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Five Takeaways for Stock Traders From The Game of Tennis

29 Aug 2022 0 COMMENT

Introduction

Tennis is a game of determination, training and consistency. No player can play a winning game without these attributes. Stock trading is very similar. You must be determined to learn the ropes and trade consistently to understand the best strategies. Unless you can commit to stock trading, you can’t expect to make a good profit from it. 

With Wimbledon garnering eyeballs right now, if you watch closely, you will understand that tennis has many lessons for stock traders. Here, we outline some of the takeaways from tennis that you can employ for stock trading:

1. Mindset is everything

When you play tennis, you need the physique and agility to play any ball that comes your way. Your opponent may throw you a short ball or a long ball. While your physical state contributes to the game, your mindset is crucial to winning. You need the mental bandwidth to play challenging games and outwit your opponent. Stock trading is also all about the mindset. Not only do you need to focus on making winning trades every time, but you also need the grit and determination to keep improving your strategies to beat the market. If you let loose even a little bit, you could end up in a loss.

2. Your judgement could be wrong

While playing tennis, you need to be able to estimate how your opponent is going to play. Your strategy will be based on how you think your opponent will hit a ball. However, you may find that you think they’re going to go deep, but they end up hitting a shorter ball or a drop shot. In that case, you have to be ready to run to get the shot. Trading shares is similar. Your judgement could let you down sometimes. You may think a stock is going to go up after an announcement when in reality, the market reacts the opposite way. The important thing is to be prepared for both scenarios. You are more likely to hit the winning shot when you have a backup plan.

3. You will fail, but you must get back up

You cannot win every game you play. It’s a statistical impossibility. There are some games you will lose. That’s why tennis is set up as a game, set and match. If you lose a game, you can work twice as hard to make it up in the next game. The idea is to pick yourself back up and win the match. When trading in shares, you may fail at a few trades. Your judgement could be wrong, or the market doesn’t play out in your favour. You have to ensure you don’t lose heart and continue to trade. You should focus on making a profit overall. You could choose to break up your trading sessions into weeks or months so that you can track your overall performance. Don’t get caught up on one losing trade.

4. Never quit while you’re down

If you have watched enough tennis games, you know that a player who looks like they’re about to lose makes a remarkable comeback. All they do is put their heart and soul into the game. They don’t quit while they’re down. Even in trading, you should employ this principle. If your trade is making a loss, don’t exit out of panic. Hold the position if you believe in your trade. If you hold your horses, the markets could bounce back and turn your losing position into a profitable one.

5. Keep training to improve your game

Wimbledon champions don’t happen on the day of the game. They train for months before they build up the expertise to become winners. Track the life of any champion, and you will see that they have worked hard on their game before getting on the ground. Similarly, before you trade in the stock market, you should spend time understanding how the market works. Educate yourself about the happenings in the market and the strategies you can employ. You should constantly be upping your skills if you want to win.

Takeaway

As you can see, there are many takeaways from the game of tennis for stock trading. You need to have a winning mindset, the ability to pick yourself up after a failure and keep improving your skills. If you watch the game close enough, you may be able to pick up on more cues for trading. Happy tennis watching and trading!

Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.