7 Ways the Super Bowl is like the Stock Market
I realize this article might only be read once a year. There's a saying out there that a 6 min mile is the same distance as a 12 min mile. All that means is, at least you are reading this. Thanks for that!
My name is Jerremy Newsome. I am a Real Life Trader. I co-founded reallifetrading.com in the late part of 2014. Our mission is To Enrich Lives. Part of our mission is to educate the masses about what the stock market is, how it works and what a Real Life Trader does. Below are 7 ways I find the stock market to be similar to the Super Bowl.
The offensive/defensive battle: In the stock market you have buyers and sellers. Supply and demand. If a stock was once at $100 and now it's at $70, more people likely will demand shares. Why? Because it's 30% cheaper than it once was. Demand often equates to buyers. There can be more buying pressure than selling pressure, which likely will cause the stock to move higher. Just like in American Football, if the defensive pressure is overwhelming, the quarterback might pull a Mark Sanchez and fold under pressure.There are grid lines: In American football, along with most sports played on a field, you have hash marks, grid marks, simply lines on the field showing possession and progress. In the stock market, traders can also create lines on their charts. This is often called technical analysis. They can be horizontal lines showing the demand and supply prices. Below is one of those examples on the S&P500 chart
There are a lot of variables: In the Super Bowl, as well as every American Football game, there exist a mega-ton of variables. Wind, field condition, weather, football density, crowd noise, lighting, injuries, altitude and much more. In trading, there are even more. Almost an endless number of variables, actually. Our objective as professional Real Life Traders is to pull money out of the market consistently, hopefully 10% or so a month. One of the best ways to do this is to decrease how many variables we factor into our decisions and trading. Focus on fewer trades, better quality, higher risk:reward ratios, less news. Less is more in trading.
Professionals have a plan: Those who know me well were sure this one was going to get slid in here. In the Super Bowl, there are hundreds of professionals, all with specific rules and plans to follow. Offensive coordinator, defensive coordinator, special teams, strength and conditioning coaches, the health staff, the owners and many more! Their objective is to outline the plan before the big day and follow it with intense discipline. In the stock market, specifically day trading, every day is our Super Bowl! Such beautiful volatility, swings, movement and the potential for serious cash. Our 'job' as a trader, is to create a trading plan and follow it. My suggestion is to make a very simple plan. Why? See bullet 3. Could be as simple as 'Buy at $100, exit at $103, or exit at $99. $1 risk for a $3 reward.â€ Obviously it's important to know the 'why' behind buying at $100, but that's where bullet 2 comes in.There are losses: In my personal opinion, Tom Brady is the greatest quarterback to be a part of the game. A slightly controversial topic I know, but greatness is hated, while still being respected. Currently Tom is 3rd all time in the amount of games won with 194. Peyton and Brett are tied at 199 respectively as I write this. He has had 9 post-season losses, which he is also third behind who? You guessed it, Manning and Favre. What does this mean? Well, to achieve greatness, you are going to lose. You are going to be wrong. You will not be perfect. There will be times you are in the Super Bowl and lose! It's a tough feeling. What's even more magical is the ability to overcome the haters and doubters. And usually, the haters and doubters are just our own voices on the inside. In 2015 my win/loss ratio was 43% as a trader. Yet our day trading room had over 100% ROI. Is that winning or losing? Neither. We simply followed our plan. As traders, risk mitigation is key!It's a small world in a big world: Perception is the Super Bowl is nicely tucked away from the rest of the world and sports out there. It is still the biggest viewed television event in the world. However, you have the gambling side of the Super Bowl, advertisements, security control, broadcasting, marketing, imagining, branding, the halftime show and much more. The stock market is actually a very small part of investing. You have the choice between bonds, currencies, futures, commodities and more! You have global news, recessions, currencies, bubbles, frenzies, wars, political ties, corporate ties and much more influencing the markets. If you're playing in the Super Bowl, you have to focus on your specialty. There's a 99.99999% chance I'll never play in the Super Bowl. I can only imagine the pressure! Preparation, though, creates opportunities regardless of our profession. In the stock market, one of my best decisions was to eliminate as much noise as I could and focus on following my trading plan, mitigating risk and being patient. This can very much be a mental game, just like the Super Bowl. A battle of wits between coaches, staff and players.You can make some solid coinage: Well, what's a stock market article without the thrill and allure of crazy cash? Haha! I am not here to sell you the dream of the stock market. In fact, I sell very little since all of my education is free. A very small portion of people who start playing football end playing football. Trading, along with every other profession, is pretty much the same way. In life, I try living by some simple words. Consistently being consistent, continuously contrives character. Pure success and ultimate growth always occurs weeks after we feel like giving up and caving in. It took countless hours and pain to make the Super Bowl. Only one team wins. It took me years to achieve the trading status I currently have now, which is simply a profitable Real Life Trader. If you want to work towards a profitable day trading system totally for free, check out these 4 classes. In 4 hours I will wreck every notion you have about trading and help you see that being a professional football player or a professional trader is all about knowing the steps and continually taking them.
Until next time, Traders! Thanks so much for reading this. I hope you had an amazing Super Bowl Sunday! You rock!
C.E.O - Jerremy Alexander Newsome