Skill Game

Skill Game www.TripleThreatTrading.com

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Preface



I didn’t want to write this book for a few reasons. First of all, there’s no money in it, and I try not to make a habit of investing time in revenue losing ventures. Secondly, the thought of writing a book on anything, much less trading, seemed odd and somewhat egotistical to me. I’ve read in excess of a hundred trading books during my trading career and I’m not particularly fond of them.

While I find books to be a very good medium for transferring information, they are a very poor method of teaching skill sets. Trade skills, like plumbing, construction and auto repair can of course be learned from a book, but the best method for learning such a skill is through apprenticeship or mentoring. Finally, since I have a variety of courses and programs designed to teach traders using the best method available (the internet) it seemed largely a waste of time; however, I think there is value in sharing your experiences with others.

Learning to trade is much the same process as learning to become an electrician. There is an order to the process. There are certain constants, things that do not change. There are trade secrets that aren’t really secrets at all, rather they are unwritten rules that traders have developed over the years. Some insights can only be gleaned when one works closely with an expert, asking questions and learning skills in real time.

Apprenticeship also dramatically increases the learning curve of the apprentice. Because he/she has instant feedback from the mentor his/her ability to adapt and learn from mistakes becomes faster and more fluid.

Books, on the other hand, contain limited knowledge on a specific subject matter. You might buy a book on technical analysis, but it teaches you nothing about trading. You might buy a book on indicators, but again, such a book gives you only a limited view of how markets work. A book on trading psychology might teach you discipline, but with no idea on how to create profitable strategies you are no further along toward your goal of profitable trading than when you began.

Traders spend years, not to mention thousands of dollars on books that promise to make them money. I wasn’t interested in writing that kind of book.

When I was asked by several of my former clients to write a book on trading I thought to myself, what on earth would I write about? Most of the truths about trading have already been written. What value could I possibly bring to traders that haven’t already been



covered in great detail? Would I expend a great deal of time and effort into a product that would become nothing more than another trading book?

So, I set out to consider what value I could add that was radically different from my peers. I started, and as it turned out, ended my consideration by looking at the trading books that I found most memorable and informative. Some of my favorites are listed below.

1. Reminiscences of a Stock Operator by Edwin Lefévre 2. Pit Bull by Amy Hemple and Martin Schwartz 3. Market Wizards by Jack D. Schwager 4. Adventures of a Currency Trader by Rob Booker

The most notable commonality of the above reading list is the fact that none of them deal with strategy or technical study. They are not “how to” books that try to teach skill sets. Instead, they are stories about traders. One of them, Adventures of a Currency Trader, is a fictional work, but it is one I found extremely enjoyable. All the books tell the story of successful traders, where they came from and the struggles they had in reaching their goals. The stories locked within their pages have stayed with me for years. While I can’t tell you where I first learned about Fibonacci patterns, I can tell you, in great detail, how Jesse Livermore battled back in the bucket shops after losing his first fortune on Wall Street.

It was with all this in mind that I sat down to write out the pages that follow. I hope that you will find the story not only entertaining and inspiring, but that you will take the lessons I’ve learned and apply them to your own life and trading career.

You will no doubt notice that I have kept the chapters short. I did this for two reasons. Firstly, while I am fairly long winded and opinionated in every other facet of my life, as a writer I find I align more closely with Joe Friday and his “just the facts ma’am” demeanor.

Secondly, as a man with a young family I have lots of little people running around my house and I now tend to read in 2-3 paragraph stents. I can only assume that most of you lead busy lives as well and; therefore, I sought to keep the chapters short enough that you could read through them in short order. This should provide you with ample stopping places and dare I say an increased sense of accomplishment.



With all that said, thank you for reading. May God see fit to bless your life with true wealth, good health, long life, great friends, a loving family and a joy for living. I wish you every success and happiness this world has to offer.



Introduction:

Stay Off the Grass

There are no short cuts. This is a concept that I learned early and the hard way.

In 1998 I was nineteen and I had a lot more testosterone and grandiose dreams than common sense. I found myself at MCRD, which stands for Marine Corps Recruit Depot. This seems the most logical place to start my story because in reality it’s where my life really began.

