Tag Archive for: Forex Trading

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Developing A Successful Forex Trading Mindset Pt. 2

In my previous article Developing A Successful Forex Mindset Pt. 1, I discussed how your trading mindset is essentially a product of three things;

1) Your Neuro-Physiological Wiring

2) Your Mindset of Level of Mindfulness

3) Your Psychological Conditioning

I focused specifically on how your Neuro-Physiological Wiring, specifically how your mind and brain are integrated and help in your development as a forex trader.

developing a successful trading mindset pt 2 2ndskiestrading.com

I also talked about the three main fundamental functions of your brain (regulation, learning, selection) and how these mental functions are critical for building a successful forex trader mindset.

Today I’ll focus on number two from above – how your level of mindfulness helps to build your trading mindset – gearing it towards success or failure.

 

Your Level Of Mindfulness
As a general definition of mindfulness in trading, your mindfulness equates to the degree of awareness and attention to both your inner and outer worlds.  Although this is particularly critical during the trading process (including just before and after), it is also connected to your mental activity and thoughts separate from trading.

Why?

This is because there is no compartmentalized section of your brain just for forex trading.  We didn’t evolve to be forex traders sitting in front of a computer for our survival, so we are using skills and neurons from all portions of your brain.  Because the brain is an interconnected whole, our experiences in life around wealth, mindset of abundance, family, memory, fear, greed, confidence, and more, all effect our trading mindset, and thus – how we make trading decisions in the moment.

mindfulness in trading 2ndskiestrading.com

Particularly true for trading (but also in life), your brain learns primarily from what you attend to in the moment.  In an ode to Star Wars fans, Qui-Gon Jinn once stated, ‘your focus determines your reality‘. Thus, since your mind essentially learns from what you focus on in the moment, your level of mindfulness is the gateway to taking in helpful information (and avoiding non-useful info).  How you perceive information (internally and externally) via your level of mindfulness, is what facilitates your learning process and thus trading mindset.

 

30-80x a Second
I’m going to be sharing a few ways you can build your level of mindfulness to sharpen your mental faculties, but wanted to briefly mention the potency of mindfulness practice.

In a study in 2004 by Lutz et al., he examined various Tibetan meditators as they went deep into their meditation and he found something highly impressive.  Lutz noticed these meditators produced an uncommonly level of powerful and pervasive brainwaves, whereby unusually large regions of neural connections were pulsing in a ballet like synchrony.  These large regions of neural connections pulsed at 30-80x a second allowing them to unify large territories of the mind.

brain neural mindfulness techniques 2ndskiestrading.com

Part of Einstein’s incredible mental faculties were his ability to involve large regions of his brains to work together via the cerebral cortex.  His level of activity and connection (or higher) has also been found in those meditators who have build up their level of mindfulness via a sitting meditation practice.  So a genius level IQ or mental abilities, along with highly perceptive qualities are not reserved for people born with these gifts.

Like all things in the mind, they can be learned and developed, particularly through mindfulness practices.

 

Mindfulness & Wisdom in Trading
As a whole, trading wisdom and mindfulness is not your ability to spot price action patterns in the charts, or understand proper risk management.  Trading wisdom and mindfulness comes from a few steps;

1) Understanding what hurts and helps your trading process

2) Based on this understanding and experience, letting go of those habits which hurt your trading process

3) And strengthening those that help move your trading forward

As a whole, mindfulness and wisdom in trading are supported by the three basic functions I mentioned in the last article (regulation, learning and selection).  Your brain learns through forming new circuits, strengthening new ones and weakening others.  It selects through experience what is valuable and what is not.

Mindfulness in turn leads to new (and accelerated) learning, since your attention shapes what neural circuits are built.  Regulation is done through a combination of excitatory and inhibitory activity.  Thus, by learning to improve these three processes, you will improve your neural functions, and thus improve your trading mindset.

 

Two Methods For Building Mindfulness
Although there are dozens of methods to help you build mindfulness which will flood into your trading, I will talk about the two that I have practiced for over 12 years now; Yoga & Meditation

yoga and meditation chris capre 2ndskiestrading.com

Over a few thousand years old, Yoga has hundreds and hundreds of scientifically proven benefits, such as reducing fat, increasing muscle tone, improving digestion, enhancing your sex life, glandular function, and relaxing your central nervous system (or CNS).

