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7 chess rules that help you become a better investor

Think as a chess master and invest well

By Cosmin ChildPublished 6 months ago 4 min read
7 chess rules that help you become a better investor
Photo by VD Photography on Unsplash


I had a period in adolescence when I played chess very often.

In Drumul Taberei and Cismigiu parks, there were two types of chess players: retirees and me and my friends. That was it… I can’t say I was a nerd in high school or something… I was always an average student but… I liked chess.

Lessons learned from chess and which I have successfully applied in investments:

1. Every move you make must have a specific purpose

Many people react to investments or make transactions out of boredom, to be there, or give money when they make a transaction.

Well, things change dramatically when ALL your transactions have a purpose.

Before making any transaction you must ask yourself: What is the precise purpose of this transaction?

The answer can be: accumulation, parked money for subsequent acquisitions, protection, short-term growth, long-term, dividend, etc. — but it must be clear to you why you made that transaction.

If it is clear to you why you did it then you can use it next time for the next move. Otherwise, it’s just a random transaction.

2. You must make victory inevitable

The purpose of a chess game is to force the opponent to capitulate. That is, to give him a mat.

Checkmate = the moment when the opponent’s king is attacked and has nowhere to move to escape.

So it is with investments. The goal is for you to win regardless of your opponent’s moves (ie short-term market evolution).

You do NOT bet on the opponent’s mistake (on short-term moves) but you force your opponent to get into a situation where he can no longer escape.

3. Sometimes you have to sacrifice one more piece to win

The goal of the chess game is to checkmate, not to save every pawn, horse, or madman.

Not even the queen needs to be saved.

You can sacrifice any piece to win.

So it is with investments. Sometimes I have to assume that you can buy stocks and the decline can continue for a while. You have to take on this pain to achieve your ultimate goal: Final victory.

4. Before the final assault you must dominate the field

Before attacking the opponent’s king, you must dominate the center, have free turns, and have free diagonals for crazy.

Much of the game of chess is “non-combat” — you prepare your ground.

Only then do you begin the final assault on the opposing king. When you have several positions where you can attack when your important pieces are protected.

So in investments… until you reach the moments that matter most in investments… that is the moments of ample declines, you have to prepare your ground, that is: to know very well what strategy you have, to have both defensive and offensive assets, to you strengthen your mindset and resilience.

Only then will you be ready to take advantage of a difficult time and not be swept away by it.

5. First secure your defense and then attack

The first time you make a bypass to protect your king and organize a defensive zone around the king. Then you organize your offensive against the opponent’s king.

So is an investment. The first time you make sure that you have an emergency and safety fund, that you have stable sources of income, that you are healthy, and that those in your family are safe.

Only then do you start riskier investments.

6. You always have to move a few steps forward

Any move you make must determine before you make whether the opponent moves x, y, or z.

It is a fundamental rule. You need to know the options in advance.

So is an investment. Before making a transaction you must already know what it will do if the market takes it up, down, or sideways. That way, nothing will surprise you.

7. Arrogance pays dearly

The biggest mistake you can make in chess is to underestimate your opponent. To consider him weak and incapable of surprises.

The opponent is always capable of surprises when you are with your head in the clouds, impressed by your importance and competence.

You can now be on the offensive and seem to dominate the game and your opponent, in a moment of inattention comes with a turn on the last line of the chessboard and give you a checkmate.

It is the same in investments. You may think that “I’ve seen this scenario before” and act arrogantly on the idea that “I know how it will end.”

It is a big mistake… the stock market is unpredictable and although at a high level, the patterns are repeated, they are not repeated identically.

I can surprise you and prove that they are smarter than you.

The goal is to make your defeat unlikely but always keep in mind that you can lose if you are not careful or simply your opponent is superior to you.

If you lose, then make sure your ego is not fragile and accept defeat with serenity.

I hope you find them useful.

Increase investment!


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