In baseball, even the best hitters fail most of the time. A player with a batting average of .300 actually hits the ball, on average 3 times out of 10. That means only 30% of his swings are successful hits! (The batting average (BA) is defined by the number of hits divided by ‘at bats’. It is usually reported to three decimal places and pronounced as if it were multiplied by 1,000: a player with a batting average of .300 is “batting three-hundred.) A player with a batting average above .300 is considered exceptional. One of the games most recognised players, Babe Ruth, had a batting average of .342 (34.2%). The ability to cope with this constant failure requires a strong mind, a short memory, humility, and a sense of humour. Each miss means the next home run is one step closer.
Players need to be able to process new information during the game in a dynamic and changing environment. They need a coach or mentor who they listen to and respond to. They also need to be able to adapt to changing life situations (marriage, children, divorce etc etc) whilst still operating at a high level. They need to be able to control the level of intensity and keep everything in perspective.
These same habits apply to our endeavours as traders and investors in the financial markets. By being aware of these psychological skills we can better master the traits required to achieve long term success.