What Can Traders Learn from Footballers?

Posted by tradeyouredge on August 11th, 2014

The month of June/July was when the world had their attention on Brazil, the hosting nation of the Fédération Internationale de Football Association (FIFA) World Cup 2014. This is a quadrennial event hosted in different countries and it’s a tournament for the association football world championship. This is also an event that nearly all football enthusiasts eagerly await as they would either throw themselves to the game (by travelling to the host nation), or they would glue themselves to the screen as the live matches are broadcast.

While I’m not here to comment on the technical performance of the footballers, I believe that there are many of things that traders can learn from a major event like this. I’m pretty certain of this because, like trading, footballers have emotions too and in order to win a major event like the FIFA World Cup, having the right focus, attitude and mindset is crucial.

With that, here are some of the lessons that we can learn from the nature of football and how traders can incorporate those lessons in our trading.

Note: I hope to share some personal views and to learn as a trader. By doing so, my views are not meant to be criticism to football fans or to anyone.

1. Expect the Unexpected

I’m going to begin with this not so uncommon quote about the world cup because this seems like a reasonable fact. In case you don’t know, the truth is that the FIFA world cup is one of the most unpredictable events – this happened in history and will probably continue in the future. While I’m not saying that the teams are totally unpredictable (as many pundits did predict that Germany would be the champion), we can only predict the outcome of the matches only to a degree of certainty and nothing more.

You see, like trading, the statistics and historical results can only show you past results and never the future. Your analysis can have the sophistication of a rocket scientist but that only shows you the probabilities of the next game. Remember that a probability is not the outcome but only a bias of the outcome?

So what can you do? Do you still follow your analysis?

My answer to that is a DEFINITE YES. Always trust your analysis and follow your own bias. Nonetheless, no matter how good your analysis can be, always expect nothing from it. Follow your rules and belief in it but believe that your system only give a probability based on a big sample size especially when placing a trade.

2. Remaining at the Top of Your Performance

As mentioned, this is a once in four year event and, for many top footballers, this is their time to shine. Without a doubt, this is where all the crème de la crème players would meet to demonstrate their skills. This is where they would gather and show the world what they can do.

In case you’re not aware, footballers train and work hard in the 4 years prior to the world cup so that they can be in it. As you can imagine, missing the world cup is a big deal for these players. However, to represent their respective country, they need to show consistency as well. The team manager is not going to pick you just because you were performing well in the 6 months prior to the tournament (even though they have every right to). In fact, the managers keep a close eye on the players’ performance at an on going basis.

Hence, in order to get picked, footballers constantly train themselves – physically and mentally so that they are at the top of their performance. You can see why it is crucial that players should maintain at the top of their performance at all cost, can’t you?

Bringing this core lesson back to the trading world, traders need to understand that, if you want to be the champion in your own little way, you too must remain at the top of your performance at all cost. Because trading is not about being a champion 6 months before you reach your goal but it’s about constantly training yourself, both mentally and emotionally, so that your reward can remain a life time. It is a big deal, isn’t it?

3. Learning to Stand Up Again

Brazil started the first match in the Group stages with an own goal (by Marcelo). While that’s a minor issue, their 7-1 lost to Germany probably shocked the world and brought the nation to tears. They then ended the tournament with a 0-3 lost to Netherlands. Some would argue that their defeat was due to the lost of their start player Neymar. Nonetheless, a lost is a lost what ever the reasons may be.

Even though the Brazilians finished the world cup in 4th place, the intangible damage is much bigger. Because, according to First Post (an online news portal), they lost part of their “legacy of Brazilian football which was built over the years by generation after generation of brilliant footballers.”

One of the biggest lessons I’ve gained from watching sports, be it in running (see article) or golf (see article), is the mindset and attitude of the sportsman is extremely important. In the case of the Brazilians, I believe what they really need to learn to stand up again after a defeat.

I believe Brazil’s lost is nothing because they have had losses in the past. However, their legacy is at stake and some would even argue that your legacy is more important than winning. And the crucial part of protecting their legacy now is the ability to recover in the next 4 years.

In many ways, this is an important lesson to traders too. Traders forget that they are normal human beings and you can fall once in awhile. Like football, losing is nothing compared to having the ability to stand up again. Traders need to understand and accept that losing is part of the game. Instead of grieving over the lost, you should learn to stay positive (see article) and to stand up again as quickly as you can.

Conclusion

The FIFA World Cup 2014 just ended but the glory of the Germans and the Loses of the Brazilians are now historical facts. In fact, they are nothing more than facts especially when the 2018 World Cup kicks off in Russia.

Trading is similar to sports, your losses today become historical facts tomorrow. More importantly, can you treat them as facts and learn to stand up again after a fall? Of course you can, you just need to learn how.