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Golf and Trading

Sitting and staring at the screens waiting for a trade setup to crystallize, my minds wander off to the wilder lands.

Golf and Trading.

Similarities

Approximately 2 and a half years ago, I decided that golf is a socializing/business skill that is highly essential for corporate/business world.

A nice golf swing, a long drive sure is sexy when the need to impress arises. Having been an athlete for a decade whose game is highly technical, my mind had long been well trained to understand biomechanics and look for efficiencies. I turned to the internet and my coach (not a golf coach) for help. I drilled and i drilled. I taped my swings and compared it against the likes of Tiger Woods and Villegas.

Lag swing, over the top, push, hooks. These were so foreign terminologies then. That begins

After countless of hours @ the range and on the courses, eventually I settled on a technique that was in my opinion, the simplest, most efficient way to swing a club. And then I focused on few clubs instead of whoring around with every single club in my bag. Brushing shoulders with national golfers, I took to focusing on the even number clubs. 8/6/4 irons.

After I mastered my distances for these 3 clubs, I focused on the sand wedge. 30m/50m/75m pitches were my daily practices. I had a specific angle of backswing for each specific distance.

Then came the putting. I would putt in my room on my marble floor (to learn the art of rolling your ball, not striking it), putting on my yoga matt which is about 5ft long (it is a MUST to nail 5 ft putts).

2 golf sets, thousands of hours of sweat, golf balls and dollars later, I am glad to say I have achieved mid handicap standard (best score so far is about 90) and made handful birdies on the courses.

Discipline, determination and the dreams of sinking your first birdie putt have led me thus far. I might not play like Tiger Woods, albeit not even as well as my national golfer friend, but I dare say without a doubt that I am ready for a good game of golf any day.

Trading in essence is another skill. One requires the similar inputs. Discipline, determination and the dreams of one day trading for a living.

I might have been overly aggressive initially, thinking that trading is similar to golfing. Punch a card, get 300 balls and start wacking. Log in to account, trade the first crossover you see and start losing pips. This definitely does not work for trading.

The innate qualities required are definitely similar. A simple system, practiced over and over under different market conditions. Day and night, pips after pips until you master the tee off, the short game and the putting.

The Tee-Off.

Golf: You target areas which allow you maximum playability. That is you tee off on the side of hazards/bunkers to take them out of play.

Trading: You make sure you do not handicap yourself by counter trading the trends. Check blind spots by noting where the major trendlines/ SMA200/ pyschological support resistance prices are.

The Fairway.

Golf: You calculate how many shots you need to get on the green. You check the yardage, wind conditions and depending on whether you are stuck in the rough or on the fairway, you choose an aggressive approach (aim pin) or a defensive approach (target close to the green and play a wedge to the pin).

Trading:  Depending on the market condition (pre-news release/post news release, Asian session/London session/Overlap sessions), you decide whether you should be aggressive or defensive (simply staying out).

The Short Game.

Golf: You are within 20~80M away from the pin. Options available with your wedges are pitching, chipping or flopping. Depending on the pin position, speed and gradient of the green, you make your play to place your ball as close to the pin as possible.

Trading:  Once an entry signal is triggered and you are in play, you look for familiar signals/ candlesticks/ chart patterns that prompt you to i) set stop loss to breakeven and let profits run, ii) trail a bullish run by X number of pips, iii) close a position for a lower than expected profit target or even @ a loss, iv) scale in to a winning position etc etc.

Making that putt.

Golf: Pros make an average of 1.5 putts per hole. That’s a low putt to score ratio (a.k.a Risk/Reward Ratio). Touring pros do that by never missing 5 ft putts. Or on 30 ft putts they do not try to hole out in 1 putt. They lag their putts and ensure the ball stays within 5 ft of the hole and hence being able to hole out with higher probability. You do not need to aim for hole-in-one shots to make a birdie. Just focus on that 5 ft putt.

Trading: Always set stop loss. Target a R:R ratio of more than 1:1. 1:2 is advised but do not set unattainable profit targets. You do not have to win 100% of trades to be profitable. Heck you don’t even have to be right 6 out of 10 times to be profitable if you have a good R:R ratio.

In a nutshell.

Like in golf, i have scored birdie equivalents in trading, only to blow the score of the game by giving up on my putting or being overly aggressive when I should have simply played defensive. The rules of the games are very similar. The disciplined, learned, and focused players will be rewarded with pars, birdies, 50 pips and 100 pips.

Uncanny, the similarities.

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