Trader, Cricketer & You: Part 3:: Determination & grit
Greetings...!
This is the 3rd installment of Trader, Cricketer & You series. Hope you are able to connect with the analogy. The link for previous 2 is given in "related ideas" below. And after reading, if you find it interesting, do share it.
Starting with cricket in general, to different formats in cricket, in this 3rd part of the series, we are getting more match specific, looking more closely to a trader's real situation and how he may choose to respond.
Remember the 2002 India England Natwest series final match.
England scored a mammoth 325 runs batting first. Chasing 326 runs, India started off brilliantly. Sourav Ganguly and Virendra Sehwag took it to the opposition. A quick-fire 100 run partnership and it all looked so good. But from 106 for no loss, India was down to 146 for 5 in quick time. Half of the team down & OUT…
Many felt, it was a lost game…
But then we saw 2 young men Yuvraj & Kaif - with great determination and grit; they went on to re-build the innings. Given the circumstances, they knew losing more wickets would be catastrophic. So they played sensibly, minimizing the risk; taking singles & doubles, waiting for the opportune moments, targeting specific bowlers to go for the big shots.
There were still nervy moments, & nail biting moments, but by the end of the match, what we saw was something very special. We did what no team had achieved till that point of time. It was the highest successful run chase recorded till then. It still gives me goose bumps, even as I am just writing about it. Wow! What a match it was.
So what is that match to do with trading?
This match is everything related to trading especially for those who are in the market for some time now.
You see, In a Bull market, many see others making quick money (England scoring big) or see their own small investment doing well ( good start as a trader in initial stages). Then they jump all in and just like the above situation half the team out for next 40 runs; here in trading world, half the capital gone or a sizable amount lost in no time.
It is the lessons learnt here that makes this match so much more important in trading context
- Yuvraj Singh & Mohd. Kaif kept their calm even when half the team was back in pavilion. As a trader, this is a very important lesson especially for those who have lost money. What has happened has happened. You can’t do anything about it. But what you can do is Keep your calm, adapt to the current situation and be more determined & vigilant to work your way ahead.
- They focused on preserving their wicket rather than getting scared of what was lost. As a trader, preserve your capital first. Don't let it scare you, rather, accept the reality and deal with it. Don’t go in to trade with a heavy mindset. Your mind is everything while trading. And it needs to be in right frame of mind. So don’t burden your thoughts.
- Take one step at a time, minimize risk as much possible and when necessary taking calculative risks. It’s time to rebuild. You need to think fresh, trader. Be more calculative; be more prudent in managing your risk.
- Don’t think of recovering loss as the reason to enter the trade
- Market will always give you that feeling what if I had… or what if I hadn’t…
-
- Remember, It is okay to lose 10 / 100s of opportunities. Market is one place where opportunities will keep knocking time & time again. So don’t you ever worry if you miss out.
- Important to stay determined not to lose money easily.
- You may say, it is easier said than done. But let me tell you I have gone through the pain of 2008 crash. To give you an eg
o When I started trading in 2004, there were ups & down but overall things were fine.
o Then came 2008, and all stocks started tumbling.
o there was this stock called Aban Offshore. It came down from nearly 5000 odd levels to Rs 2000.
o I thought to myself, even if it goes to Rs 3000 that is 50% gain potential for me… Well, there was no respite it came down & I exited at 1780 levels
o A few days later it was at Rs 1250 (that is almost 80% lower from top) & I again re-entered thinking of doubling, if it reaches even Rs 2500. Gone SL hit. This time exited at 965
o Many quality stocks gave me the feeling the worst may be over, but my feelings continued to disappoint me.
o When I re-checked Aban after a few more days, I couldn’t believe what I was seeing Rs 450 (more than 90% erosion and I was like is se jyada kya ( what worse can it do).
o I jumped in again and amount was higher than on previous occasions.
o Well the stock had it’s own way. It went in to lower circuits this time and when the shares were tradable it was down to 220 levels. So another 50% down after already being 90% down.
o Then elections happened – and guess what I was so negative that I shorted Nifty just before the result day… Manmohan Singh Govt came in to force & markets zoomed and again I was on the losing side. My short position got squeezed. I saw all the other stocks rising, stocks where I had my eyes on but not invested or stock that I exited. And Aban, it continued to frustrate me. So those were the days which taught me lessons, and I learnt them the hard way, in fact very hard way.
o Of course, Aban finally started it’s upward journey after 2-3 months. I did profit from the counter to book out at 960 only to realize price going up to 1700-1800 levels in the next 3 months thereafter.
o It was then, I realized that trading merely on News, thoughts, feelings, gut feel, is all okay in a bull market. But if you have to survive, and grow, in this market, then there is much more..
o It was at this point that I started reading charts. I Invested time, money & energy in learning. It's not that I don't have losing trades now. I do have them. But overall, Chart & data analysis have helped me cut down my risk when it doesn't work and make it large when I do get it right
o From guess work trading in 2008, to being more selective in trading now, being more rational, I can say, I have come out stronger. If it wouldn’t have been for that experience, in 2008, I might not have learned and I wouldn’t have been what I am today.
o No matter what the situation is, remember, the choice to respond is always in your hand
Accept your past gracefully. Make peace with it. Only then you will be open for new learning.
Work hard. There is no substitute to it. Trading does not require physical hard work but it demands a lot from your mind. You need to work hard on your mentality. There is no easy money. You need to do your groundwork. Prepare yourself for different situation and have an action oriented plan for each scenario.
o If you are determined, ready to work on yourselves, you will be able to see that there is a better tomorrow waiting for you…
Knock knock…!!!