For any of you not familiar with the process of U.S. military indoctrination, every Marine first starts out as a recruit at one of two training bases. One is in Parris Island, South Carolina, and the other is smack dab in the middle of San Diego, California.

I was in California which made me a “Hollywood Marine.” MCRD, San Diego is also known as “the fish bowl” because it’s surrounded by the city and although you can see signs of your former life all around you, you’re stuck inside an invisible wall from which there is no escape. To add insult to injury the airport sits next to the depot. So you get to watch people leaving that God forsaken place fifty times a day. Talk about torture.

I had been at MCRD for over a month. We were getting ready to go up north to qualify with our rifles and after that was graduation.

There was one particular day that did not started out well. When reveille sounded I jumped off the top bunk as I did every morning, but when I hit the floor my left leg failed to respond. It was like my leg was gone. Naturally, I fell over like a sack of potatoes and it took me half a second to gather my senses and determine what had just happened.

Half asleep my first thought, oddly enough, was “I hope nobody saw that.” It was the same feeling you get when you’re walking down the street and fail to see the uneven concrete on the sidewalk. You do one of those half stumbles then quickly look around to see if anyone was looking or laughing at you.

As I tried to stand up I realized that I had absolutely no feeling in my leg. It had gone completely numb. I knew I had to get out in front of my rack or the Drill instructor was going to tear me up. Every morning when recruits wake they must bounce out of bed and



report to the end of their bed to be counted. Failure to move swiftly would result in any number of unhappy outcomes. None of which I wished to experience.

I grabbed the sides of the bunks and literally dragged myself like a cripple to the front of my rack and then physically pulled my leg up under me so I could stand at attention.

I have to admit I was a little worried. I was still half asleep and had no idea what was wrong with me. The drill instructors ran up and down the line of recruits yelling, “Get on line! Get on line!”

As I started to gather my senses I could feel the blood start to run back into my leg. I guess I slept on it wrong or something, but it was a relief to know there was no permanent damage. I have no idea why it happened. To this day I’ve never experienced anything like it. My rack mate must have seen what happened because as the Drill instructor passed us he whispered, “Dude, are you ok?”

I whispered that I was fine, but after that things continued on a downward spiral. You know how some days you roll out of bed, stub your toe and after that it seems like nothing goes right? Well my Quasimodo routine must have really messed up my chi. By the middle of the afternoon I found myself racing back to the barracks on my own to retrieve something I had forgotten.

For the life of me I can’t remember why the instructor let me go alone. It wasn’t common for that to happen. But be that as it may, I was busting my butt to make a fast turnaround time. I knew I was probably going to pay for the oversight no matter what. You always did. There was no way around that, but if I was slow to return it wasn’t going to make things any better.

As I rounded the turn towards my barracks I cut the corner short and ran across the grass in an attempt to shave some time off my round trip. Now, what little grass you could find at MCRD was nothing more than eye candy – a dark green reminder that all the beauty and joy in your life was now just beyond your reach. But cutting across that small patch of green was a bad decision.

From the corner of my eye I saw them. But it was too late.

“AHHHHHHH! Get over here recruit!”

I froze for half a second. This was not good.



Realizing instantly what I’d done and immediately regretting the decision, I ran as quickly as possible to the drill instructor that stood near the doorway to the barracks and who up until now had been deep in conversation with another instructor.

Two things about my situation made me extremely nervous. Number one, I didn’t know this instructor. He was from another platoon, so I really wasn’t sure how he was going to react. And two, he wasn’t alone.

If he had been alone I would have stood a good chance of taking a severe verbal lashing and being sent on my way, but the fact that there were two of them increased the chances that “physical training” would be necessary before I’d be allowed to return to my platoon. Not only that, but any delay in my return would no doubt increase the duration and severity of my punishment later from my own drill instructor.

I ran to a point just close enough to be out of arms reach and stopped.

“What’s your name recruit?!” The drill instructor yelled into my face.

It was common for instructors to yell regardless of the distance between you. They also, for some strange reason, always asked for your name even though it was printed on the camouflage clothing that you wore everywhere.

“Recruit Stapleton, sir!” I shouted back.

“You must be lost.”

