With the Wimbledon Championship in full swing, Samuel Leach, author of The Formula for Success: How to win at life using your own personal algorithm, takes a look at some of the key tricks we can learn from champions like Roger Federer when it comes to mindset and mental strength, with some notes on how this can help you in trading.
Successful traders must deal with constant high levels of stress, while remaining mentally alert enough to make the right moves at the appropriate time. Dealing, in a world of probabilities, many find it difficult to survive and easy to make a wrong decision. Likewise, tennis players worldwide must work to withstand intense pressure if they are to compete successfully and thrive.
The edge that standout players possess in sport is mindset. While Roger Federer is admired globally for his physical flair and the poetry of his single-handed backhand, he is also extolled for his ability to remain calm when competing on the world stage, and to excel under high-pressured situations: traits which have facilitated his domination of tennis for nearly two decades. Both new and experienced traders must aim to replicate this mental discipline in order to translate ambition into success on the trading floor.
Trading requires great mental strength — especially in forex (FX) trading, where the pace is swift, and the markets are open 24-hours. Working with money, especially vast quantities of money, can be an intimidating prospect, and without experience, it can be hard to know where to start. Consequently, practising with paper trades, where no real money is risked, can help you to understand the process without suffering real financial damage, and acclimatise to the experience of waiting for the desired outcome and reacting to changes in the market.
Traders must remain aware of the effect a profit or loss can have on your mental state. When a trader makes a mistake or suffers a loss, the natural response is to feel stress and view the loss as a threat. This can trigger anxiety or fear, which can make further decisions more difficult and less logical. Similarly, however, making a profit can cause you to react arrogantly in further trades, perhaps taking unnecessary risks that could result in massive losses. Remaining level-headed at all times is difficult, and experiencing a sustained series of losses can have negative effects on your mental health.
Look to tennis as your teacher
Appropriate preparation is something top tennis players always point to as being key to their success. This ranges from diets, workouts, physical treatments and competitor analysis. Likewise, traders need to be prepared when making trades. To do this, traders should carry out comprehensive market research, pattern and past performance analysis, and – as with tennis players – competitor research. It is crucial that you view trading as a business venture, and not as a personal hobby, if you are to maintain a high level of self-discipline and professionalism.
Although technical skill is necessary to excel in trading, the key differentiator for a successful trader is state of mind. Numerous tennis champions have honed a mind-set that allows them to dedicate themselves to the pursuit of their goals without giving in to distractions; Rafael Nadal recently explained in an interview that he was able to return to victory on clay at the French Open despite being injured simply because he decided to change his attitude and his mentality. As with Nadal, traders should recognise their own strengths and weaknesses, and map out how to overcome them, in order to fight for success.
A major part of mindset is also about controlling emotions. Australian tennis player Nick Kyrgios is notorious for his inability to reign in his angry outbursts, which have so far not helped him to much success. Federer, on the other hand, has rarely been known to cede to emotion on court. It is clear that giving in to too much emotion can hamper your performance. Consequently, you should seek to maintain an objective view of the aims you’re looking to reach and to leave as much emotion behind as possible. Try not to get invested in any single one of your trades, and ensure that you diversity your trades so none affect you overmuch if anything less than positive occurs.
The formula for success
Traders and tennis players will all have different methods for attaining their goals, but one thing that unites them is a formula for success. Creating your own formula that sets out how you will go about achieving your aims and each step of your plan is an effective way of putting you on the road to success. This formula should revolve around developing the mental strength to be able to remain strong under pressure, resist giving in to emotion, and to keep going even when the situation is difficult. Finding this kind of mental fortitude will make it much simpler to find the way forward to the future you want.