Sunday 12 June 2011

Trading Your Fastest 5k Ever

Towards the end of the first mile on my run this morning, the thought of how similar running is to trading - specifically that you can read all the books in the world about how to do it, but nothing helps you until you start doing it yourself.

It's all very well reading about rest days, long runs, intervals, fartleks (snigger) etc., but the only way to "Run Your Fastest 5k Ever" is to get out there and start running. Reading the theory is useful to an extent, but it in no way prepares the body. Similarly with trading, you can read all the books in the world about trading, and paper trade for months, but it's only when you start to do it for real that you really start to learn.

When you're reading about running at a certain pace, you have no idea how you will feel physically, and similarly you can read about taking a position size of 2% of your bank, but you have no idea how you will handle this unless it's for real. What might be an insignificant amount when you are paper trading can seem a lot more significant when your money is on the line.

Practice makes perfect. Well, maybe not perfect, but running frequently will increase your pace over time, although for those of us over a certain age it's a battle against the decline in athletic performance that comes with old age. Same with trading I guess - there was an excellent post on the subject of how our peak age for financial decisions is 53 - before that we are gaining experience, after that age, we are heading downward to senility! With running, the age is more like 28 I would guess. Which is at least better than women's gymnastics, where you peak at 12!

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