Article

Share trading lessons from FIFA World Cup

07 Aug 2019

Have you ever wondered what is it about the game of soccer that literally makes the viewers go crazy? After all it is a 90-minute game interspersed with a small break and at best extendable by another 30 minutes. There is something unique about the FIFA Cup, a once in 4-years event. The 2014 World Cup was viewed by nearly 25% of the world population. Russia in 2018 may better that record. Even a traditionally cricket-crazy India is gradually waking up to the visual pleasures of soccer.

There are some interesting similarities between a soccer match and a day of trading on the stock markets. Both have a limited window; both are won and lost in a few crucial moments; both are driven by stars; both sustain by team work etc. The list can go on, but the moral of the story is that there is a similarity between the 90 minutes of soccer and the 400 minutes of stock trading. Let us look at some amazing lessons that a stock trader can pick up from the FIFA World Cup.

Make every minute of your window count

Quite often you get to see certain teams always winning in closely contested games. Germany is one such example. That is because they have always believed as a team that every minute is an aggregation of 60 seconds and it just takes 10 seconds to dribble the ball from one end to the other. That should be your approach in trading too. You have a 400 minute trading window each day and that throws up a million opportunities. So read your charts, probe the data and new ideas will appear. A lot can happen in 30 minutes. Make every minute of your 400 minutes count.

Give your best when the chips are down

The one thing that remains with you about the Spain/Portugal match is Ronaldo’s out-of-the-world kick at an impossible angle to score the third goal. That the match went into a draw is immaterial. The fact is that Ronaldo gave his best when Portugal needed it the most. That is how every trader should approach the markets. When markets are volatile, when the trend is confusing, when calls are going against you; just stand up and give your best.

You may have bad days, but you are still good enough

It must surely have been heart breaking for Lionel Messi to miss that penalty against Iceland and ending the game in a draw. Or Ronaldo must have been deeply disappointed that his three goals against Spain could only give Portugal a draw. The likes of Ronaldo and Messi have the ability to bounce and say that “They still are the best”. That must be your approach to trading too. There are going to be bad days. Just dust yourself and continue to believe that you are good enough. Things don’t change just because you had a bad day.

90 minutes of play requires 90 hours of planning

A soccer team has to practice hard at fitness, strategy, simulating the opposition’s strategy, making countermoves, identifying the key players, studying their weakness, and preparing Plan-B. The ratio is 90 hours of planning for a 90-minute match. The same applies to stock trading too. You need to be prepared in terms of your selection of stocks, your strategy, technical levels, news flows, your entry strategy, exit strategy, managing risk etc. The 400 minute trading window calls for intense preparation.

Play to your strengths, always

Have you ever seen Brazil playing a defensive game of soccer. From the days of Pele, Romario, Rivaldo, Bebeto, Kaka, Ronaldo and Ronaldinho to the modern day Neymar and Jesus, the focus has always been to attack. That is the strength of the Brazilian team. They tried to change their style in the 2014 quarter finals against Germany with disastrous results. Keep this in mind while trading. You have a certain style of trading that you are comfortable with. Don’t give up on your basic strength. It could be in identifying stocks, managing trends, churning capital etc. Stick to what you are best at and make that the core of your strategy.

Use your breaks to refresh yourself

Did you know that an average soccer player in an international match runs between 13 to 16 kilometres during a 90-minute game? The break after 45 minutes is intended to refresh them. But it is also a way to look at the last 45 minutes and plan the next 45 minutes. Approach your trading in a similar fashion. When you deserve a break from trading, just take it. Objectively look back at your performance and make changes. You will surely come back refreshed. It is all about going away from the trading terminal to get a new perspective.

A foul has a huge cost

The best example of an expensive foul is the famous head butt by Zidane which grounded Marco Materazzi in the 2006 World Cup Final. France lost Zidane and Italy took the World Cup. Like in the case of soccer, playing foul in your trading can also have a huge cost. A foul is an error without giving a thought to the consequences. Not protecting your losses, averaging your positions, leveraging aggressively are all equivalents of the Zidane head butt. Stay away from foul play in trading as it can entail a huge cost for you. No red cards please!

