Updated: Jun 23
I traded my comfortable surroundings for the wilderness of the Appalachian Trail spending 4 days and 3 nights on the trail, and it struck me how much the trail parallels options trading. But honesty I am ALWAYS thinking about trading! Here's a fun look at some key takeaways from 4 days on the Trail:
1. Embracing the Bear (Market)
Ever slept in a tent in a bear sanctuary after 30 years away from camping? Talk about fear! Trading can be a lot like this. There's always the potential for bear markets, fear and panic is how so many coaches and the media makes money,, It seems intimidating, but just like sleeping in that tent with literal signs saying beware of bears, it's all about facing your fears head on, keeping your wits about you, and staying prepared. There are ways to defend your portfolio from bears, you might even be able to make some bear money as your portfolio has a drawdown. If you make a little money going down and your portfolio has some stocks (even if it's your retirement account) you just beat most people in the market!
2. The Power of Consistency
The trail taught me that consistently putting one foot in front of the other gets you where you need to be. It’s the same with trading. Consistency in following our trading strategy is so important to success, particularly if you follow the GKT motto of trading small, trading often, and trading mechanically. Don't be afraid to change your strategies according to market cycles, but follow your plan and don't take outsized risks or let fear stop you from executing!
3. Planning Ahead
Mapping out the next water sources was vital to ensure I had enough to drink, but not too much weight for the steep climb up Albert Mountain. To be a successful trader, planning and risk management are key. You need to balance potential profit against possible losses we write about risk/reward often in this blog. When you are thirsty on the trail and water is miles away you regret not planning ahead. Don't regret planning ahead for your trades, know all your options no matter what the underlying does.
4. Chirping Experts and Market Noise
Birds start chirping every morning before sunrise, rain or shine. It's like market noise, all that chatter and speculation is distracting. You have to tune out the noise and focus on the essential signals. As I mentioned at the start the experts understand everyone is scared, and they actually like to start 'chirping' well before daylight. As the storm rolls in they get louder, they promise you this is going to be the next apocalypse and want you to panic and need their service or product to make it through. If you educate yourself you can stop listening to all the noise and be just fine!
5. Keeping Fear Zipped Away
Keeping the tent zipped taught me the importance of keeping unwanted bugs (mainly spiders) out. Same thing with emotions in trading, it's so important to shut out emotions that cloud judgment (fear and greed) and lead to poor trading decisions. Fear and greed have ruined many good traders, don't let these inside your tent, keep them out.
6. Diversification in Nature
The array of bugs, trees, and flowers on the trail showed me life's diversity. Similarly, diversification in your trading also helps mitigate risks and keep your investments healthy.
7. Community Matters
Hiking with friends beats hiking alone any day. In trading, being part of a community like GKT gives you a network of support, knowledge, and inspiration. Our discord is free, join here
8. Saying Yes to Risk
Just saying yes to experiences leads to growth. This applies to trading as well. Embracing the risk that comes with options trading is how we learn, grow, and succeed, just make sure the risk to reward is favorable.
9. Picking Your Path
And finally, just because others love hiking the entire 2200 miles of the trail doesn't mean I have to. It's the same with trading. Your trading journey is unique. Just because one strategy works for someone else, doesn't mean it's right for you choose your own path and have your own goals!
And yes it's not a top 10 list because I don't have another thing to add :)
The Appalachian Trail taught me a lot about life and trading. Embrace the lessons the trail throws your way, continue to trade small, often and mechanically, and let's enjoy the hike, good kids! As I say at the end of each article Join the Good Kids Trading (GKT) community today, there is no reason to do this hike alone. We're stronger together and it's way more fun!