What Third String Football Can Teach You About Trading

05/18/2015 6:00 am EST

Focus: STRATEGIES

Brian Lund, trader and blogger at BCLund.com, tells a story about how high school football is like trade management.

When I was a junior in high school, I played on a football team that was ranked No. 6 in the nation in USA Today's pre-season poll and had three potential All-Americans.

I say "play" in the broadest sense of the word. I was on the team (because we had a "no cut" policy), did all the practices and scrimmages, but I never set foot on the field at any time when the game clock was actually running. I was however "the bomb" in pre-game stretching.

Football was a huge mistake in my life and I have covered the way in which I ended up on the team in a previous post. Basically, what playing football meant to me was being on the "dummy" squad that ran plays against the starting lineup in practice. The term "dummy" refers to "tackling dummy."

I remember the first time I lined up with the dummy "D" against the first-string offense. They were running a "sweep left" play, where the far side guard would "pull" down the line to the left, kicking out the defensive end and creating a hole between the him and the tackle for the tailback to run through.

There were two major problems with this situation as I saw it. First off, I was the 165-pound defensive end. But more troubling was the fact that the guard that would be pulling down the line to "kick" me out was Andy Sinclair, one of the six-foot-four, 275-pound All-American candidates I talked about before.

Andy had always been a big kid. He was one year ahead of me and I had been acquainted with him since I was in first grade. The funny thing about Andy was that even though he was always the biggest kid in his grade (or three grades ahead of him for that matter), he was really a nice guy. I never saw him bully anyone and I even remember him occasionally stopping fights.

My interaction with him was limited to him asking me if he could have my lunch. Not all my lunch mind you, just the vegetable part under the tinfoil that separated it from the main dish in the our school's hot lunch.

Like I said, Andy was a nice guy and never pressured or threatened me for my lunch. I just wasn't much of a vegetable fan back then so I gladly let him have them, unless it was something I liked like corn, and then I would politely decline and Andy would just go on his way. Even back then, he was trying to bulk up for ball.

That was about the extent of my relationship with Andy over the next ten years, and I didn't think it would cut me any slack in our upcoming "confrontation." I decided that my only option was to go at him as hard as I could, putting my faith in that completely nonsensical football cliche that goes something like "you only get hurt when you give less than 100%."

Next: I set up off the line of scrimmage

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I set up off the line of scrimmage, getting ready for my certain death. One of the line coaches, knowing I would be the focal point of the play yelled, "Give us a good look, Lund" ...whatever that meant.

"Forty-two, sixty-eight, hike, hike...HIKE!"

With that, the ball snapped and I charged towards the backfield. Andy was coming down the line at full speed, his trajectory firmly locked on me. I closed my eyes at the last second, sure that my next memory would be one of waking up in the training room to the pleasant scent of smelling salts.

But then something unexpected happened. Andy grabbed me my jersey, smoothly posted me up, and gently walked me back out of the play.

I was alive, but still not sure what had just happened. Was this karmic payoff for all those vegetable offerings or had Andy realized that he could crush me at will and had nothing to gain by proving it here in practice? I assumed it was the latter.

Either way, a great relief came over me and I started to relax. Until three plays later.

Same play. Sweep left. Right guard pulls and kicks out the end.

As the ball was hiked, I ambled into the backfield, and waited for Andy to come down the line, ease up, and walk me out of the play.

I've always been fascinated by the stars. The way they sparkle and shine is a mysterious tease as to what lies out there in the depths of the universe. Problem is, they're not supposed to be out in the middle of the day. However I was definitely seeing them, lots of them from my vantage point laying flat on the ground.

For some reason unknown to me, Andy had changed plans and cleaned my clock on the play. I thought I had him down. I thought I knew what he was going to do. I thought his actions were going to be predictable. I was wrong.

For the rest of the season, I lived in semi-terror, never knowing which Andy I would end up seeing as he steamed down the line, heading straight for me.

Alright, so what does this have to do with trading?

In the markets, you often hear traders talking about getting to know their stocks. And it's true: certain stocks do exhibit a personality that can be exploited to your benefit. However, if you get too complacent, sure that you know the traits of a stock, and that it will always adhere to those traits, you will be setting yourself up for disaster.

You never know what you will get from a stock once you are in a trade, and your only defense against seeing stars is to make sure you have a pre-determined, objective risk level set.

Brian Lund is a trader and blogger at BCLund.com.

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