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Share trading lessons from FIFA World Cup

07 Aug 2019

Have you ever wondered what is it about the game of soccer that literally makes the viewers go crazy? After all it is a 90-minute game interspersed with a small break and at best extendable by another 30 minutes. There is something unique about the FIFA Cup, a once in 4-years event. The 2014 World Cup was viewed by nearly 25% of the world population. Russia in 2018 may better that record. Even a traditionally cricket-crazy India is gradually waking up to the visual pleasures of soccer.

There are some interesting similarities between a soccer match and a day of trading on the stock markets. Both have a limited window; both are won and lost in a few crucial moments; both are driven by stars; both sustain by team work etc. The list can go on, but the moral of the story is that there is a similarity between the 90 minutes of soccer and the 400 minutes of stock trading. Let us look at some amazing lessons that a stock trader can pick up from the FIFA World Cup.

Make every minute of your window count

Quite often you get to see certain teams always winning in closely contested games. Germany is one such example. That is because they have always believed as a team that every minute is an aggregation of 60 seconds and it just takes 10 seconds to dribble the ball from one end to the other. That should be your approach in trading too. You have a 400 minute trading window each day and that throws up a million opportunities. So read your charts, probe the data and new ideas will appear. A lot can happen in 30 minutes. Make every minute of your 400 minutes count.

Give your best when the chips are down

The one thing that remains with you about the Spain/Portugal match is Ronaldo’s out-of-the-world kick at an impossible angle to score the third goal. That the match went into a draw is immaterial. The fact is that Ronaldo gave his best when Portugal needed it the most. That is how every trader should approach the markets. When markets are volatile, when the trend is confusing, when calls are going against you; just stand up and give your best.

You may have bad days, but you are still good enough

It must surely have been heart breaking for Lionel Messi to miss that penalty against Iceland and ending the game in a draw. Or Ronaldo must have been deeply disappointed that his three goals against Spain could only give Portugal a draw. The likes of Ronaldo and Messi have the ability to bounce and say that “They still are the best”. That must be your approach to trading too. There are going to be bad days. Just dust yourself and continue to believe that you are good enough. Things don’t change just because you had a bad day.

90 minutes of play requires 90 hours of planning

A soccer team has to practice hard at fitness, strategy, simulating the opposition’s strategy, making countermoves, identifying the key players, studying their weakness, and preparing Plan-B. The ratio is 90 hours of planning for a 90-minute match. The same applies to stock trading too. You need to be prepared in terms of your selection of stocks, your strategy, technical levels, news flows, your entry strategy, exit strategy, managing risk etc. The 400 minute trading window calls for intense preparation.

Play to your strengths, always

Have you ever seen Brazil playing a defensive game of soccer. From the days of Pele, Romario, Rivaldo, Bebeto, Kaka, Ronaldo and Ronaldinho to the modern day Neymar and Jesus, the focus has always been to attack. That is the strength of the Brazilian team. They tried to change their style in the 2014 quarter finals against Germany with disastrous results. Keep this in mind while trading. You have a certain style of trading that you are comfortable with. Don’t give up on your basic strength. It could be in identifying stocks, managing trends, churning capital etc. Stick to what you are best at and make that the core of your strategy.

Use your breaks to refresh yourself

Did you know that an average soccer player in an international match runs between 13 to 16 kilometres during a 90-minute game? The break after 45 minutes is intended to refresh them. But it is also a way to look at the last 45 minutes and plan the next 45 minutes. Approach your trading in a similar fashion. When you deserve a break from trading, just take it. Objectively look back at your performance and make changes. You will surely come back refreshed. It is all about going away from the trading terminal to get a new perspective.

A foul has a huge cost

The best example of an expensive foul is the famous head butt by Zidane which grounded Marco Materazzi in the 2006 World Cup Final. France lost Zidane and Italy took the World Cup. Like in the case of soccer, playing foul in your trading can also have a huge cost. A foul is an error without giving a thought to the consequences. Not protecting your losses, averaging your positions, leveraging aggressively are all equivalents of the Zidane head butt. Stay away from foul play in trading as it can entail a huge cost for you. No red cards please!