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What Gym Memberships Teach Us About the Markets
By Blake Young |
Picture this: it's January 2nd, and gyms across the country are packed with people committed to their New Year's resolutions. |
Fast forward to February, and those same gyms are nearly empty. Yet everyone's credit card is still getting charged $50 a month. |
This phenomenon is known as the gym model. When someone signs up for a gym membership, the gym knows they can charge a monthly fee of $50, yet only about 15% of members will consistently use the facility. |
The gym can essentially oversell its capacity by five times or more. Members continue paying for good intentions as the relatively small fee gets pulled from their accounts each month. |
This is great for the gym but not so great for the member. |
I'm not saying gym memberships are ineffective or not worth the cost. I am saying, however, that we have to use the membership to get the value. |
Many would argue that you need motivation to get to the gym. I disagree. |
Motivation might work once or twice, but I believe the stronger tool to get you where you need to be is accountability. |
What I have found provides success is having an accountability partner or a gym buddy. This is someone who is expecting you to show up and follow through. |
Even just thinking that my gym buddy wants to go or might be there on a specific day greatly increases the odds that I show up and start my workout. |
It doesn't matter if the gym buddy actually shows up or even wanted to go. The accountability wins. |
From Unused Memberships to Unfollowed Systems |
Here's where trading mirrors the gym model: many traders pay for education, buy systems, and subscribe to services they never fully utilize. |
They have the equivalent of a gym membership with all the tools they need. But they lack the accountability to use them consistently. |
Just as gym members pay for access they don't use, traders often possess profitable strategies they fail to execute. |
This same principle of accountability changed my trading from mediocre to successful. The interesting thing is that the accountability partner doesn't even have to be real; it just has to be perceived. |
Years ago, in the early 2000s, I was having mixed success and couldn't seem to gain long-term traction in my trading profits. I determined I needed to follow my rules and be accountable to someone. |
I started a blog and began posting every trade setup I was taking. I had no idea if anyone would look at the trades, follow them to the exit, or even know the blog existed. |
Just posting the trades and being accountable enough to write down each trade and follow it through made a huge difference. |
Knowing that potential readers might see my trades changed everything. Even an anonymous internet audience provided accountability. |
I wanted each post to be clear. Every trade had to be justified with a system and logic rather than emotion and hope. |
The accountability partner could have been an individual, a group of people, or simply the possibility of someone reading my work. It didn't matter. |
I was holding myself accountable, and my win rate went from near break-even to results beating the indexes. |
Research shows that to find success, you need a system that is consistent and provides clear, concise entries, exits, and risk management. |
When we document our trades and are accountable to someone, we have a higher likelihood of following that system and its rules. |
The best system in the world does us no good if we don't follow it and manage our risk. |
Your Action Plan |
Adding accountability to your trading starts with three steps you can take today: |
Find a trading partner - Join a trading community or forum where you can share your setups with at least one other person who trades your style. Start a trade journal - Whether it's a private blog, a spreadsheet you share with a friend, or posts in a trading group, document every trade with your entry reason, exit plan, and risk parameters before you execute. Schedule regular reviews - Set a recurring weekly or monthly meeting with your accountability partner to review your trades, discuss what worked, and identify where you deviated from your system.
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Similar to achieving our physical fitness goals, our financial fitness results will be enhanced when we follow our plan, document our efforts, and have an accountability partner. |
Don't let your trading system become another unused gym membership. |
Success comes from showing up and using your tools consistently. |
Blake Young
Senior Market Strategist, TheoTRADE |
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