7 Trading lessons to learn from films
The dreaded burnout is a very real fear for anyone trading in currency pairs, young or old, novice or experienced career trader. It’s something you’ve really got to keep an eye on, checking in with yourself and your mental and emotional state regularly so you know you’re still thinking and acting clearly, and not buckling under the pressure.
When you’re trading, you’re constantly bombarded with stressful situations, many of which just appear out of nowhere, so you’ve got to make immediate or difficult decisions all the time… which is sure to take its toll over time, affecting your outlook, your temperament, the way you think and the way you react in times of trouble.
Overtrading, too many losses, extreme market conditions, unrealistic expectations of what you’re going to achieve – all of these can lead to burnout if you’re not careful, but one of the best ways to stop this is, quite simply, by taking a break!
Of course, trading is exhilarating and exciting, which is why you want to do it all the time, especially when you’re first starting out. But it’s important to take a step back regularly, so you can unwind, relax and get away from all the stress… something that will only prove beneficial to your trading when you do go back to it, don’t forget.
That being said, just because you’re not trading doesn’t mean that you have to turn your back on your passion altogether and there are countless movies and documentaries out there that are sure to be of interest from a trader’s perspective. So, with that in mind, here are a couple you might like to check out.
This 1999 movie starring Ewan McGregor tells the true story of Nick Leeson, who once upon a time worked for Barings Bank as general manager of the trading floor on the SIMEX exchange. It charts his stratospheric rise to the top – and his fall from grace. Nick goes on to hide some massive losses, eventually climbing to more than £800 million.
While the flick was not well received by critics (and it has a rating of 30 per cent on Rotten Tomatoes), there are some lessons that can be taken away from it, as an FX trader.
It’s certainly an excellent reminder, for example, to keep emotions in check and not get too cocky or overconfident, as well as knowing when to quit… and actually going through with it. Chasing money lost is never a good winning strategy, after all.
Rewind even further to 2009 and you’ll find Floored, a documentary film focusing on the trading floors of Chicago and charting how computerised trading changed the way the business operated. Those traders unable to evolve and adapt to the new world order were left to fall behind, their skills no longer relevant.
This could well be just the cautionary tale you need to make sure you stay up to date with all the latest technological innovations and advancements, so you can see how they might help you with your trading.
It’s important to keep an open mind where your trading strategy is concerned, after all – and remember! Nothing lasts forever, so the ability to remain flexible with your approach could prove invaluable in the future.
This film also represents a great opportunity for new traders to gain some helpful insights into life as a trader and how it can affect people and the various aspects of their lives.
2011’s Margin Call (with an A-list cast including Stanley Tucci, Jeremy Irons and Demi Moore) takes place over the course of 24 hours at an investment bank on Wall Street at the start of the 2007/2008 financial crisis.
The investment firm discovers that its portfolio is entirely worthless… so the question is: Hang on and implement damage control (if possible), or sell the assets before the news hits the headlines?
One of the biggest takeaways from this film for traders is to never borrow money to make a trade. Only trade with what you can afford to lose, or you could find yourself in a pretty big hole.
But, for traders, it’s also important to be aware that fluctuations in the markets can and will happen – and the key is how you react when tides have turned and how you weather those storms.
Gains and losses are a natural part of the cycle, so always keep your trading strategy in mind and stick to the plan, no matter what happens. There is no room for knee-jerk reactions when trading, after all.
This is a two-part BBC documentary focusing on FX trading in London, New York, Amsterdam and Chicago, including both city-based professionals and those trading from home, showing how they juggle trade and home life successfully.
For new traders, in particular, this would be a hugely beneficial watch, as it will show you just how involved everything is and what you need to do in order to see the successes you’ve always dreamed of.
No list of trading movies would ever be complete without a mention of The Wolf of Wall Street, starring everybody’s favourite Leonardo DiCaprio as Wall Street stockbroker Jordan Belfort.
If you haven’t seen it yet, it’s an incredibly entertaining, exciting and fast-paced film that’s a great watch even if it’s just for the sake of pure enjoyment, but if you’re looking for some takeaway lessons to benefit your trading strategy and approach, there are lots of those as well.
All the entertainment aside, perhaps the main lesson you can take from The Wolf of Wall Street is to make sure that you have a very clear vision of what you want to achieve, why you want to achieve it and how you plan to go about doing it.
Without a proper plan and strategy in place and knowledge of how the markets work, you will find it hard to navigate your way through the world of FX trading.
Another BBC documentary, this time from 1986, which follows various currency brokers and traders, providing some amazing insights into forex. Despite it being nearly 40 years old, the film is still a firm favourite among traders, so definitely well worth a watch.
From an educational perspective, Billion Dollar Day shows you just how important it is for you to know how to manage your losses.
All the professional traders featured in the documentary sustain losses and it’s absolutely inevitable that you will too… but it’s all about how you bounce back from there without letting it affect you that will determine the success of your trading career.
Boiler Room (2000) tells the tale of Seth Davis (played by Giovani Ribisi), a 19-year-old college dropout who runs an unlicensed casino from his house… until he’s offered the opportunity to join brokerage firm JT Marlin as a trainee stockbroker. But all is not as it seems…
There are lots of investment lessons that can be taken away from Boiler Room, but one of the most pertinent perhaps is to make sure you don’t lose sight of what really matters and what life is really all about.
In the film, the characters find it hard to claw back their losses and the effects of this are far-reaching (without giving too much away), taking its toll in all areas of their lives. For the majority of traders, this won’t be too much of a threat – as long as they’re practising excellent money management and have a trading strategy to stick to.
But it’s also a great warning to make sure that you’re not becoming entirely consumed by your trading career. Striking a good work-life balance is essential and you’ll find that taking time away from your currency pairs will only benefit you in the long run and you’ll be better placed to trade well when you do pick it back up again.
Remember that there can be too much of a good thing, so make sure you’re scheduling regular breaks and spending time with friends and family. You’ll return to your desk fully refreshed and with a brand-new fresh perspective.
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