There’s a trading lesson to be learned from Portugal’s Euro 2016 win

As in football, portfolio construction is about the collective.

Robby P.

Football is a team game and no one individual can lead a team to glory.

Take Portugal for example.

They have arguably the best player in world football spearheading their attack, in Christiano Ronaldo.

Portugal’s road to the final was probably the most unexciting way for a team to ever have arrived there, let alone win it.

In fact, they won only two matches in the regulation 90 minutes of all the games they played.

But guess what it says on the trophy…

When it comes to portfolio performance, I’ll take boring any day if it means I’m getting the results.

In 10 years, the history books will simply show that Portugal are listed as the 2016 European champions.

There will be no remarks column.

What Portugal’s victory has proved, is that you don’t need massive wins to win the tournament.

It’s simply about doing what is necessary.

There was no luck involved.

They had a game plan for each opponent they played and managed to grind out results; just enough to make it through to the next round.

Trading should be the same.

If you rely on one trade or stock to be your big winner or your superstar you are going to be knocked out at some stage.

Just like a well-balanced team, it’s about having the right players for the right games to achieve the result you need.

Nobody goes into a football tournament saying “We’ll win this”.

It’s about approaching it one game at a time, one trade at a time.

No team on earth wins every game six-nil.

Sometimes taking a draw every now and then ensures your survival and your longevity in the tournament.

Trading is exactly the same.

Not every trade is going to be a winner and not every win is going to be a six-nil victory.

Understanding that loss is part of the game and managing your results one trade at a time will ensure that you achieve a relatively high level of success.

No single trade should be what makes or breaks you.

Just as Portugal proved in the final, when their superstar and captain went off injured after just a few minutes.

The coach shuffled the team around, employed his “plan B” and the rest of the team rolled up their sleeves and got Portugal over the line.

It wasn’t pretty and they probably didn’t deserve to win, but they did.

In fact, they came from behind on more than one occasion to get through.

If there is any trading advice I can offer in light of this football analogy, it would be this:

•Have a game plan for every trade

•Losses are part of the game

•Sometimes a draw is good enough

•Don’t rely on one trade to carry you through

•It’s not about how many trades you win, it’s the quality of the win that counts

As I mentioned before, trading is about the result, no matter how boring or unexciting and, just like football, it can be easy come, easy go. Having a plan, a system and understanding the game will bring you success.