Your CNS regulates an enormous amount of activity from motor to mental activity to breathing.  Are you mouth breathing rapidly?  If so, you are likely to be more excited, emotional and less relaxed/focused during trading.  Yoga is a great practice to help build both a relaxed CNS, but also to build awareness, both physical and mental.

To really do yoga well, you have to maintain awareness of your entire body, and control your internal energy.  Any inability to do this will manifest in your yoga practice.  Don’t believe me, try and do a balancing pose (like tree pose) and see how long you can hold it?  I’m willing to bet almost any experienced yoga instructor can hold it for much longer than you.  How so?  Through a greater ability to relax their body, mind while maintaining awareness.

Thus, Yoga is a fantastic option for building mindfulness as that is the root of all yoga practice.

Meditation is another alternative, particularly silent sitting, sometimes known as vipassana, shi-ne, zazen or many other names.  More than likely there is a center around you that offers a silent sitting practice, but those who engage this practice fully not only notice mindfulness benefits, but greater clarity, happiness and without a doubt – better neural functioning.

The general goal of any silent sitting practice is to build your mindfulness and awareness in the moment.

Many people wonder how I became a successful trader being self-taught. I am unlikely smarter than many of those I teach.  Nor did I take a single economics or business class in college.  But one edge I had for sure, was my yoga and meditation practice over the last 12 years.

successful trader chris capre 2ndskiestrading.com

This helped accelerate my learning curve as I figured out much quicker what to focus on, what price action setups were high probability, how to build my trading skills and trading mindset to be successful.  If there was one key edge between me and others, it would be this, and the benefits continue ad infinitum – probably the best investment and ROI I could have ever come across in my life.

Regardless, these are a few options for building a successful trading mindset and your mindfulness in trading.

 

In Closing
Your mindset, brain and mental activity is what forms your trading mindset, and thus – determines your level of success.  Mindfulness in trading equates to the degree of awareness and attention to both your inner and outer worlds.  This would mean your emotions, your level of relaxation or excitation, your ability to focus in the moment and detect the order flow in the market, along with how your mental activity is helping or hurting your trading decisions.

Mindfulness increases your learning process by focusing on what is beneficial and profitable for your trading process, while avoiding what sets you backward.

Two practices you can engage in to build your mindfulness are yoga and meditation, which will sharpen your focus and mental activity so you get more out of your brain and mind when trading.

This is part two of the three part series on Developing A Successful Trading Mindset, so stay tuned for the last edition soon.  But I hope this gives you some ideas of looking beyond the strategy to what may be keeping profits and success in trading just out of reach.

Kind Regards,
Chris Capre

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Price Action Forex Trading – Climax & Exhaustion Reversal Bars

In one of my most recent webinars on FXStreet, I talked about a key method for detecting when a trend is over-extended, which is to look for a climax or exhaustion reversal bar.  I had mentioned how from an order flow perspective why these exhaustion and climax bars tend to represent a high probability reversal coming based on the various participants and how they tend to trade trends.

Before I get into today’s forex reversal pattern article which will be an expansion and amplification of this, to recap – the key things you want to be looking for in spotting these exhaustion and climax reversal bars are;

1) a bar that is much larger than the previous price action and ideally the largest bar in the move
2) it occurs at/near a key support or resistance level, or after breaking a key support/resistance level
3) it occurs after several bars have been trending in an impulsive fashion in one direction

Although there are other many subtle clues you can look for to amplify the possibility of these climax and exhaustion reversal bars, these are the three main ones you want to see in the price action to look for a trading opportunity.

The goal of this article will be to demonstrate a recent example of this, how you can trade these price action setups and what to look for from a price action perspective.

I will begin with an example of this in the DOW which gave a really good signal just the other day using this method.  Then I will get into the anatomy from a price action perspective all the key characteristics to identify these bars.  After this, I will discuss how you can trade these using price action with some simple rule based methods.

I will begin starting with the daily chart for the year in the DOW, the general uptrend, how it found a key resistance, and then look into the 4hr time frame to show how price action reacted after breaking the key level.

The DOW Hits Key Resistance

In the chart below, notice how price has a very stable relationship to the 20ema and dynamic support.  It rejects off of it three times before finally breaking below it.  But when it eventually does, it quickly jumps back above it, telling us buyers are still interested in driving this pair higher being happy to scoop this up on pullbacks.