“No, sir.”

“What do you mean ‘no, sir’? If you’re not lost then you must be special. Are you special recruit?”

It was never good to be “special,” so I replied with an emphatic negative.

“Well here you are, running all over my grass with no platoon and nobody to hold your hand.”

I stood silent. What was I supposed to say? He hadn’t asked a question so I figured my best course of action was silence.

“Why in the F%#@ are you running across my grass?” screamed the instructor. “You must have lost your freakin’ mind.”



Now I was still new, but I sure wasn’t stupid. Answering “I don’t know” would guarantee me an uncomfortable afternoon. My mind quickly raced through any possible answer that would save me from a thrashing.

In truth, I was shortcutting it. It was pure laziness that prompted me to cut the corner short rather than run the extra three feet to the intersection of the sidewalk. But in cases like this I’ve found that honesty is NOT the best policy. I also knew I had about three seconds at best to come up with a good excuse before things got really bad.

As my mind raced I saw the other instructor start to perk up. He had that look in his eyes that said he recognized “fresh meat.” He must have seen me sweating and recognized me as a wounded animal. He moved to my right just behind my line of sight. This is what I was afraid of. One instructor generally gets tired of you if you just play stupid long enough. But with two of them they feed off each other. I’ve seen nightmare scenarios where the games can last for hours. I shouted out the first coherent thing I could think of.

“This recruit was not looking where he was going, sir.”

It was a terrible excuse, but I figured it was better than telling him I was lazy.

“OH, you weren’t looking where you were going? Tell that to my grass. The ones you just plowed into the dirt.”

“Situational awareness, recruit!” The other instructor shouted in my ear.

I kept my eyes straight ahead I didn’t dare turn to look at the instructor. I kept my body locked at the position of attention, and I prayed.

“You’re the type of recruit that gets his entire team killed because he can’t follow simple instructions. You’re the type of recruit that ends up dead because he’s STUPID! Well I don’t care about you, but if you think I’m going to let you into MY Marine Corps just so you can get a bunch of my brothers killed you’re out of you’re freakin’ mind!”

There was a long pause. I still had not been asked a direct question. And I didn’t dare offer anything up myself, so I just stood there.

“Get over there and fix my grass,” belted the first instructor

“Sir?” I asked.

“SIR? SIR? SIR?” the instructor mocked. “Get over there and stand up every piece of grass that your nasty boot damaged.”



These types of games were typical. I couldn’t even see where I had stepped, but understanding that there was no other way out I ran back to the corner, got down on my knees and started straitening strands of grass.

“What platoon are you with recruit?”

The question literally sent shockwaves through my body. It was the one question I did not want to be asked.

“10-82, sir.”

“10-82! Gormley’s platoon. I guess 10-82 just lets their nasty recruits wonder around unsupervised. I think Sergeant Gormley’s going to get a kick out of hearing how his nasty recruit likes to step all over my grass. OH, you’re done recruit. DONE.”

He was right. He didn’t need to waste time with me. All he had to do is tell my instructor what had happened. It was one thing to screw up inside your own platoon. At least you kept it in house. But to make your platoon and instructors look bad in front of someone else. That was unforgivable.

All this trouble because I stepped on the grass.

“That’s enough recruit. My grass is strait. Get over here!”

I hurried back over to where the two instructors stood and the drill instructor just stood there staring at me. His dead eyes that made me feel no more than an inch tall, and the silence was bone chilling. What was probably only a few seconds felt drawn out while I awaited my fate.

“You had better get your nasty body out of my site and run on back to that undisciplined 10-82 platoon. I don’t ever want to see you again. I’m not going to let you stink rub off on my recruits and pollute my air space. “

“Eye, Sir!” I shouted as I turned to run off. I could only pray that my platoon Sergeant would not catch wind of what had happened.

When I got back to my platoon, without the item that I had gone back to the barracks for, I couldn’t concentrate at the training and Sergeant Gormley was not happy to see me. After the training was complete we marched to chow and then back to the barracks before another round of drill that evening.



For a brief moment I thought the events of the afternoon might just go unreported. But like I said, this was not my day. I saw one of the instructors from earlier appear in doorway like the dark prince himself and I knew the jig was up.

