Horse Training And Asset Trading: Some Similarities

A professional horse trainer recently told a rider that she needed to take his horse and fix it or at least train him to be a better rider. It was also suggested that perhaps changing his saddle to one like the pro was using would work out better. Sometimes it seems the professionals are really legends in their own minds.

Advice might be given to use a one-step method for training a horse. This is not the case. There are conventional methods that have worked repeatedly with one common goal of getting the horse broke. Once the horse is broke, a rider can do pretty much whatever is needed with the horse.

Old-school trainers have followed a mutual path for accomplishing the breaking of a horse, which can be applied to trading.

• Keep it simple
• Patience is the virtue
• Remember that a horse changes with age (Know that markets change)
• Never say that your horse “won’t” (Never say your market, system, strategy, etc., “won’t”)
• Don’t add pressure on top of tension
• Learning is for a lifetime

A horse that is broke is not a hose that only allows a saddle to be put on and then mounted. A horse that is truly broken must meet these basics:

• Face the rider
• Put its head down for the halter
• Stand quietly when tied
• Be confident with surroundings, including flags, tarps, banners, etc.
• Stay off rider and out of his/her space
• Allow the rider to make decisions about speed and direction.

Likewise, traders need to be confident with their surroundings, not allow the changes in the market to sway them from following the rules of their strategy or system. There are times when traders have to get out of their own way (space) and not hesitate when a trade is perfectly set up (don’t drag when led). Traders must be allowed to make the decisions regarding the trade i.e., entry, exit, direction, strategy, instrument, etc.

All of the above points can be taught by almost anyone with time and patience, in both horses and traders. But don’t listen to someone just because his or her name is on a buckle, trailer or saddle. Chances are they have not sat on YOUR horse (yet). Their one-method fix may not be right for every situation.

The best trainers aren’t always the ones seen driving up and down the highway in their decorated trailers or heard about in the news. Some of the best trainers are only as good as their barn helpers and exercise jockeys.

The same is true for trading. There is not a one-method fix. Trading is learned with time and patience. Different strategies can be used to suit various needs and skill levels.

Just as the barn helpers and exercise jockeys are important in the training of horses, mentors and coaches are valuable in the training of traders. Ongoing education contributes to a lifetime of learning, which gives traders the best chance of becoming the best traders possible. Never stop learning.

Free day-trading education is available at Apex Investing.