Trading, Competitive Sports and Chess- The world of trading is really close to the world of competitive sports. Among the sports that trading resembles, chess comes first to my mind.

by: Colibri Trader

I have heard other traders talking about professional sportsmen being good at trading. This might be partially true, but I still have not found a 100% correlation between trading and sports. People good at sports might be good at trading, but that is not always the case. Some of the best traders I have known have not played any competitive sports in their life.

Writing about competitive sports, I have recently read an interesting book (The Art of Learning- Josh Waitzkin) revealing the world of chess. I find it extremely relevant and wanted to my findings with you. The author of the book is a professional chess player and a World Champion of Tai Chi Chuan. In his book, he explores different grandmaster chess player’s psychologies of trading. I have been personally impressed by two of these players and believe that the way they overcome losing games might be directly applied to the world of trading and losing streaks.

The first example comes from the former World Chess Champion Tigran Petrosian. The way he managed stressful situations or long matches was truly unique. He would begin each day by waking up and sitting quietly in his room for a period of introspection. His goal was to observe his mood down to the finest nuance. Was he feeling nostalgic, energetic, cautious, inspired, confident or insecure? His next step was building the game plan around his mood. If he was feeling energized, aggressive or exceedingly confident, he would pick an opening that allowed him to express himself in a more creative vein. Instead of imposing an artificial structure on his match strategy, Petrosian tried to be as true to himself as possible on a moment-to-moment basis.

On the other side, the second example I am going to use in this article is Garry Kasparov- World Chess Champion for nearly 20 years and maybe the strongest chess player of all time. He had a different approach to his emotions. Kasparov is known as a greatly aggressive player, who was overly confident. After one of his games that he lost, a journalist was asking him how he would handle his lack of confidence in the next game. Garry responded that he would try to play the chess moves he would have played if he were feeling confident. He would pretend to feel confident and hopefully trigger “the state”. Step-by-step, Gary would feel off his own chess moves, off the created position, and off his opponents’ building fear, until soon enough confidence would become real and Garry would be in flow.

At this moment, it is really up to you to practice your trading. It takes a lot of dedication and effort and certainly the markets represent a zero-sum game of chance. Are you the aggressive type yourselves or more the type of an introvert thinker waiting for the right setup for as long as it takes?