In my trading past I have often thought about and tried to hit the “home run trade”. And yes I have hit many home run trades, but over time I learned that becoming a better all around trader was more important and more productive.
We are deep in the heart of baseball season here in the United States. As I thought about hitting home runs, baseball and trading… I thought about Babe Ruth. So in doing a little research, I found that Babe Ruth was not just a great home run king, he was a great overall hitter. He would have probably made a great trader today. Let’s call him a Babe Ruth Trader.
A Great Hitter
Babe Ruth was the original home run king of baseball. In 1923 he broke the record for the most home runs in a season. And eventually he became the lifetime leading home run hitter with 714 home runs. This was a record that lasted for 39 years.
In 1923 he also broke the record for the highest batting average. And his lifetime batting average of .3421 is tied for 9th in Major League Baseball history. So that tells you that he wasn’t just a great slugger, but he was a great all around hitter.
But there is another statistic that tells the tale. Babe Ruth had 1330 strikeouts in his career. Now there are many more players ahead of him today but back then, that record stood for 29 years.
So when you look at his stats it tells you that he was fearless. He was not afraid to strikeout. He was willing to go for the home run when it presented itself. But he also hit singles, doubles and triples to be productive and produce on a regular basis.
Babe Ruth Trader
So being a Babe Ruth trader means that you trade without fear. You are not afraid to take losses because you know they are part of the game. You are trading without fear because you trust yourself to follow your plan and trade within your account parameters.
As a Babe Ruth trader, you are productive so you take what the market gives you. Sometimes those trades will only be singles and doubles, but those will offset the losses (strikeouts).
And finally, when the market presents you with the opportunity, you stay with the trend and trail a stop. You never know when a trade is going to turn into a home run trade or even a grand slam.