Market Lessons from a Triathlon
What I Learned From My First Triathlon and How It Relates to Stock Trading
By Brian Shannon
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 as I used to 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 which 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 me 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 performance.
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, 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!
Another important decision I made in my triathlon training was to participate in a “transitions clinic”. Transitions (the time it takes to move from swim to bike and bike to run) are apparently an often overlooked area by many triathletes and not being prepared in this area can cost precious minutes in a race. I was very happy with my transitions in the race and I believe that many of the tips I learned in that clinic helped me beat Chad, the instructor of that clinic, by 21 seconds.
While trading stocks and participating in triathlons, or any other athletic event, may seem unrelated, I find them to be very similar. Both activities require a high level of preparation and there are many experts that should be sought out to help become prepared. At the same time, there is a high level of individuality and personal responsibility that comes into the implementation of the plan of action. Basically, I believe that, like anything worth pursuing in life, if you are going to succeed you need to learn as much as you can about the subject, work hard and be disciplined. Whether it is trading the markets, competing in triathlons, playing a round of golf or whatever your passion, the desire to perfect the task at hand may be elusive at times, but the journey is full of lessons which we need to embrace as part of the overall experience.
So, you are probably wondering how I did in the race. Well, if I were a 65 year old female, I would have won my division. The problem is I am a 38 year male and that is a very competitive bracket so I did not win my division. Out of a field of 370 participants who finished the race, I was able to finish in 25th place and I am eagerly looking forward to my next race so I can make improvements. See Results