He signaled to Sergeant Gormley for a quick word and after a few seconds of conversation he turned and walked out. Sergeant Gormley appeared unfazed. Maybe it was hoping beyond all hope, but I thought “maybe they were talking about something else.” What a joke.

Sergeant Gormley gave the order to fall out into formation for evening drill, but as I turned for the door I heard him shout, “not you Stapleton. You get to stay.”

Laying face down on the quarterdeck I watched as the platoon marched onto the parade deck into the setting California sun. For the next sixty minutes it was just Sergeant Gormley and me. As I watched them march out I could only wonder what would have happened if my leg hadn’t fallen asleep that morning, and how I wished I could turn back time.

We’re all looking for a short cut. We want maximum results with minimum effort. It’s human nature. It’s that same drive that invented the wheel, the microwave and my personal favorite – duck tape.

But while this human characteristic can be a great blessing it can also serve as a curse. Having worked in some of the worst sales jobs imaginable, I know that one of the greatest motivators in making a buying decision is convincing the buyer of the convenience and ease of use of a product.

Take for example the following 2 sales pitches.

Sales Pitch 1.

The trading program I’m offering is absolutely the best program I’ve ever seen. The traders coming out of our program have seen massive results and I’m confident that if you follow the plan I’ve laid out that you’re going to see similar results. It’s going to take hard work. The program is an intensive 12-month emersion program that requires you to attend classes online 3 days a week for 3 hours. There will be weekly homework assignments, which will need to be turned in and will, also require a trip to Chicago for 2 weeks of “evaluation.” Failure in any area will result in you being forced to retake the



section (at your own expense) before moving forward.

I don’t make guarantees because ultimately success or failure will depend on you but I promise if you give me 100% I’ll teach you everything you need to know to make money in the market.

Sales Pitch 2

Make massive profits in as little as 15 minutes a day. No lie traders. If you think you have to spend hours in front of your computer every day to make money trading THINK AGAIN.

Up until now the secrets to successful trading have been closely guarded by a select few on Wall Street who wanted to keep the knowledge all to themselves. But now, with the help of more than a dozen professional traders we’ve taken over 150 years of experience and combined it into a trading system that has produced an incredible 956% return in just the last 90 days. But I don’t expect you to take my word for it. Just look at my personal trading record from my LIVE account. (Insert phony, unverifiable trading results that show unrealistic return)

Stop giving your money away to greedy Wall Street fat cats and start trading like a pro. I’m so confident you’ll make money that if, for any reason you aren’t happy I’ll give you a full refund, Guaranteed.

If cost was not a consideration, which of these two pitches is more appealing? Now I know some of you are saying, “Jason, I’d pick number one because I’ve already been through number two and it doesn’t work.” You’re right but by simply making that statement you actually prove my point.

WE ALL WANT A QUICK FIX

We want to believe that the second option is possible. We want someone to tell us that they’ve traveled the road and that they can somehow magically teleport us to the end. Some of us are literally praying that someone will come along and solve all our problems with one simple system or some nugget of information that suddenly opens the flood gates of knowledge and makes all the confusion clear.

Let me save you any more disappointment. That guy and that system simply don’t exist. The traders who are successful are survivors. Each of them has a story to tell and most do not begin well. I don’t know a single successful trader whose story reads like this:



I was consistently losing money until one day during a random internet search I came upon a guy who told me that if I was willing to invest a $200 that he would show me the secret to trading millions, and boy was he every right. After purchasing his product all my trading wows have evaporated. You won’t believe the success I’m having now. My system literally trades for me and produces me a six figure a year income. That guy and his strategy totally changed my life. Man, am I glad I fell backwards onto his sales page.

Some of you laugh because you recognize that YOU are trying to be that guy. In truth most successful traders I know talk about how hard they’ve worked. They talk about the mentors they’ve had and the years of ups and downs the market has given them. They talk about a love for trading, and about how the money is simply a byproduct of doing with they love and doing it well.

So why do we as humans, and more importantly as traders, always seem to be looking for the shortcut to success?

I think for traders it’s largely a lack of commitment. Most of the aspiring traders I know have never really drawn a line in the sand. They’ve never really committed to the process of becoming a trader.

