Recently, I was fortunate to join U.S. Olympic silver medalist Billy Kidd for a ski run in Colorado. He was one of the first Americans to win a medal in alpine skiing in the 1964 Winter Olympics, and has also won gold at the FIS Alpine World Ski Championships in 1970.
While he’s long since retired from professional skiing, Billy is currently the spokesperson and Director of Skiing for Steamboat Springs, CO. Several times each week, Billy takes off from the top of the gondola and skis with those who gather to join him for a run down the mountain.
The day I joined Billy and a group of about 20 skiers, we encountered heavy snowfall. Billy didn’t seem to notice. We headed for our run down the mountain, and every few hundred yards, Billy would come to a stop. , Then he gave us a lesson on how Olympic skiers moved and what their thought processes were as they raced down an racecourse.
As I stood in the snow and listened to him talk, it immediately struck me how much downhill racing was like trading in the stock market. I immediately took everything he said and connected it to trading—and it fit perfectly!
Here are some of the best lessons from the former Olympian that traders can apply directly to the market.
Preparation is Vital
“Olympic skiers stand like this,” Billy said, standing perfectly straight, slightly leaned forward, poles out in front and slightly to his sides, eyes alert.
“But beginning skiers stand like this.” He stood slouched, with his arms and poles at sloppy angles, staring vacantly into space. We all laughed, but we got the picture.
Trader connection: Those who dive head-first into their desk chairs five minutes before the market opens (or after!), are not poised, alert, and aware of the market environment. They will be at a disadvantage to traders who are calm, confident, and prepared with their pre-market analysis.
Stayed Focused on Your Track
“When you’re skiing 80-90 miles an hour downhill on ice, you have to keep it simple,” Billy says, grinning. I shivered in the snow, trying to imagine flying down the slope at that speed. Simple … really?
Trader connection: As traders (and sometimes we feel as though the market is sliding 90 miles per-hour downhill–on ice), we tend to look at a million indicators and listen to every talking head’s opinion on the financial networks. That can end up confusing us, more than helping us, and lead to false starts and untimely exits. One way to keep it simple is to become a specialist in one or two sectors or industry groups, and get to know a selection of stocks in each that trade in an orderly manner. Then, become an expert in one or two trading setups that you execute well. Leave the rest alone—a great way to keep your approach simple. If the market slides south on a slippery, icy slope, you can choose to stay in or head for the sidelines, and you’ll do so with confidence.
Be Alert to Your Surroundings
“An Olympic racer has to stay totally aware of his or her environment,” Billy offers. “One small gust of wind can slow you down and keep you from winning the race.”
Trader connection: Especially during volatile periods, traders need to remain aware of the market environment, headlines, economic reports, earnings reports, and any signposts that could impact their trades. I’m thinking right now of that “small gust of wind,” in the form of Wednesday’s (Feb. 15) bearish day on the NASDAQ (QQQ). While it may turn into nothing but a single down day on high volume, I’ll keep an eye on it as a possible clue to potential volatility ahead.
Use Flexible Strategies
“You have to have a plan,” Bill says. “Everything you do, you have practiced so many times—your body, your visceral response, your mental approach—everything has to be in place. When you’re racing down the mountain, you can’t slide to a stop and try to form a new plan. ”
Trader connection: Traders, like alpine skiers, may not have the ability to adjust too much on the fly. While longer-term investors do have time to change mid-course because their risk parameters are obviously wider, many times, short-term traders have to already know what they are going to do. As a trader, your plan has to be in place to fit any eventuality. It’s tough—if not impossible– to reform an intelligent new plan, when the market is falling like a stone.
As our skiing lesson came to an end, and the group broke up, I was able to talk to Billy one-on-one for a few minutes. We discussed the mindset of an Olympian, and how (just as in trading), it is key to continue to strive for your personal best, every day.