This past weekend I had the opportunity to play with a pro golfer. After 18 holes, he was four under par while I on the other hand came in around 95 (a decent round for me). Watching this guy in my foursome hit the ball so flawlessly every time made me realize just how much I stink at this game.
There is a reason he makes it look easy, yet I find it so frustrating. He understands the process, subtleties and nuances that make a pro just that.
I have been attempting to play the game for about three years. I have taken various lessons, gone to golf schools and try to play with some regularity. Every now and again, I may be able to put together a decent round, which almost always leads me to believe that I have elevated my game to a new plateau.
The Puzzle About Golf
Without fail, I can never stay at that level for more than just a round or two. What puzzles me the most about golf is not the long game or short game or even the putting, it’s just that I simply cannot tell you why some rounds are good and others are not. I cannot tell you why I hit the fairway sometimes and other times I shank it hard right.
So what does that have to do with trading?
When I trade, I understand why some trades pan out and some don’t. That is unlike golf, in which I can’t explain what should happen in terms of my round and I cannot plan my shot selection accordingly. I go into each hole thinking about what I would like to do but the outcome is usually nothing more than controlled randomness at best. I operate on the premise that that my probability of hitting a flawless shot is still nothing more than 50/50 . . . I wish it were better, but as it stands today, it’s simply not.
Let’s say for example that I’m faced with a trade that is the equivalent of a really tough hole on a golf course. Perhaps I’m looking to buy a stock that has just taken a 20% haircut in price and is dropping like a stone.
In this instance, through my years of experience I know exactly how to operate so that I can position myself for the best results, even if it means not trading. I’ll admit, sometimes I flat-out just get it wrong or things don’t pan out as I expect with a trade, but I know how to adjust to always mitigate my risk.
If a mistake is made, I know exactly where and why it went wrong. I can see past the mistake itself so that I don’t make that mistake again or at least do my very best to not make it again for a long time.
Qualities of Successful Traders
Good golfers never blow up on any hole. They know when to take calculated risks and when to just put the ball in play. Do you lay up and give yourself an easier shot on the next turn or do you strike the ball with all your fury and go for the hole? Should you play a draw or a fade? Do you punch out to the fairway or try to hit to split the trees in a dangerous shot? Bad golfers don’t really know what shot to take and tend to just hit the ball at the hole. Good golfers know why they hit a bad shot so that they can self-police and self-correct.
If you don’t know what a good shot looks or feels like, how can you expect to go out and hit them consistently?
If you don’t know what a good trade looks like, how can you expect to make them consistently?
There are way too many similarities between unsuccessful traders and bad golfers. They both can’t explain why a good trade is a good trade (or a good shot) and vice- versa.
As I mentioned earlier, successful traders know how to self-police. They know when they’ve made a mistake and they know how to correct. Randomness does not exist. This is done through years and years of practice, routine, preparation and learning. There are no gimmicks or shortcuts to be good at just about anything.
And while I don’t have success at golf (yet) as the game is still a series of random events to me, I continue the process of becoming a respectable player because I know my forward motion will be a result of focusing on the process rather that the result.