Price action then forms a triple top just shy of 13300 which is the first time the entire year it needed three attempts to break a key level, suggesting there is possibly over-extension in the trend along with some sellers who are willing to hold a line the bulls cannot penetrate.

price action forex trading climax and exhaustion bars Dow 2ndskiestrading.com chart 1, price action forex

In the next chart below, starting with the top left of the chart, we can see how each pullback from the triple top (save the last one) created a pin bar off the 20ema (bars 1 and 2).  This was suggesting the buyers were happy to get back in on the pullback, but still could not break the key resistance just shy of 13300. Price then sold off aggressively for the first time all year, dropping over 500pts in about 6 days.

price action forex trading climax and exhaustion bars Dow 2ndskiestrading.com chart 2

After finding support at a prior pullback level, price resumed the uptrend.  Notice how as it came up to the resistance level that formed the triple top, it formed a doji and inside bar suggesting hesitation for two bars in a row.

If the inside bar had formed after a strong bull bar, it would have suggested a little more strength and possible breakout.  But the hesitation from the day before, combined with the inside bar communicated two days of hesitation and an inability of the bulls to take out a key level.

Now on the next day, price does break above the key level forming a new high. But this ends up failing intraday, then pulls back below the resistance level along with producing a range bar.

One should notice how the rejection to the topside is equal to the downside suggesting false break as a) price failed to hold the gains, and b) there is an equal balance between the buyers and sellers.  Ideally, we’d have a very strong imbalance between the buyers and sellers when looking for a breakout, but we are not seeing that in the chart below.

forex price action trading climax and exhaustion bars Dow 2ndskiestrading.com chart 3

Anatomy From a Price Action Perspective of Exhaustion/Climax Bars

Now that we have highlighted a potential area of contention, I am going to zoom into the 4hr chart to show the exhaustion or climax bar specifically, break down the anatomy of it from a price action perspective and then talk about how you can trade this setup.

Beginning with the next chart, the first bar to concentrate on (which should naturally stand out) is bar 1 – the breakout bar which is the largest bar in the entire series.  Up to this point, we can see consistent buying all the way up to the resistance level with the bulls dominating price action winning 25 out of the 36 candles (69% bull-bear ratio) up to the breakout bar which is bar 1.

forex price action trading climax and exhaustion bars Dow 2ndskiestrading.com chart 4

Now if you remember from the very beginning of the article, an exhaustion or climax bar will generally mark long or over-extended trends.  These bars should have the following characteristics;

a) the largest bar in the series
b) occur near key support/resistance level or on the break of one
c) occur after several bars have 

Why do these bars tend to be so large?  

When trends are over-extended, they have had a lot of time to attract various players into the market, with the institutional players being first, the more advanced players who sniff out the new trend second, and the retail traders third.  The retail traders tend to be last as a whole because they need the greatest confirmation to enter a trend (generally).

By the end of a trend, as the retail traders get in, you have the greatest imbalance between buyers and sellers.  Those who have not profited from the trend will often chase it feeling like they have to make money on this move by buying breakouts instead of pullbacks.  Additionally, the institutional players will try one last push to get as much out of the market as they can – thus producing a climax or exhaustion bar.

Sometimes, this has an additional purpose of not just squeezing out the most of the current trend, but trapping new traders long into the market so when they exit, they can also look at reversing the market using those trapped to fuel the upcoming sell-off.

This is why these bars tend to be larger than usual and the largest in the series.  They will also occur at key levels, especially on breakouts which helps to further trap traders who bought on the break.  So hopefully this explains the basic anatomy of these moves.

Now getting back to the chart,  if price action had maintained the breakout and held above the key resistance level, along with extending the gains, then it would communicate the breakout will continue.  But look at the next bar (bar 2) and how price action responded.  Notice how it immediately reversed back below the resistance level which was definitely a warning sign the breakout could not hold the gains.

In these circumstances, you have to ask yourself;
if the bulls were in control, how come they could not extend the gains?
Where did they go?
How come such a strong bar did not extend price further?
Why did sellers immediately push back?
Why did the resistance level not hold as a breakout pullback level?  

