in common. Watching how athletes prepare, cope with stress, risk, injury, and success can help traders and investors succeed in the stock market.

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