Think about your own career. I would imagine that many of you went to college. Now, I’ve never been there myself, but I hear it’s lovely. But I digress, at some point during school or college you had to make a decision. Was it going to be a degree in business or sports medicine? Did you want to make the big bucks by shooting for a degree in economics and finance, or did you decide to get a poverty degree by graduating at the top of your class in sociology or philosophy?

No matter what your choice at some point YOU MADE A DECISION! You had to. The halls of higher education require it. You made a decision that set into motion a series of events that radically changed the direction of your life forever, and all because you made a conscious decision to move in a specific direction toward a defined goal.

What about now? How often do we make life-changing decisions that affect the direction of our lives forever? Answer: not often.

Let me illustrate what I mean with one of the best examples I can come up with – weight loss. I love the correlation between losing weight and trading. The success rate is about the same, and almost everyone can relate when I talk about trying to drop a few extra pounds.



Many of us have gone on a diet to lose a few pounds before a big event like a wedding, or to get that swim suit body back before summer; however, few of us are able to keep unwanted pounds off indefinitely. Most of us spend our time in limbo between strict diet and exercise and a general disregard for our health as we head back for a third round at the Chinese all you can eat buffet.

So why is this so hard? What is it that separates people who simply diet away the pounds and those that keep it off? Commitment. People who lose the weight and keep it off don’t view their change as a short-term diet but rather a change in lifestyle. It is a line in the sand that says I’m going to live my life by a different set of rules, and every decision that I make from this day forward with regard to my heath will be made with my new commitment in mind.

Few of us are able to make that sort of lifestyle shift. In fact, there are more people who are willing to go through dangerous surgeries, having their stomachs stapled or rubber bands tied around the base of their gullet than there are people willing to radically change their eating habits and lifestyle.

Now this isn’t a book about sales or about dieting. It’s a book about trading. But I submit to you that your failures thus far in trading are a direct result of your inability to commit yourself fully and completely to becoming a professional trader.

This is why most traders fail. It’s not because they lack the intelligence or the secret system that produces winners. Traders fail because they choose to dip their toe in the trading waters rather than closing their eyes, holding their nose and throwing themselves into the deep end.

This is why traders will take Sales Pitch #2. If they stopped to think about it objectively, they would know that there is no possible way they could achieve a 956% return in 90 days. That’s a 318% monthly return. For you mental math challenged folks out there, let me break that down for you.

Starting Balance – $10,000

End of first 90 Days – $105,600

End of 180 Days - $1,115,136

End of 270 Days – $11,775,836

End of your First Year – $124,352,829



That’s $124 million in your first twelve months with only a $10,000 investment. It’s utterly ridiculous. I’ve seen products that make these types of claims sold for less than $40, but do you think this keeps people from buying them? Not for a second.

But that’s not the thing that really gets my chicken. You see I can stomach people getting sucked into this junk once, but what really gets my Irish up is when I talk to traders who tell me they’ve spent thousands on products that promise radical returns with little to no effort.

THEY JUST KEEP GOING BACK FOR MORE!

If have not expressed it clearly enough to now, then let me be very clear. There are absolutely no shortcuts. There are no magic systems. There is no secret knowledge that someone holds that can unlock the door to riches in the market.

In order for you to achieve success it will require a total commitment on your part, along with diligent study and practice. If you are unwilling or unable to make such a commitment then my advice is to lay down this book. Don’t trade another nickel. Close out your accounts and never attempt to trade again.

I say this to save you both a great deal of time and money by dabbling in an industry where only the very best in the world win over time. Without that kind of commitment you don’t stand a chance.

But for those of you who are sold out. Let’s begin.



Chapter 1

The Kansas Hayseed

I don’t know when I first became interested in trading but I can remember when I became aware of the concept of a market and the fact that you could make money by picking which direction it would go.

I grew up in a tiny town in southwest Kansas. Kansas sits landlocked in the middle of the continental United States. With the exception of Kansas City and few other small cities in the east, the state is largely a collection of rural farming communities. My hometown, Sublette, was in the southwest corner of Kansas near the Colorado and Oklahoma boarders. The town encompassed about a square mile and boasted a population of around two thousand people.