All of these questions should have immediately come into mind because they held the key to whether this was a legitimate breakout or a false break.

But even if you did not ask all these questions, all the ingredients for the exhaustion or climax bar was in play telling you this was likely the end of the move.  Even after bar 2, notice how price then treated the resistance level not as support (continuation) but as resistance (false breakout).  Again, go back to the questions and the breakout just doesn’t add up.  So we have a textbook example of an exhaustion or climax bar.

How To Trade This Price Action Setup

Usually in an uptrend, I’ll look for a second attempt at the key level or a LH (lower high) before attempting to reverse a strong trend.  For those wanting a secondary entry, you’d look for a pin bar, engulfing bar or outside bar, then consider taking it in combination with the exhaustion or climax bar. But the price action should already show weakening ahead of the exhaustion before letting you know the offers will hold.

Most often with exhaustion moves, there will be a second failed attempt either at the key level, or producing the lower high giving you the final confirmation the exhaustion bar is in place and it is time to reverse.

Depending upon which of these situations will present itself will determine how I get in, but if I see any of them and they have all the ingredients, then I’m going to sell that looking for the market to reverse heavily since the trend has become over-extended.  Either it will retrace a good portion of the move, or it will consolidate before making a new leg (up or down).

Now looking at the chart below, although we had in bar 2 a solid bear bar, it barely took out 50% of the gains in the exhaustion bar.  Generally I’d want to see 60+% of the prior bars gains taken out before feeling like the bears are mounting a good attack and thus look for a reversal.  If I fail to see this minimum push-back, I will stand aside and wait for another trigger.

climax and exhaustion bars forex price action trading Dow 2ndskiestrading.com chart 5

Even though this threshold was absent, if you notice bars 3, 4 and 5, they all were being held in check by the level which was the key breakout level, suggesting the market was using this as resistance.  If it was a trap, price would not have made its way to the 20ema (so far away) nor kept producing small candles below this level (should have been above the level).  However, none of these were in place.

The most aggressive entry would be to sell after candle 3 or 4 closed.

Why?

They were weak candles after a strong selling candle just below resistance telling us the buyers were not pushing back with enthusiasm.  This would be one way to get in to this with a stop minimally above the highs of these candles and possible higher.

Another entry would have been to sell below the low of candle 3, or on a close below candle 3 with a stop above the high of candle 5 if it had made a break above the resistance level (which it did in this case, but will not always be the case).

The advantage of selling below the low of bar 4, or on a close below bar 4, is at this point, any traders who are trapped long are starting to exit their longs as the losses are starting to mount and increase since they are below their entry.  If candle 5 does not have a wick above the breakout level, then the stop has to go above the level minimally, but better to have it above bars 3-5 or possibly higher.

One conservative entry would be to wait for a breakout pullback to the 20ema treating it as resistance (not support) suggesting a new relationship to the 20ema.  There are also a few other methods to get into these reversal moves, but these are a few which should give you a good start to trade these setups on exhaustion or climax bars.

In Summary

The goal of this forex reversal pattern article was to demonstrate from a price action perspective how exhaustion or climax bars can and will often represent the end of a trend and what key characteristics you will want to find in these bars.  We went over a really good example of this in the DOW showing how all the ingredients were present, what to look for and how you could identify them.  Then we ended by giving you a few methods to trade these price action setups and find either an aggressive or conservative entry along with what to look for.

I hope you enjoyed this forex price action trading article and found it useful in helping to identify exhaustion and climax bars and how to trade them.

Please make sure to comment, along with sharing the article by liking and tweeting it to pass it on.

For those wanting to learn rule based price action systems and reversal bar trading techniques, access to the traders forum, lifetime membership & more, check out my Trading Masterclass Course.

Kind Regards,
Chris Capre
2ndskiestrading.com
Facebook; 2ndSkiesForex

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Preparation and Forex Trading

Before anything else, preparation is the key to success.
-Alexander Graham Bell

Many times I talk to my private course students and ask them what they do to prepare for the day’s trading. These are the general responses I get;
-Drink a cup of coffee, maybe two
-Check out what announcements are coming out
-Look at the markets and then get ready to trade

And it ends about there.  To me, this is somewhat shocking.  Perhaps because I trained in martial arts, played semi-professional futbol or compete in archery, I have a habit of preparing for anything I am doing seriously, including forex trading. This is the same for forex currency trading – preparation is key. Why?

