7 + 3 Ways Tennis is Like Trading
7 + 3 Ways Tennis is Like Trading
Each July is 'Sports Month' at Real Life Trading. Our goal for July is to get traders and other people the world around to try a sport they have never played. Why? What does this have to do with trading?
One point I mention often is when a trader is in a funk it's good to experience something brand new! It gets our brain and bodies moving and thinking differently. It feels a lot like wiping the slate clean and giving it a new start! Plus, at Real Life Trading we focus on the trader lifestyle. Many people think professional traders have to be people who are glued to their computer all day. Nope! We are here to break that mold! So, get out and do something new this month. You'll get another article from me soon on a sport I've never played. I just started playing tennis with my girlfriend a few months ago. I'm pretty terrible, but I can see an improvement and I like that. If you have never tried tennis, do so, and see if you pick up on these similarities as well!
*Ashley's dad messaged me today (7/3/15) to add 3 more. He is amazing at tennis and he also loves to trade. So, I figured adding his 3 comments below was an obvious choice. P.S. Yes I've played him and yes, he absolutely wrecked me.*
#1 It's not about power, but finesse: I'll be honest. This one annoys me to no end. I am used to playing sports where power and strength mean a lot. (Football, jiu jitsu, wrestling, rock climbing and so on). However, in tennis, strength means nothing. I am a semi-strong dude (if compared to a baby panda) and the harder I hit the tennis ball, the more I miss the shot. This relates very well to trading. Trading is one of the jobs or careers where your physical passion, strength or prowess means very little. If you own your own landscaping company for example, the harder you work, the more money you usually make. The more yards you cut, the better you're doing. Not in trading. It's entirely mental flexibility and discipline. You can press the keys on your keyboard as hard as you want. Slam your mouse, yell at the computer, work 20 hours a day, but if your mind isn't right, neither will your trades be.
#2 Angles are very important: Well, in tennis, it's kind of obvious. You want to hit the ball away from your opponent. You want to create angles, which make it difficult for them to return the hit. In trading, my suggestion is learn at least two hours' worth of technical analysis. Learn support and resistance, long term moving averages and trend lines. Buying purely off of fundamental analysis, in my opinion, is like playing tennis with one shoe. Why? Just put both shoes on and play ball…
#3 You need the right equipment: I never knew why people always used fresh, brand new balls when they played tennis. Now I know! After a few sessions (or if you're really good, one session) the ball gets squishy and doesn't bounce as well. Most tennis players call this a 'dead ball' and it's pretty similar to any other sport that requires a ball. Just ask Tom Brady. The proper inflation is important. Tennis balls simply depreciate faster than most. In trading, you can make it as simple or as complex as you wish. I truly place 99% of my trades from a simple laptop and I trade full time. If I'm hosting a webinar or trading room, I'll use my second monitor. If you have good Internet and a computer that's less than six years old, you're probably good to go. Trading equipment is easy. Don't get overwhelmed by it.
#4 There's a net: You get this idea immediately, I'm sure. In tennis, your objective is to hit the ball over the net. If you hit the net, it stops your ball. In trading the net is the parts of trading that you can't control, but they are always there. Examples: The bid / ask spread. Implied volatility in options. Earnings and market makers. Professional players hit the net all the time, especially when serving. It's not a negative experience to most pro players though. They know the net is there, it's always there and it's part of the game. In trading, there are going to be things out of your control. And by things, I really do mean just about all of it. You're going to 'hit the net' in trading. Your job as a trader is to understand how to control yourself and account for the net. In tennis and trading and life, there are always going to be barriers. ALWAYS. When you find yourself at an obstacle in trading, tennis or life, take a deep breath and hit the ball again.
#5 'You miss 100% of the shots you don't takeâ€: Thank you Wayne Gretzky (aka The Great One). Wow, a hockey reference in a tennis article? Haha! Well, this is sports month. The fact is, the quote is very true. In tennis, you've got to swing the racket! If you sit idle you will lose. In trading, it's a beautiful line of patience and taking action. What's there to be afraid of? Losing money? Being wrong? Money and wealth can always be created and you will be wrong about 50% of the time in trading. Why focus on something that's a guarantee? The way to never be wrong in trading is to focus on you and your trading plan. If you create a simple trading plan and follow it each time, you won't be wrong. In fact, you will be consistent! And when you are consistent you will become disciplined. And disciplined traders are profitable ones.
#6: There are different types of courts: People can trade futures, stocks, options, commodities, currency, binary options, bonds and a host of other instruments. In tennis, you have grass, cement, synthetic surfaces and clay. Practice and get really good at one of them first. Hone your basic skills on just one rather than jumping back and forth in between them. The stock market and life rewards the specialist. There's no need to be 'okay' on all courts. If you're just amazing at one of them and you use your skills to make money consistently, great! Keep that court and later your can begin to dabble elsewhere.
#7: It's fun!: Yep. I took the easy road here on number seven, but it's the truth. If you've never played tennis, try it in July. It's amazing for people at every age. From 9-99, I've seen many ages on the court (okay, I haven't actually seen anyone who is 99 on a tennis court, but you get the idea). Obviously you love trading, that's why you are here. It's important to remember that trading is just an extension of who you are. We live this life once. You could trade the stock market and accumulate millions of dollars, but that money won't mean anything to you unless you enjoy yourself! That's why the trading lifestyle is so important to me!
*The ones added by John*
#8 Risk Management: Know when to play defense, offense, or when to play "yellow light", where you get the ball deep and in play at 70% power to set up your next shot.
#9 Movement: A tennis player "split steps" as the opponent hits the ball so that they can quickly move in any direction. The player also has to be light on their feet and anticipate where the opponents next shot is going (reusing the hockey analogy, skate to where the puck is going, not where it is).
#10 Tactics: Experienced match players always go into a match with a plan that they will try an execute, but will also know when to change/adjust their tactics if the original plan is not working well. But just like trading, they don't change tactics on the first point they lost, but assess whether its poor execution, do they have the wrong tactic for the opponent, or if they just need more time for the tactic to work.
I am excited to hear your spectacular sport stories! Until next time remember, Love life, Live life and Trade it.