We had move to this sleepy town when I was nine. My father had taken a position as the district attorney, and the district court house was located in Sublette. It was my father’s hometown, the place he’d been born and raised.

It wasn’t until later in life that I realized this move more than likely had less to do with wanting to return home and more to do with a lack of options. My father’s law practice had run into problems. He had partnered with another lawyer and, although I’m not aware of the specifics, when things turned sour his business partner left the practice and my father almost went bankrupt. I remember being seven or eight years old when we had to move from our large four-bedroom brick house on Main Street to a tiny two-bedroom rental when times got tough.

Being so young my recollection of these events is not the best, but I do remember that during this time my mother was pregnant with my sister. My brother, younger than me by about three years, and I shared a small room in that tiny two-bedroom house. Like most kids, we had no idea of the financial difficulty we were facing.

Now that I am a father of three, I think about the amount of stress my father must have been under. His business had failed. He had been forced to sell the house we lived in and move across town to a rental as he tried to keep the bills paid and provide for my brother and me, all the time thinking about the child he had on the way with no clear concept of how he was going provide for us all.



That’s why, when the opportunity to move us back to southwest Kansas presented itself, my father jumped at the chance to move back to a world more familiar where he would no doubt have the support of family and old friends.

I remember at the time feeling a great deal of excitement about the move. My father was very upbeat and my mother, if she was not excited she certainly put on a show. We moved into a small three-bedroom home next to my grandparents on the family farm. In reality, our three-bedroom house was a doublewide trailer on a brick foundation. The trailer had been constructed on that location years ago by my grandfather for the purpose of providing a home for his family while the construction of their permanent home was being built next door.

That home now sat only about 100 yards away and it was at this time that I entered into the phase of my life that I lovingly refer to as my childhood. I was a country boy who grew up on a farm in a doublewide trailer outside of a small town in southwest Kansas.

My grandparents, farmers by trade, had done very well in their chosen field. To give you an idea of what I mean, my grandfather was born in and grew up in a sod house. A picture of him as a small boy no older than two, standing outside that house, is still part of our family photo album.

By the time my grandfather returned from college, his father had already built a successful farming business and my grandfather, now back with a fresh degree in agriculture and business set out to join his father in the family business.

As my grandfather tells it, upon returning from college he noticed that land prices in Kansas were extremely cheap relative to other areas in the U.S. He suggested they begin buying up land as it became available. They were also one of the first to begin irrigating their crops. Up until then farmers had been at the mercy of Mother Nature to provide the water needed for the corn, wheat and soybeans grown in that part of the country.

I am quite sure some of these facts could bear some scrutiny, but I tell you all of this simply to provide some backdrop for how I first became aware of the market.

To a small boy of eight or nine, my grandparent’s home was a mansion. We were small town people and my grandparent’s home was by far the biggest I had ever seen. It was a ranch style home with a flat roof. It had two huge sitting areas with a fireplace that separated the two. The kitchen had a large island and during holidays and Sunday dinner it was always filled with ladies as they prepared the holiday meals.

Toward the back of the house were two bedrooms that used to belong to my father and



aunt. The third bedroom was the master. I remember thinking, “their bedroom is as big as our house.” Naturally the room was not that big, but it was no doubt the biggest bedroom I’d ever seen.

Between the living room in the front, and the bedrooms in the back, lay my grandfather’s office. It was a small room compared to the rest of the house but not tiny. I can remember walking in as a boy and marveling at the huge wooden desk and large, dark bookshelves.

On the desk sat a small monitor on top of a small receiver box. The system was a DTN service. DTN is still in business today. They service the commodity markets with real time quotes, charts, and trading help. But back then; there was no Internet, yet DTN was still able to provide real time charts along with news and weather via a small satellite.

Several years earlier my grandfather had gotten involved in commodity trading. It seemed a natural fit for a successful farmer who had an inside track on the market he was trading. Over the years he took courses and refined his skills, so by the time I was old enough to remember watching him in his office cycling through charts and reading weather reports, he was already a very successful trader and investor.

