The movie is the real-life story of Mahavir Singh Phogat (played by Aamir Khan) who, after being forced to give up wrestling, vows that his son will win a gold medal for India. He's disappointed after his wife gives birth to four daughters. But he eventually realises his daughters have the potential to become wrestlers, so he starts coaching them. The father and daughters' hard work and dedication pay off as they win at the Commonwealth Games and become role models for others.
The movie superbly delivers the message that 'girls are no less than boys'. In that way, Dangal is a must-watch for anyone. But it is also packed with some great lessons for traders.
Wrestling and trading are similar. Trading is a dangal between bulls and bears. And before either of them can have victory over the other, they have to master themselves.
In the opening scene, Mahavir's colleague challenges him to a wrestling match after an argument over the state of Indian wrestling. The colleague was overconfident because he was a state champion. He didn't know Mahavir was a national champion. The colleague's ego is shattered after Mahavir wins both rounds effortlessly.
Likewise, overconfidence in your trading skills can be dangerous. It can give you a false sense of security and can make you believe your views on the markets are always right. This can lead you to leverage far more than you should, which can cause humongous losses and even bankruptcy. History is full of rogue traders like Nick Leeson and Harshad Mehta who were more than confident about their abilities...yet wound up broke.
Recommended reading: Dekha...Maine Bola Tha Na
In a training session, Mahavir advises his daughters to respect the soil (Mother Earth) before entering the ring... 'If you respect her, she will respect you.' Humility is the first lesson these girls learn from their father.
Trading is a business that will challenge your self-esteem daily. Markets can prove you right or wrong in a matter of minutes, and you don't even have the option to argue with it. You may have your own views and forecasts, but markets couldn't care less. They will do what they will. If you want to trade successfully for a long time, humility - and the ability to accept defeat as graciously as victory - is a prerequisite.
Recommended reading: Humility: The Key to Trading Success
When they are ready, Mahavir takes the girls to a local wrestling competition for boys. After initial hesitance, the organiser allows one of the girls to participate in a match. Of the four boys ready to wrestle, the girl choses the strongest. A bystander urges Mahavir to prevent the match. Mahavir replies 'Before you fight a bout, you have to fight the fear of a bout.'
Fear is the most dominant emotion in trading. Conquering it is essential. A wrestler conquers fear with proper training. A trader conquers his fear of being wrong or losing money by developing risk management systems and techniques.
Recommended reading: 4 Trading Fears
- Clarity of Role
Mahavir is strict on the field but soft at home. 'At one time, I can either be a father or a coach,' he explains to his wife who's puzzled by his seemingly contradictory behavior.
It's important to have clear goals and stay objective in the financial markets. Many people mix trading and investing. And that's great. Investing for the long term helps to beat inflation and build a retirement corpus. Trading helps you generate additional returns over and above your investments. But before you even buy a stock, it is crucial you know whether it's an investment or a trade as the approaches are very different.
Recommended reading: The Confused Trader
Mahavir Singh Phogat with his daughters
Mahavir explains the rules of wrestling: One round lasts only two minutes, but if you look closely...it has 120 seconds. The point being you have to wait for the right opportunity and let your opponent make a mistake. You have to wait patiently for just the right moment to score over your opponent.
This is good advice in the markets as well. Good trading, like good wrestling, is all about patience. It can be difficult to sit out when the markets aren't providing any meaningful opportunity. But don't give in to the temptation and take trades. You will repent later on.
Recommended reading: Trade Like Sachin Tendulkar
When to Sit on Cash
- Play Your Game
Mahavir starts coaching one of his daughter again after she loses a number of international matches. He notices in her tapes that she is playing defensive while her natural game is to attack. He explains to her coach, 'If you ask Sehwag to play like Dravid, he would neither remain Sehwag nor become Dravid.'
Traders need to identify their strengths and then strictly play according to those strengths. People will often begin as swing traders or investors but end up trading markets on an intraday basis. Rather than sticking to the process that has worked for them, they give in to the lure of instant profits the moment they see some losing trades or somebody without a process making more money than them.
Recommended reading: Why My Friend's Stock Broker Loves Notebandi
- Right Mentor
The movie makes it clear that having the right mentor and coach is important. Both daughters win one tournament after another under the guidance of their father. But the moment one of them leaves him, her performance deteriorates. She realises her mistake and comes back to Mahavir, and with the right guidance, she is soon back on the winning track.
Trading is similar. It pays to surround yourself with the right set of people who can guide you on the right path. Especially when you are starting out. Proper guidance when you are starting out can hasten your learning curve and take you places you never imagined.
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