Lionel Messi | Expert Systematic Trader

Continuing our series to highlight expert systematic traders that are icons for the next generation of traders, we have the spotlight this week on Lionel Messi.

Yes, you read that right. And I know that your immediate response is that Messi is a soccer icon, who just lifted the World Cup for Team Argentina, and not a systematic trader. But there is a lot that a trader can learn from Messi's skills on the soccer field in the trading field.

So here is a tribute post to one of the greatest players of the game!


Messi walks 85% of the game.

Lionel Messi is known for his exceptional skill and technical ability on the soccer field. One of the keys to his success is his ability to read the game and anticipate opportunities. Rather than running around the field aimlessly, Messi is patient and waits for the right moment to make his move. When he sees an opening or a chance to create a scoring opportunity, he takes it with precision and accuracy. This approach is similar to that of a systematic trader, who also waits for the right opportunities and executes trades based on signals from their trading system.

One way soccer is similar to trading is that both require a clear strategy and game plan.

In soccer, coaches and players spend a lot of time analyzing their opponents and developing tactics and play to achieve their goals. Before the game, every team needs to come up with rules on how they will play the game anticipating different directions that the game can go and the moves the opponents can make. These rules are well-defined, and every player has to stick to them on the field if they have to win the game. Basically, they develop the system to play the game upfront. Games cannot be played discretionarily. Typically inexperienced players and amateur teams try playing discretionarily, but that fails most of the time, and wins are by fluke. A team cannot win games consistently without a system.

Similarly, in trading, investors and traders need to have a clear strategy and plan in place to make informed decisions about when to buy and sell assets. This can involve analyzing market data, studying financial data, and using technical analysis to anticipate different market moves and plan appropriate actions. Essentially traders need to develop a trading system to be successful in the market. Just like amateur players, amateur traders try to do discretionary trading and come up of rules on the fly in the market. That never ends well. There can be random wins by fluke, but consistent results cannot be achieved.

One important thing is that soccer teams must play with their own playbook. They cannot copy the playbook of another team to be successful. While they can study the strategy that another team follows but they will have to adapt to fit their own strengths and weaknesses. It is the same with trading. While people can definitely draw inspiration from the strategies used by other traders, they will have to understand it deeply, know the context, and make it their own to fit their temperament, objectives, and account size.

Systematic traders, like Messi on the soccer field, rely on predetermined rules and parameters to guide their trading decisions. They do not manually scout the market for opportunities but instead wait for their system to identify potential trades and provide signals. Once they receive a signal, they execute the trade according to their plan. This approach can help traders to avoid the pitfalls of emotional or impulsive decision-making and stick to their predetermined strategy.

Like Messi, systematic traders must be disciplined and focused in order to execute their trades effectively. They must have a clear understanding of their trading system and follow it closely, even when the market conditions are challenging or volatile. By sticking to their plan and executing trades with discipline and focus, systematic traders can increase their chances of success in the market.

Lionel Messi is known for his incredible scoring ability, but he is also a skilled playmaker who often creates scoring opportunities for his teammates. In fact, one of the things that makes Messi such a special player is his ability to see the field and make the right pass at the right time, even if it means giving up the opportunity to score himself.

As a trader, there are a few things you can learn from Messi's approach to the game. It is important to be aware of your surroundings and understand what's happening in the market. Just like Messi surveys the field and looks for the best pass, traders need to be aware of the various factors that can impact their trades and make decisions based on that information. Similarly for systematic traders while it is important to follow the system but it is also important to be aware of constantly changing market dynamics to know when not to trade a given system. Example, while a trend following system may yield great results in a trending market but when the market suddenly switches to say a ranging market it is important to adapt and change strategy and not try to score with a trend following system in those environments.

It is worth noting that while both soccer and trading require discipline and strategy, there are also important differences between the two. For example, soccer is a team sport, while trading is typically an individual activity. In soccer, players need to work together and communicate effectively to achieve their goals, while in trading, investors and traders are often working alone and need to make decisions based on their own analysis and risk tolerance. However, traders have an advantage in that they have the ability to backtest their system on historical data as well as forward test it by paper trading before deploying it in the live markets. Soccer players don't have that luxury. The only way to test their strategy is in the live game against their opponents.

In conclusion, soccer and trading have many similarities, including the need for strategy, discipline, and execution. Lionel Messi, with his exceptional skill and systematic approach to the game, is an excellent example of a successful trader-like soccer player. By following a clear plan and executing it with discipline and focus, soccer players and traders can achieve their goals and succeed in their respective fields. While Messi waits for the right moment to make his move on the field, systematic traders wait for their trading system to provide signals before executing trades. This is what creates "winning performance" in an uncertain field like soccer as well as trading.


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