I have more memories of watching my grandfather work from that desk, managing the farm and his investments, than I do of him working in the fields. It is strange some of the details that I can recall with vivid accuracy and others that I cannot remember at all. On some level I think the picture of my grandfather sitting at that desk has anchored me in my own pursuits. Like the picture of Andrew Carnegie at his desk, handling the business of his steel empire, my grandfather at his desk provided me a real life image of success. Next to him sat the market. It is still a significant image memory for me.

Now, I have ready many books from traders and investors who talked about when they were boys and how the used to read the Saturday paper and watch the stock quotes. They make it seems as though their success was destined by divine providence. It’s as though the markets and they were made for each other. My story is about as far from that as you can get.

I’m no child prodigy. I wouldn’t even consider myself all that quick. I tend to learn best by banging my head against the wall until I realize it hurts and stop. So, for those of you who think you need some kind of special, God-given talent to succeed as a trader think again. I’ve seen some real knuckleheads make a lot of money trading. You don’t need an iron will or “guts.” What you really need is discipline. I believe discipline is the bedrock of anything good that has happened in my life. All my successes in the military, in business and in trading have come from being disciplined in my approach and single



minded in my pursuit.

This book is not meant to be an autobiography (who do I think I am – Obama?). No, this book is designed to help you become a more successful trader using my story as the backdrop.

I tell my memory from childhood for two reasons. Number one, my grandfather is a success story. Although modesty would prevent him from ever discussing it publicly, he has been able to achieve a level of success that most men have not. He did so honorably, not only in his profession but in trading as well. When I first began to consider trading as an occupation it was his success that gave me a belief that it was possible. As we’ll discuss later, believing success is possible will be critical in your ability to achieve what you want in trading.

The second reason I tell this story is to illustrate that trading was not my lifelong goal. It’s not even my second career. By the time I considered trading for a living I was half way around the world, in the middle of a war zone working with the largest private army and most notorious paramilitary organization on the planet.

It is the markets in general, and not trading that I have a passion for. I enjoy researching investments, discussing economics and politics as much, and perhaps now even more than I love trading. If it relates in any way to the function of a capitalist society, sign me up.

As we go through the chapters that follow I want you to keep something in mind. It doesn’t matter whether you want to trade part time or full time, in the currency markets or as a bond trader. The important thing is that you become a professional trader. It is a distinction we will make clear in the next chapter.



Chapter 2

You’re Gonna Do What?

You’re gonna do what? If you’ve ever been so unfortunate as to share your want and desire to become a trader with anyone you know, this is no doubt the type of response you’ve received. That’s if you’re lucky. In many cases you have been met with a title wave of naysayers and do-gooders looking to steer you clear of the poor decision you’re about to make.

These folks mean well and they really do care about you. They are your parents and siblings, close friends and work collogues, even your spouse. Why would these people ever seek to drive you from your passion and dream if not to protect you from danger?

I may take some flak for saying this, so I apologize to anyone I might offend, but SCREW THEM. Anyone who tells you your dream is unachievable, unreasonable, unattainable or utterly ridiculous is not offering you advice in your best interest.

Now don’t get me wrong. Your goals may very well be unreasonable and utterly ridiculous but they are not unachievable or unattainable. In virtually every instance throughout history great men and woman have had to overcome incredible obstacles and battle a sea of naysayers in order to achieve success. The Wright Brothers, Edison, George Washington, Lance Armstrong, Roger Bannister, Bruce Springsteen, even Rudy comes to mind when we talk about people who have overcome great struggle and criticism to achieve massive success in their lives.

It doesn’t matter what path you choose to take in life, if your goal is to do something exceptional you can plan on being met with stiff resistance along the way. Not only from those that seek to do you harm but from those who care about you the most.

So why is this? Why do those who care about us the most tend to be the ones who are constantly, albeit unconsciously trying to hold us back? I will tell you my personal belief.

There is no shortage of mediocre people in this world. The saddest part about that statement is that most are mediocre by choice rather than because they lack the capacity for greatness. Most, if not all, of us fall far short of our potential. We never truly achieve all that we can out of life for one reason and one reason only. Fear.



