What can Football teach us about trading?

Liverpool smashed 4 goals past Messi's Barcelona on Tuesday night mounting one of the biggest comebacks in the history of the sport.

It was a glorious night for football fans across the globe (unless you're Barcelona or Man U fan then I'm sorry 😭). Liverpool’s sheer perseverance and determination defined all the odds (before this game Barcelona only conceded 6!!! Champions League goals ALL season).

As I watched the game, I could not help but draw parallels between the two worlds - Trading and Football.

There are surprisingly many things in common between a winning trader and a winning football player.

Let's have a look at few of them.

1. Bet of probabilities, not certainties.

Trading and Football is a game of skill and opportunity. Footballers use their skill to find opportunities. There are no certainties. ( Even if you're 3-0 up and you have Messi in your team) Footballers are risk takers. They take a calculated chance based on their skill level, experience, game tactics and moment in the game to - shoot, pass, lob, defend, tackle, take one for the team and so on...

Traders are the ultimate risk takers. We calculate the probabilities using our experience, market state and strategy suitability - to enter, exit, add to, or reduce positions in the markets. The hard, cold reality of trading and football game is that every outcome has uncertainty about it. Accepting and preparing for this is the first step each footballer and trader must do.

2. Strike rate doesn't matter.

Did you know that the best footballers shot conversion rate is below 25%? Meaning that more than 75% of their strikes will be saved, blocked or missed. But does this stop them from striking again and again? Absolutely not, because the reward of scoring a Champions League goal is massive.

Top Scorers Champions League.png

Similarly, the best traders in the world win rate is well below 50% and can be as low as 20%

Then how they can consistently make money in the markets, you ask? By having massive winners that are often 5x, 10x or more times larger than the cost of making the trade. Notice how I said the cost of making the trade, not risk. This is a critical difference in how winning traders see the markets. Each trade is an opportunity to have a massive reward and we just spend the cost to find out if it will indeed be the massive winner this time.

A video about why using this trading approach is the only way to be a consistently winning trader is here: (👉 VIDEO: HOW TO MAKE MONEY TRADING?)

3. To be the best you have to beat the best.

Lot of us loved playing Football when we're young, and we thought we could beat anyone. But no-one in their wildest dreams would try to compete in Champions League with their local football team. Sounds absurd, right?

Yet this is exactly what most newbie traders are doing when starting out trading. You see in trading there is no local league, there is no lower divisions or 2nd tier opponents you could practice trading against. The moment you're in the market you're in the Champions League Final. Where everyone else has more experience, more money, better strategies, better bots, better connections and more tenacity than you. Unless you truly understand and prepare for this then you will have no hope in surviving in the markets.

4. Attitude produces far better results than skill

Winning is all about attitude. Many people are certainly aware of this, but at the same time, most people don't understand the significant part attitude plays in their results. When an underdog beats a superior opponent, what's the determining factor? When two opponents are evenly matched, what's the factor that tips the balance one way or the other? In both cases, the answer is the attitude.

Mohamed Salah's 'Never Give Up' T-shirt epitomises Liverpool's spirit in Barcelona victory. Egyptian was forced to sit out the game due to injury but was instrumental to the team's spirit.

5. Don't underestimate the home support.

Anfield can be one of the most hostile places to play as an opponent. And I have no doubt that Liverpool's success must be largely attributed to their loyal fans who never stopped carrying their team.

As individual traders, we will never see this kind of support on such a massive scale but its really critical to have our own home support. That your partner, family and friends support what you do. It can be really significant at times when going gets tough and home support can be the necessary driver for traders success on getting back on track.

6. You must love the game.

And finally, you just must love the game of Football and trading. Is not a job, it's not a chore. We just love what we do and would never change it for anything.