The Financial Pugilist (by phantomcapital)

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What can a trader learn from a boxer?  One camp makes his living with his fists, the other with their dedication to fundamentals and technicals.  So obviously, a trader can learn nothing from a boxer right?  Wrong, very wrong.



A week ago, Floyd “Money” Mayweather enhanced his record to 43-0.  As in undefeated.  Why is he undefeated you ask?  Is it a thunderous uppercut, a jab that no one can see, or a brutal straight right?  No.  It’s a blended attack called defense, defense, and DEFENSE.  Simply, Money is impossible to hit.  He lets his opponents attack at will and they hit nothing more than his forearm.  Then the opponent opens up his chin for one split second and Mayweather lets fly with one devastating punch.  Boxing fans can tell you, it isn’t the punches thrown, but the punches landed that makes a prizefighter a winner.

So how does this apply to a trader?  Simply, its not the trades placed that makes a trader great, it’s the profits booked.  Let the market run wild in the ring, diving and darting every way possible.  And when Mr. Market opens up his chin, load up nice and heavy and unload on your perfect trade.  Defense, defense, attack.

Floyd Defense

Simply, know your trade.  Financial media gives us a million reasons to trade; hot IPO’s (facebook, I’m calling you out), earnings, technical levels, and economic reports.  It’s all noise, the bluster of a pre-fight weigh in.  Know your perfect trade and hit it.  Know your perfect punch and throw it.  Otherwise, play DEFENSE.  Let Mr. Market dance around like an idiot as much as it wants.  Let your dentist tell you about the next “hot” stock.  Let CNBC inform you about the direction of the market.  Let your buddy at the gym tell you about how he made 10% last week.  Who cares.  Have the discipline to wait for your perfect trade and let the noise pass you by.  And when Mr. Market opens up, load up on your back foot, and deliver that crushing blow…your perfect punch.  

Mayweather is hated by all of boxing because he only fights once or twice a year.  Believe me, he doesn’t care.  “Money” fights the opponents he wants and because of it he is the highest paid prizefighter in history ($32 million guaranteed for his last fight…any questions?) because he PICKS HIS FIGHTS.  Defense, defense, and more defense.  Simply, name the terms of your fight.  Don’t step into the ring with some trade you don’t know.  Again, defense, defense, attack.

Floyd Offense

Simply, boxing can teach us everything about trading.  Defense sustains fights; perfectly planned punches ends fights.  Maybe your uppercut is an earnings play, possibly your hook is a long/short position, perhaps your straight right to the chin is a sniper ES trade.  Who cares, know what trade wins the fight for you and punch accordingly.