When you're serious about being successful at fantasy football, your competitive streak comes alive. You look at years of stats for players you've barely heard of searching for possible trends. You read reports to find out about possible unreported injuries or upcoming suspensions. You try to predict how trades could cause ripples throughout the league. You don't just watch recaps of the games; you listen to interviews with coaches and players trying to figure out what's going on in their minds. And when you're willing to do anything to win, you don't care about how much time it takes.
Many of these practices apply to trading. Instead of player stats, you look at performance history and price charts. Instead of watching ESPN, you watch CNBC. But the same drive and intensity will help you as you build a trade plan and strategy to guide your trading decisions. Get started with these five trading lessons you can learn from fantasy football.
1. Do your research
Everyone can spot the guy who did absolutely no research before the fantasy draft. He picks the former all-star based on name recognition but doesn't realize he's been battling injuries for years. He picks a rookie QB in the first round just because they share the same alma mater. And he fills out his roster using the same set of widely distributed rankings that every novice uses. The lack of proper research is probably going to cost him any chance to win.
When it comes to trading stocks, the research stage is even more important. To be successful, research is the name of the game. You start by developing a trade plan and trade strategy. Then you can use fundamental and technical analysis to find stocks that fit your criteria. You should also have access to screeners and other tools that help you find exactly what you're looking for. You may think that the guy in your league who receives a dozen email alerts a day with player updates is going overboard but when it comes to trading, the more you know could make a major difference in how you perform.
Say there's a quarterback you think is going to have a great season. You may be so sure of his performance that you decide to grab his favorite receiver as well. The downside to this situation is that you're now especially invested in this one particular team. When that team's bye week comes up, you're stuck relying on low-scoring players to get you a win.
Diversification is also a critical aspect of trading. By drafting players all across the league, you protect yourself from losing out too much if one team suffers. It's the same idea for your portfolio. If you're only trading pharmaceutical companies, a blow to the industry is a blow to you. By trading companies in various sectors and industries, you can help manage your overall risk.
3. Ignore the hype
We live in an era of 24/7 sports news coverage with talking heads promoting every possible point of view. You can get mixed messages in the same two-minute segment with both analysts absolutely certain they are right. So who are you supposed to listen to throughout the season?
Coverage of the markets is no different. There are plenty of experts giving you their advice, regardless of whether you ask for it. Some of the ideas may seem appealing even if you aren't that familiar with what they're talking about.
The truth is that no one knows with certainty what will happen in the NFL, much less the markets. The most reliable approach is to spend the necessary time doing your research and stick to the guidelines established by your trade plan when its time to make a decision.
Come at a Price Going into your draft, you probably knew which five or so players would be selected first. But while everyone is clamoring to get their hands on who they think are the sure-fire bets, lesser-touted players primed to have a breakout season slip through the cracks.
It's the same type of situation with stocks. High demand drives up the price of the most popular companies even though there is no guarantee of performance. Smaller, lesser-known companies may actually have more upside potential down the road and come at a lower upfront cost. By passing on the big name, you may be doing yourself a favor.
5. Keep emotions out
Say a player does commercials for your favorite chicken wings restaurant. He has a hilarious Twitter account. You got his autograph at a meet-and-greet event and he called you "bro". These are all terrible reasons to draft someone to your fantasy football team because they have more to do with how you feel about the player than their actual performance. The same idea applies to picking stocks.
Just because you really like a company, it doesn't mean you should invest in them. Again, your trade plan should dictate what sorts of decisions you make and the better you are about adhering to your plan, the more consistent your results will be. This will also help you avoid emotional pitfalls like "revenge trading", placing a trade just to try to dig yourself out of a hole.
In both fantasy football and trading, the key to transforming your intensity and desire to win into success is having the proper amount of discipline. By applying these five rules to your strategy, you'll be better prepared to succeed in both the gridiron and the markets.