Trading and Auto Racing

I don't know how traders get their inspirations and discipline from. Defintely not systems, indicators or fib extensions but my inspirations and parallels comes from auto racing.

I am a hobby racer. I race sedans(touring cars) and karts. Recently mostly on karts. I am more into endurance racing. 12 hour for touring cars and 3 hours for karts. The team is made up of 3 to 4 racers. Backup paddock crew is needed for touring cars.

Some of the analogies in racing held true for trading.

"Motorsports is dangerous" LLA applies.

This is applied for both racers, crew and yes, spectators. In the past spectators were ever killed in racing from whole cars, debris and heatstroke. In trading it is more likely the racer but your spectators are your friend and family members.

There is chances for ROR or in racing crashes that can end in disability and death. Race safe. Bring the car home, like my crew use to say. It is good that you inform your family that you are trading. Get their support. Convince them that you have money management, discipline and commitment. Spell the risks to them honestly. If you don't get their support, it is difficult to trade without them backing you.

If you get ROR, guess who is gonna bail you out. Yep. Them. If you don't get their support of that risk, they can get killed in the process.

My wife supports my hobby racing and trading. She has ever got terrified when I crashed, carried to hospital and have 6 surgeries on my right ankle and left arm. I am aware of these risks. I have insurance to fall back on. In trading, you need to make your own insurance in case of an "accident".

Safety equipment is paramount to your survival in a catastrophic event, helmet, safety harness, ambulances, medics even helicopters. Even with these in place, don't have a "death wish". If you do, don't even trade or race.

Mental fitness.

Practice makes perfect. Plan the trade, trade the plan. Carry it out instinctively. As racers, we practice on the real lap. Then in our own minds, we race the lap. To test our mental memory, we use the stop watch to time our mental lap. We should not be 1 sec different from the actual lap.

Same with trading, see the indicators, all signs say trade, I'll take the trade.

Physical fitness.

"the spirit indeed is willing, but the flesh is weak" -Matthew 26:41. King James Version Bible
I have to train for a race. There was a time that I was 3rd and 2nd was 200m away with 15min of the race time remaining. My body was aching from the pounding of the lack of suspension in a kart, truth is "no suspension". I have to summon my mental strength to overcome the pain. Every turn was a torture I have to endure. I still got my 2nd place for the team but I sure wished I was physically more prepared. Same like in trading tiredness and sleep depravation can hinder performance. I trade at 11h ahead of EST. So it is dead in the night here.

Slow in, fast out. Fast in, never come out.

This is phrase on taking corners. Brakes on a car are for a purpose. Newton's laws cannot be bent. If there is too much risk (speed) in, a crash is unavoidable. Tress and walls and barriers will be your stopping power not your brakes. So place your stop loss points to the best of your risk and ability.

When in doubt, don't.

This phrase is on overtaking. If your opponent is good, don't overtake rashly. Crashing out and wasting your effort is a waste of energy. The goal is to overtake cleanly with less drama and effortlessly. In trading your opponent is the market, he is an excellent opponent but not infallible. Follow is closely, know its behavior, take the trade when it is at its weakest.

If your don't feel good in taking the trade, don't take it.

Loss is necessary.

Everyone likes pole positions and lead all the way. I like pole positions, tell me who doesn't? There are times or many times, you get overtaken. Don't get angry, blame yourself or keep beating yourself. Stick to your plan. In racing, your pit plan, lap plan, race plan. Your plan might be the only thing tipping to your favor.

Remember finishing the race and getting points is better than no points.

If your get overtaken 3 times or more in a row, then something is a amiss. Check your equipment and your plan. If it is not working for you, adapt your plan. Sometimes, calling it quits is the best solution. This is a league, so keep your points than losing all of it.



Well that's enough rambling from me. I hope others can share their psychology.

I leave you with a picture of my lesser injury.

Thanks lordalpha, great analogy. I'm not into racing so didn't understand what ROR was? I thought Risk Of Return but that didn't seem to fit in with what you were saying. Great picture, hope it doesn't still hurt.

Its Risk of Ruin.

Notice the similar warnings?

Disclaimer - Futures trading is dangerous, please read this.

On spectator tickets.
Motorsports is dangerous,

LOL!!

I agree with the analogy.

I have a Miata that's set up for the track. Many cars pass me on the straight. But in the turns, it's a different ball game.

I turned my fastest laps ever at Phoenix International Raceway when I was running on worn tires. I knew if I went too fast into a corner, I wouldn't come out. So I just took it nice and easy. When my run was over, my pit crew told me that I just ran my best laps ever. Lesson learned!

My favorite memory is passing a Corvette in the turns at Firebird Raceway West. I got under him and there was nothing he could do with that V8 to get around me until we hit the straights...LOL!!

In trading, just take each and every trade signal. The odds should be stacked in your favor or else it's back to the drawing board. Remember, you only need one or 2 profitable trades a day. DON'T BE GREEDY!!

Which Miata TRO? NA, NB or NC version.

The no frills is the NA, most modifyable. Superchargers and turbos in this teeny 1.6L or 1.8L can match you with the V8s. I know of a turbo charged 1.8 at 300bhp with 0.5bar boost.

Great flowing APEXi turbo, which is an IHI.