This is the 3rd installment of Trader, Cricketer & You series. Hope you are able to connect with the analogy. The link for previous 2 is given in "related ideas" below. And after reading, if you find it interesting, do share it.
Starting with cricket in general, to different formats in cricket, in this 3rd part of the series, we are getting more match specific, looking more closely to a trader's real situation and how he may choose to respond.
Remember the 2002 India England Natwest series final match.
England scored a mammoth 325 runs batting first. Chasing 326 runs, India started off brilliantly. Sourav Ganguly and Virendra Sehwag took it to the opposition. A quick-fire 100 run partnership and it all looked so good. But from 106 for no loss, India was down to 146 for 5 in quick time. Half of the team down & OUT…
Many felt, it was a lost game…
But then we saw 2 young men Yuvraj & Kaif - with great determination and grit; they went on to re-build the innings. Given the circumstances, they knew losing more wickets would be catastrophic. So they played sensibly, minimizing the risk; taking singles & doubles, waiting for the opportune moments, targeting specific bowlers to go for the big shots.
There were still nervy moments, & nail biting moments, but by the end of the match, what we saw was something very special. We did what no team had achieved till that point of time. It was the highest successful run chase recorded till then. It still gives me goose bumps, even as I am just writing about it. Wow! What a match it was.
So what is that match to do with trading?
This match is everything related to trading especially for those who are in the market for some time now.
You see, In a Bull market, many see others making quick money (England scoring big) or see their own small investment doing well ( good start as a trader in initial stages). Then they jump all in and just like the above situation half the team out for next 40 runs; here in trading world, half the capital gone or a sizable amount lost in no time.
It is the lessons learnt here that makes this match so much more important in trading context
- Yuvraj Singh & Mohd. Kaif kept their calm even when half the team was back in pavilion. As a trader, this is a very important lesson especially for those who have lost money. What has happened has happened. You can’t do anything about it. But what you can do is Keep your calm, adapt to the current situation and be more determined & vigilant to work your way ahead.
- They focused on preserving their wicket rather than getting scared of what was lost. As a trader, preserve your capital first. Don't let it scare you, rather, accept the reality and deal with it. Don’t go in to trade with a heavy mindset. Your mind is everything while trading. And it needs to be in right frame of mind. So don’t burden your thoughts.
- Take one step at a time, minimize risk as much possible and when necessary taking calculative risks. It’s time to rebuild. You need to think fresh, trader. Be more calculative; be more prudent in managing your risk.
- Don’t think of recovering loss as the reason to enter the trade
- Market will always give you that feeling what if I had… or what if I hadn’t…
-
- Remember, It is okay to lose 10 / 100s of opportunities. Market is one place where opportunities will keep knocking time & time again. So don’t you ever worry if you miss out.
- Important to stay determined not to lose money easily.
- You may say, it is easier said than done. But let me tell you I have gone through the pain of 2008 crash. To give you an eg
o When I started trading in 2004, there were ups & down but overall things were fine.
o Then came 2008, and all stocks started tumbling.
o there was this stock called Aban Offshore. It came down from nearly 5000 odd levels to Rs 2000.
o I thought to myself, even if it goes to Rs 3000 that is 50% gain potential for me… Well, there was no respite it came down & I exited at 1780 levels
o A few days later it was at Rs 1250 (that is almost 80% lower from top) & I again re-entered thinking of doubling, if it reaches even Rs 2500. Gone SL hit. This time exited at 965
o Many quality stocks gave me the feeling the worst may be over, but my feelings continued to disappoint me.
o When I re-checked Aban after a few more days, I couldn’t believe what I was seeing Rs 450 (more than 90% erosion and I was like is se jyada kya ( what worse can it do).
o I jumped in again and amount was higher than on previous occasions.
o Well the stock had it’s own way. It went in to lower circuits this time and when the shares were tradable it was down to 220 levels. So another 50% down after already being 90% down.
o Then elections happened – and guess what I was so negative that I shorted Nifty just before the result day… Manmohan Singh Govt came in to force & markets zoomed and again I was on the losing side. My short position got squeezed. I saw all the other stocks rising, stocks where I had my eyes on but not invested or stock that I exited. And Aban, it continued to frustrate me. So those were the days which taught me lessons, and I learnt them the hard way, in fact very hard way.
o Of course, Aban finally started it’s upward journey after 2-3 months. I did profit from the counter to book out at 960 only to realize price going up to 1700-1800 levels in the next 3 months thereafter.
o It was then, I realized that trading merely on News, thoughts, feelings, gut feel, is all okay in a bull market. But if you have to survive, and grow, in this market, then there is much more..
o It was at this point that I started reading charts. I Invested time, money & energy in learning. It's not that I don't have losing trades now. I do have them. But overall, Chart & data analysis have helped me cut down my risk when it doesn't work and make it large when I do get it right
o From guess work trading in 2008, to being more selective in trading now, being more rational, I can say, I have come out stronger. If it wouldn’t have been for that experience, in 2008, I might not have learned and I wouldn’t have been what I am today.
o No matter what the situation is, remember, the choice to respond is always in your hand
Accept your past gracefully. Make peace with it. Only then you will be open for new learning.
Work hard. There is no substitute to it. Trading does not require physical hard work but it demands a lot from your mind. You need to work hard on your mentality. There is no easy money. You need to do your groundwork. Prepare yourself for different situation and have an action oriented plan for each scenario.
o If you are determined, ready to work on yourselves, you will be able to see that there is a better tomorrow waiting for you…
Knock knock…!!!
