How my first triathlon relates to stock trading

This past weekend I competed in my first mini triathlon and now it is time
for me to review what I did right and what I think I could have done better so I
can improve my performance for future events. Being a trader I tend to see a lot
of similarities between many of life’s events and my market experiences.
Training for and competing in this triathlon is no different.

I have been trading full time for nearly 14 years now and one of the best things
I did early on in my career was to examine each completed trade as objectively
as possible and then try to learn from my winners and my losers. Now that I have
quite a bit of experience in the markets, I no longer review each trade as
carefully because I know that my losers are usually for the same reason; I
confuse my opinion with what the market is telling me and that equates to a
breakdown in money management which leads to larger losses. It is commonly said
that “winners take care of themselves." I believe that is nonsense, especially
in the current volatile market environment. Winners do not take care of
themselves; money management takes care of winners. I believe this because I
have seen hundreds of trades which I have closed out profitably change
direction. This would have resulted in me taking a loss instead of a profit.
Consistently making money in the markets involves taking responsibility for your
actions and implementing your plan with an iron clad discipline. Training for
and competing in a triathlon are no different, you need a plan of action and you
have to take ownership in the plan and implement it with discipline.

I first decided I would compete in a triathlon in late February and knew I would
have to put together a plan of action quickly if I was going to have any chance
for what I would consider a reasonable outcome. The first thing I did was to
talk to a friend, Denny, who is an excellent athlete with considerable triathlon
experience. He gave me an overview of what to expect in training and competition
and he then sent me links to numerous triathlon Internet sites. I immediately
went to work reading all I could. Because Denny is from Illinois and I am in
Colorado, I thought it would beneficial to sit down and talk to someone locally
who not only competes in triathlons, but also has experience training people in
triathlons. To me it was important that the trainer not only knew what to say
after reading books about the subject, but that the trainer had actual triathlon
experience. This is something you should also look for when getting advice about
the stock market. The trainer I found was someone who I had worked with in the
past for putting together a workout program for myself and my wife and I know
she was competent in all areas of fitness. Her name is Diana, and she helped me
outline an actual week by week training program, she also made several
suggestions about some technology which would help aid in monitoring my
progress. Those suggestions were a heart rate monitor and a speedometer for my
bike. These two pieces of technology allowed me to measure my actual results and
set small goals along the way which kept me motivated to achieve new levels of

After training for a few weeks I became aware that I would be at a
considerable disadvantage if I continued to train on and compete with a mountain
bike on a 12 mile bike course through the streets of Broomfield, Colorado. I
decided it was time to upgrade to a road bike. I found it frustrating that no
one could tell me how much faster I would be able to ride on a street bike
versus mountain bike (I was expecting a formula that would tell me a
percentage). Despite my frustrations I purchased a nice road bike and it was
worth every penny (120,000 of them) as I found it to be approximately 25-30%
faster than the mountain bike on identical training rides. Gaining this much
time in my rides reinvigorated my training as I started seeing considerable
results, nothing motivates like a taste of success. It is like a new trader
making a quick trade early on and then spending sleepless nights imagining how
rich he will become.

As the race drew nearer I had to make further adjustments to my training;
working on speed, hills and endurance. I also had to take a closer look at my
diet, as someone who has always enjoyed working out with weights, I was of the
belief that you couldn’t get enough protein and that carbohydrates were the
enemy. Endurance athletes know that carbs, especially the complex kind, are a
dietary mainstay for replenishing the massive amounts of calories burned during
training. Fortunately for me, I kept an open mind about how to train and
accepted that I would need to make adjustments to my diet. Failure on my part to
maintain flexibility could have made a huge outcome in the results of my race,
just like failure to listen to market wisdom can have a serious financial impact
on your trading account.

As my training progressed I found that I did not stick exactly to the training
plan. Not because it wasn’t a good plan, but because there were certain
adjustments to make based on my personal situation. Sometimes I couldn’t make it
to the pool, or I didn’t feel like running (I never do) but I would force myself
to do it anyway because I knew it would help me accomplish my goals. The same is
true in trading, I often outline trades on my blog based on my views of the
market, but when the market opens I sometimes change my views based on what the
market is telling me. Being flexible is something we need to incorporate into
our market outlooks as well as any other area of our lives, but there can be
fine and dangerous line between flexibility and not adhering to discipline. In
trading, I would advise to stay closer to the disciplined side. Blowing off a
workout is one thing, blowing off a stop in a losing position can be disastrous!