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I’m sure we’ve all worked hard to achieve a certain level of success in a particular field. We prepare a plan, follow it with discipline and achieve the outcomes we desired. The hard part then is backing up and repeating the process the second time round.
As we approach the end of another gripping NRL (National Rugby League) season here in Australia, I am left to sit and ponder where it all went wrong for me in our HUBB footy tipping competition.
In 2008 I finished first in this competition by a fair margin, winning my first ever tipping competition in my 27 years of life. Naturally I was quite pleased with myself.
This year, I am somewhere in the middle of the table, well out of contention with only three rounds of footy left to go.
What went wrong? And why am I writing about it in the Trading Tutors Newsletter?!
Because being in a tipping competition is just like being a professional trader. You start with high hopes at the beginning of the season, you put up your entry fee (trading capital) and you are then faced with a number of decisions to make. Which team will win this game? (Which stock will I buy?)
How often do you hear someone say “I knew that team was going to win but I didn’t pick them?” Or, “I knew that stock was going to go up but…” And you reply “Then why didn’t you pick them? Why didn’t you buy that stock?”
It all comes down to your plan. In 2008, I had a simple plan for my tipping. In fact, I approached it just like I approach my trading.
In 2008 I set aside a period of time each week, where I would go somewhere quiet, buy lunch and buy a newspaper with all the team news. I would then sit in quiet, analyzing the information. I would make my decisions based on my rules and also based on the knowledge of rugby league teams I have gained in over 20 years worth of experience!
Once I had made my decisions, I would stick with them. In previous years, I would often change my mind very quickly about a tipping decision, alternating back and forth between two teams, and in the end, I wouldn’t be sure why I chose the team I did. Have you ever changed your mind about a trade very soon after making it?
I wasn’t using a complicated tipping system – it was essentially subjective. I only had a few rules – (i) If in doubt, tip the home team and (ii) Once I have made up my mind, I must have a very good reason for changing it
By applying these two rules, I was able to win the tipping competition and almost win another competition I was in. My rugby league knowledge hadn’t increased exponentially in 2008, but my results had! All by having a plan, and sticking to it.
As I reviewed my poor form in the footy tipping this year, I realized that I had not given myself a chance of succeeding, because I had strayed from my old, proven formula. I no longer set aside a quiet time to do my tipping, and often made my decisions in the presence of others, thus leaving room for outside influences.
I tipped with my heart, not with my head, and ignored my rule regarding choosing home teams in close games.
I realized that the “second time round” was a lot different to the first time round. Having experienced success, I expected that success would continue indefinitely, even though I was no longer following my winning plan. Unfortunately, neither footy tipping, nor trading, nor life works that way.
I am not making excuses here for my poor form in the tipping comp – I am simply sharing with you a realization that I had that applies equally to trading.
Having one great success is something to be proud of, but its not enough. You need to have consistency. You need to be able to back up for the Second, Third, Fourth and many more “times”.
Most traders, whether they are profitable or not, have been through “golden periods” where every trade seemed to be successful, and their trading account grew, before they slipped back into old ways.
If you haven’t been experiencing the level of success you know you are capable of, now is the time to go back and review the periods of your past success. Focus as much as you can on your trading routine and mentality. What were you doing that was good? What weren’t you doing that you should have been doing? This is where a trading diary or journal can really help you.
The principles of success haven’t changed in thousands of years of human history. If your personal levels of success are not meeting your expectations, analyse your procedures and see which areas you can improve in.
Don’t fear the “second time round” – just be ready for it!
Be Prepared!
Mathew Barnes
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