| | Fear and Opportunity in Baseball: Three Rules for Markets Like This
by Brandon Chapman, CMT | When I was a little guy, I wasn't necessarily the most confident at sports. My parents signed me up for Little League where I played for the KC Royals. With my little blue hat and glove, I would climb on my Schwinn and ride down to the elementary school to practice on their field. | I liked going to practice, I liked my friends… but I did not like playing in the games. In all honesty, it was because I didn't want my at-bat. More specifically, I was afraid of the ball. I was afraid of the ball being thrown at me at (what I assumed was) 100 miles an hour, afraid of being hit by the ball, and afraid of striking out in front of my family and friends. | So, the first two years of Little League were not super-enjoyable because of the unjustified fear. I was missing out on the fun and growth more out of fear of the unknown than fear of actually being hit. | The way I overcame the fear was through the help of others, and focusing on what I could control. | One, I always had my helmet. Two, I could focus on the fundamentals. My dad took me out one day and spent an hour pitching balls to me which helped me improve my hand-eye coordination and the ability to hit. Three, I can realize that the fear or danger isn't as bad as it may feel initially. My brother took me in the back yard and played catch where we pitched faster and faster and sure enough, I got hit in the head with a fast ball, I survived. The pain was tolerable and the fear diminished. | I didn't become a great baseball player but I was able to enjoy the time I played and learn to overcome a powerful fear. | For those of you who've only been trading for a few years and haven't been actively involved in the markets during high volatility and an aggressive selloff, you might well feel like I did as a boy. | You're facing the scariest pitcher in the league and you're sure the ball is coming at you at 100 miles an hour. To make it through the season, we need to take some of the lessons I learned and apply them here. | One, wear your helmet. The market gives us tools that we can use to be safe, like stop-losses, options, and analysis. It doesn't stop us from being hit but it helps protect us from significant harm. | Two, get out there and practice your fundamentals. Trade often, trade small, get the feel of taking swings in the market and you will improve your hand-eye coordination, or in this case, your "mouse-to-market" coordination. Three, remember the pain is not as bad as the fear. If we're protecting ourselves with the tools we have, if we've practiced in the markets and if we trade consistently and small, what pain we do feel will be tolerable. And we'll be ready to step up to the plate when it is our time in the line up again. | Be safe out there, have fun, and remember your fundamentals. |
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