Stock Trading Training With The X's And O's

When asked about the relationship between stock trading and athletics, most individuals would say there is no connection. In reality there are similarities particularly in regard to trading training available to investors and coaching available to athletes. Furthermore, when these similarities are understood, it is evident that trading results are dependent on the execution of the fundamentals just as with most athletic competition, such as football.

Starting in their early years, young boys and some girls receive instructional training from their football coaches with the aid of a white board. Diagrams of X's and O's representing the offense and the defense are drawn on the white board with player movements that can be easily visualized. Coaches also spend considerable time teaching the players the fundamentals of the game. In fact, coaches never stop teaching as it's critical for team success regardless of the age of the players. Professional football players also receive training with the aid of a white board and diagrams of X's and O's. The emphasis always includes execution of the fundamentals. Blocking and tackling are given a high degree of attention. In fact, coaches being interviewed after a losing game will often tell the press that his team lost the game because the players failed to block and tackle as they should.

Upon arriving in camp, football players receive play books that define the offensive plays and the defensive formations that the team will use throughout the season. Similarly, stock trading requires a playbook. Included in the trading training that an investor needs, is the wherewithal to write their own Trading Plan. This Plan defines the fundamentals of how the investor will approach all trading activity. The essential part of this Plan is a specific set of rules, the X's and O's, that define how the investor will look at the stock market and at individual stocks in regard to:

What to invest in When to buy When to sell

There's a fourth question that is not in the football players playbook, but it's an issue talked about frequently between players and coaches. That question is, "how do players need to prepare themselves for the next game?" With regard to trading, the fourth question belongs in the Trading Plan. The question is "what does the investor need to do in preparation for the next trading opportunity?" For the stock investor, this requires:

Paying attention to geo-political news and news about the economy that could impact the market. Paying attention to the trend in the overall market as represented by the S&P 500 Index which is a bellwether indicator for the U.S. stock market. Identifying stocks to add to a watch list of potential candidates for future investment. Identifying changes needed to protect profits in stocks the investor currently owns. Getting additional training as needed

There are similarities between athletics and stock trading. In both cases,

Individuals need to be trained in the fundamentals Athletes need a game plan. Investors need a trading plan Assuming it's a good plan, it needs to be followed religiously Failure to follow an excellent plan will undermine the chances of success Where mistakes are made, there needs to be an assessment of what went wrong and corrective action taken to eliminate the mistakes and maximize the successes.

With proper trading training and the right game plan, the investor is prepared to maximize profits while minimizing risk for a lifetime of enjoyment and financial benefit trading stocks.

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