Garry Kasparov is regarded as the greatest chess player in history. His record of accomplishments points to a man who dedicated time and energy into learning the game and becoming a master at it. His peak chess rating of 2851 was the highest recorded until 2013, while his streak of 15 consecutive professional tournament victories still stands.
Kasparov’s accomplishments on the chessboard have inspired many around the world and elevated the game to one that’s seen to require intellect and logic. However, the chess-playing skill that he is well-regarded for has spurred lessons for other areas of life, including financial trading and investments.
In June 1999, Kasparov played against a team of four Grandmasters (collectively known as the World Team) in a game that lasted four months. By his own admission, the world’s best player expended a lot of energy into the game, and while he triumphed over the opposition, he was only able to do so thanks to a deep understanding of strategy.
Kasparov has compared playing chess to painting a picture, an analogy that can apply to the trading world. While many players are not painting masterpieces as they engage each other, it’s often the simple works of art that tend to stand out. In the trading world, simplicity is key.
In financial markets, thousands of traders are competing against each other, with each individual trying to gain the upper hand and ensure good returns. Many traders embrace this global aspect of trading, which has its benefits and drawbacks. Regardless, the best traders are often those, like Kasparov, who understand strategy deeply.
Like chess, the outcome in trading is unpredictable. In both, the player’s (or trader’s) actions can result in consequences beyond their control. Also similar is the fact that knowing the rules and basics is not enough to ensure success. However, by playing chess, individuals can learn a few lessons that translate well to the realm of trading.
Thibaut de Roux, a former senior banking executive with more than 30 years of management and technical experience in global capital markets, is among those who appreciate the role chess can play in preparing an individual for global markets trading.
Expect the Unexpected
While the success stories in global trading inspire some to get involved, many others refrain from trying out of fear of failure and losses. Furthermore, some people start trading without preparing for negative outcomes, something that can be learned through playing chess. The game equips the player to think about the various strategies that can counter a single move. In the real world, preparing for unexpected scenarios – such as politics and natural calamities – can ensure an individual doesn’t panic-trade when things take an unexpected, turn but instead takes the time to analyse every situation strategically.
Early Losses Don’t Necessarily Spell Doom
Mature and experienced players rarely let anything get to them, even when they lose the queen on the board. That’s because their thinking is more big-picture, and while the king is still in play, there’s always something to play for. This is a crucial lesson for traders, helping them to keep their mind on the overall goal and not get upset over early losses. Being able to rely on strategy in trading keeps individuals thinking several moves ahead and calculating how to make the least errors.
Learn from Mistakes
Mistakes are bound to happen, whether on the chessboard or with a trade in the global market. However, one thing the game of chess is good at is helping players learn from their mistakes. It cultivates logical thinking, which comes in handy when the motivation to go for more in the stock market presents itself. When a trader is thinking logically, they’re less vulnerable to abide by luck, chance and greed, instead opting to think through their moves and make wise decisions.
Successful market traders live by three aspects: objective, strategy and tactics. If the aim is to make money, the strategy is the ‘how’ and the tactics are the specific actions that lead to the desired outcome.