What Football Fans and Eskimos Can Teach Us About Trading

eskimoIn England, no other game ignites greater passion, argument, rivalry and fanatical support than Football. The national sport ‘footie’ as it is known, (do not say the word ‘soccer’ to an English fan) dominates the sport sections of English tabloid newspapers, mainstream media and social media. Football is a  multi billion pound industry in England, providing direct employment for regulators, officials, managers, staff, coaches, agents, ground keepers and a whole host of other support staff – but don’t forget the players themselves. With millions of pounds in annual wages and transfer fees, these young football players’ salaries make most CEO’s and directors of companies eyes water. English football provides even more employment across other industries such as journalism, advertising, catering, camera crews , pundits, commentators, security guards and even the police. You didn’t think the police gave up their Saturday afternoons for free to barricade the streets of North London to stop the Arsenal and Tottenham fans from killing each other now did you?

All that aside, the majority of football supporters are pleasant, law abiding, non violent fans, who passionately grace the home and away stadiums every time their team plays, cheering, singing, and chanting in their teams colors – never sparing a thought for the opposing team.

So what does a football fan dressed head to toe in his team colors have to do with forex trading?

Consider a Saturday afternoon football derby in Manchester between the home team Manchester United in red and the visiting team Manchester City in blue. What would happen if an eskimo received a free home team ticket to enter the stadium, join the fans and watch the game? His seat number would automatically place him in the home team zone (the red fans) and although he knows nothing about football, he would have to copy the fans around him to try to gain an understanding of the game and blend in with the crowd. So when the game starts all the red fans and one eskimo will be cheering when the red team have the ball, and all the blue fans on the opposite side of the stadium will be cheering when the blue team have the ball. If the eskimo decided to break ranks and cheer for the blue team, he would very quickly invoke the wrath of the red fans in the stadium, and he would end up crouched  down in his seat wishing he was back home in the safety of his igloo – far beyond the Alaskan sea.

So if you are a football fan and you support a particular team, unless you are an eskimo or a neutral (not a fan) you will be supporting your team for the duration of the game. But what you won’t do (as a true fan) is stand and cheer for both sides. It doesn’t fit. It doesn’t feel right. It makes no sense and you may as well have dressed yourself this morning in one blue sock and one red sock, and wear a  blue and red checked overcoat over your red shirt and blue jeans.

Forex traders can learn to be like football fans and choose sides. To the true football fans-choice is easy. They either support the red team, or the blue team, or the black and white striped team, or the canary yellow team or some other team and that is that. ”Scunthorpe till I die!” is the battle cry of some avid fans of lower league football. Very well done to them. The thought of changing sides doesn’t enter these fan’s minds, and because they remain loyal to one team they become experts at knowing the team they pay money to support.

Now you are probably thinking “here we go!” Here comes the lecture that we must hold onto our trade, through thick and thin, through hardship and relegation, rainy days and losing streaks because our trade will turn around and win one day, and that’s what we are sticking to. But the answer is no. That is not what we are implying here at all with regard to forex trading.

Do not stick to your trade like a diehard football fan supports his team. That would be madness. It would be reckless and foolhardy. It will blow your trading account up into a million pieces.

What we can learn from football fans is to support one side of the trade and become an expert at it.

If you are struggling with forex trading, continuously changing sides from long Dollar to short Dollar, with a trading journal that depicts a  flip-flop of long then short trades, why not learn to trade for one side only?

Here is an example of how you can benefit  by trading the USD long only. Your strategy is relaxed, calm, and looking only to enter the USD long against the other teams of CAD, CHF or JPY when it is right to do so. If you do not know where to spot a correct entry point then our Forex Trading Course for Beginners or the Blind Date Trading Strategy for Advanced Forex Traders will help you. Entering short does not even cross your mind. It would be like crossing over to the other team. Never! You also won’t be cheering for the other team or trying to join them, just because they are having a winning day. You will have less trades. It will be impossible for the Dollar to win every day. Some days as a trader you will just have to sit back and not participate in shorting against your own team – the USD. That is the downside of trading one way. But at least you won’t flip-flop from long to short all the time. 

Think about it, if you go long, then short, then long, then short you are playing the game all the time. You never get a break. You will never relax because there is always some direction in the market, even if you need a micro chart to see it.

Trading one way has advantages. All your focus is on long entry setups. When shorts are in control you will simply hang on to your cash and wait for a long entry. When the market is not in the mood for buying dollars, and the other teams CAD, JPY and CHF are winning – you don’t need to join them. That keeps you in the game all the time like a yo-yo. Switch off, stay neutral and relax.

100-dollarThere is always another game, another time, another season, another chance. On and off the pitch. Oh and which team do we support ? The ”Greenbackers” team of course. Managed by Benjamin Franklin, sponsored by the Fed.

 

 

 

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