Fear causes us to stay in a job that we hate because we don’t want to risk not being able to find another one. Fear causes you to take the vacation to “Cave of the Winds” rather than skydiving the Grand Canyon. Fear causes a single person to stay in on a Friday night rather than go out and meet someone special. Fear keeps you from buying that new house or taking that big promotion because you don’t really think you deserve it. Fear limits. Most importantly, fear causes you to take partial action rather than fully committing to a life changing decision.

As we discussed earlier, this commitment factor is critical to your success as a trader. I want you to sell out. Get excited. You’re about to change the direction of your life forever. Do you believe that? You better. Because if you want that lasting change, if you want to truly be part of the 10% club you’re going to have to have that kind of belief.

“Think of yourself as on the threshold of unparalleled success. A whole, clear, glorious life lies before you. Achieve! Achieve!”

-Andrew Carnegie-

Belief leads to commitment. Commitment leads to passion, passion leads to massive action, and massive action leads to massive results. It really is that simple. Only one question remains – do you want to be a professional trader?

Let me explain what I mean by that statement. When I talk about being a professional trader I’m not talking about working on the floor of some massive prop shop or for a huge multinational bank. I’m not even talking about trading full time. Many of you will find out, as I did, that the solitude of a full-time trader, working from home is not conducive to your personality.

You may love the market and love trading but choose to do it part time while you pursue other interests or passions. I think that is fantastic. I would never have found the love and passion I have for teaching if I had not first admitted to myself that no amount of money made trading would replace the emotional need I had to interact with people.

So when I talk about becoming a professional trader what I’m really talking about is conducting yourself AS A PROFESSIONAL. This means going through the steps of learning the skill of trading, what I call “the language of the markets.” You must write out your trading plan (business plan) and test the viability of that plan in the market before trading with live capital. You must understand money management, trading psychology, brokers, data providers, charting software, execution software, and the list goes on and on.



“Here is the prime condition of success: Concentrate your energy, thought and capital exclusively upon the business in which you are engaged. Having begun on one line,

resolve to fight it out on that line, to lead in it, adopt every improvement, have the best machinery, and know the most about it.”

-Andrew Carnegie-

If you break it down to the core, a professional trader treats their trading as a business. It’s not a flight of fancy. They don’t lock themselves in their basement and tell everyone they’re still working their day job. They don’t flip the computer on for 10 of 15 minutes when they have some free time and look for a quick trading opportunity. They don’t change trading strategies every 15-20 days. They have a blueprint they follow, and they are committed to the plan.

Are you ready for that kind of commitment? Are you ready to get serious about your trading in a way you never have before? If you’ve read this far I have to believe that you are so this is what I want you to do. In the space I’ve left you below I want you to write down this very simple phrase:

I will be a professional trader.

__________________________________________________



Simple right? I want you to print off that last page. Tear off the bottom with the statement you just made and keep it with you. Stick it in your purse or wallet and I want to you review it each day. Say it out loud as you read it.

Now why would I spend so much time and energy in a book on trading talking about commitment? It should be clear to you now. When I work with traders, I know that success long-term comes only from commitment. I have no desire to take money from a trader who lacks the resolve to see their trading through to the end. I would be just as pleased if after talking to me, a trader realized that trading was not their passion and then went out to find that thing that is.

In reality my love and knowledge about successful trading is rooted in a heartfelt desire to see people achieve their dreams. I am a living testament that it is possible. Every day I get to wake up and go to a job that doesn’t feel like work. I spend time with fantastic people from around the world that share my love for trading, and I get to see those traders go from losing money consistently to become successful traders at prop firms and at home. It is a glorious life that I have been blessed to lead.

But through it all I have seen traders who do not succeed. For some I don’t know why success did not happen, but for many I know for a fact it’s because they did not truly commit to becoming a professional trader.

The last thing I want you to do is to start telling people about your new commitment. I know that this is scary and seemingly unbearable. I will save you some fear and tell you that some will laugh at you. They will tell you that you’ll never succeed. They will bring up all of the things that you are risking by making the decision to alter the direction of your life forever, but I want you to remember something.

There is no shortage of reasonable men in this world. True success and happiness is reserved for a select few who ignore the masses and fallow their dreams. If you ask me, what this world needs are a few more unreasonable men.

Skill Game

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