If You're Going To Be Long...

...You'd Better Be Straight.

This is a quote by pro golfer Fred Couples, one of the game's best and maybe the nicest person in the world of golf. If you're wondering why I'm quoting a pro golfer in a trading blog it's because it occurred to me that playing golf is a lot like trading. By "playing" I mean the entire SETUP before you hit the ball. I've played golf for a lot of years and I have to admit that I'm pretty mediocre at the game. Setting up to make the shot is a little like trying to pat your head and rub your stomach at the same time. Of course, Fred Couples tells us that all HE does is take the club back and hit the ball.

Oh sure. Well here's how it really goes. Feet shoulder-width apart; body bent from the hips at just the right angle; knees bent and head over the ball; hands gripping the club just so. But wait, there's more! Now it's time to take "the swing". Take the club back, keeping your left arm absolutely straight (or right arm, if your a lefty). At the top of the swing the shaft should be parallel to the ground and the club head should be facing the target. Your shoulders should now be perpendicular to the ground and your head should STILL be over the ball. Now, start the club back toward the ball using your hips to rotate your body AND the club. This creates what is known as "clubhead speed". Cock your wrist at just the right moment and hit the ball. Then after you've done all this, go back to the clubhouse and clean the chalk marks off of your clothes.

Seriously, if you've done all this perfectly you should feel NO impact when you strike the ball. You should hear a soft "whack" when the club makes contact and you've sent the ball flying long and straight. If you made even the SLIGHTEST error in your setup and swing, the impact of the clubhead on the ball can feel like you've just made contact with a brick wall. Then you watch as your ball goes straight for 3 or 4 yards and takes a sharp right or left into (pick one) the water hazard, the woods, the next fairway or the clubhouse.

So now you're thinking... when is she going to get to the bloody point???

Here it is folks. The setup in trading is just as important as it is in golf; and, if you screw up, a lot more expensive. You need to scan your watch lists to find the best setups. Then you'll need to watch these setups for any trigger that will tell you when to enter a trade. Is the breakout/breakdown accompanied by good volume? Are the indicators that you've chosen confirming the break? You need to decide ahead of the trade how much you're going to risk. What sort of risk/reward does this trade offer? How and when will you get out if the trade goes against you?

If this all sounds like patting your head while rubbing your stomach don't despair. Eventually we all develop our own systems. Once we have a trading plan in place that we're comfortable with and are making good trading decisions, it feels a lot like the perfect golf swing. If you've set up properly, then executing the trade should be as easy and effortless as just taking the club back and hitting the ball.

So do your homework; practice good risk management; wait for your trades to come to you and then take your best shot. Just remember...

If you're going to be long... then you'd better be straight.
If you're going to trade well... then you'd better trade smart!