Think about what you are doing when you are going to trade for the day.  You are going to do all of the following;
-Make critical decisions
-Access long-term memory and use your pattern recognition to find trades
-Come up against your psychological issues around money and Equity Threshold
-Sit down for hours meaning your bodies energy will be less active and more stagnant
-Use the reptilian part of your brain which thinks more of near term rewards instead of long term benefits

Anyone notice a pattern here?

Other than the fourth one on the list, all the others have to do specifically with your mind.  The most important tool you are going to be using while trading is your mind so preparing this is the most critical thing you could do before trading.

Ask yourself the following questions;
-Would a professional futbol player not warm up their muscles before a game?
-Would a football coach not watch video of their team or the opposing team before a game?
-Would a professional archer not take a few shots with the bow before starting a competition?

No – and there is a reason for this.  All professionals know one thing for sure and have one thing in common – they all prepare for whatever their task, skill or thing they have to execute.  And why shouldn’t you?  Why shouldn’t you be preparing your mind before you start your day of trading.

Do you really think drinking a cup of coffee will do the trick?  Are you really going to take an artificial stimulant to get yourself prepared to have a calm mind through chemical means which stimulates your adrenal systems?  How is drinking caffeine going to help you access your pattern recognition skills in your brain, help you keep a calm cool mind when making critical decisions, or keep your emotions in check when things are not going your way?

It is not, and you have to prepare for your day.

 

Trading takes discipline, trading takes diligence, and trading takes the right psychology to trade successfully.   All professional traders have three things in common;

1) They have excellent pattern recognition skills
2) They have tremendous discipline
3) They have the right mentality

If you do not have all of them now, do not worry, these are things you can all develop through the right training.  Since we have been talking about forex currency trading preparation, I’m going to give you a list of things you can do to prepare yourself mentally for every trading day. Remember, you are not catching a football, pulling a bow or striking some opponent…you are using your mind which is your primary tool and the sharper, more prepared this is, the better your trading experience will be.  On top of this, the more you will get out of your trading and accelerate your learning curve.

 

3 Things to do to Prepare for the Trading Day

 

Get up early and shower before you start your day

-Your central nervous system actually needs certain things to get in sync with your body biologically. Getting up around the time the sun does activates a protein sequence in your brain which helps it get chemically prepared to for an intense day of critical thinking.  Showering helps to stimulate your nervous system and wake up your body and mind so you are more fresh for the day. Showering also helps to increase your windhorse which we talked about in my Laws and Mindset of Abundance video.

 

 

 

Do some exercise, whether it be physically or mentally, ideally both

-Each day, before I do anything, before I make any critical decisions or start work, I practice yoga and meditation every day.  Yoga helps calm my breathing which allows me to control my emotions and thoughts while having a body physically healthy to sit for long hours in the day.  Meditation sharpens my mind to help develop awareness of my thoughts and emotions which could influence my trading.  It also helps me think clearly while making critical decisions.  I then spend the last 10-20mins visualizing what I am going to accomplish for the day, how I am going to trade, and what I will do successfully.

At a minimum, do a few stretches since you are sitting all day and at least do some visualizations to program your mind for success.

 

Review your work for the day

-Did you know professional football coaches after each game will spend anywhere from 20-40hrs a week reviewing tape of their last game, how things went, and then look at tape of their upcoming opponents? Sometimes they are spending as many hours as people work in a week, just preparing for the next game. They will make notes, look at several different angles of the games, then prepare some tapes for their players to review to see what mistakes they did and learn from their mistakes.  There are actual poker players who have rooms full of journals with notes they took on players, how they played, what decisions they made, and how the hand played out.

What do you do to review your trading and correct your mistakes?  Do you have a trading journal which you actually fill out religiously?  Do you screen record your trading and make comments of what you were seeing so you can see your mistakes and what you did correctly?  Do you review your systems performance monthly, quarterly or yearly?

Trading is not just sitting in front of the computer when the markets are open, pushing a few buttons on the mouse, buying, selling and putting in stops or limits.  Trading, like all professional endeavors, is about preparing yourself for the immense challenge trading is.  Trading is having a rule-based system so there is no confusion about executing your trades while following proper money management.

Trading is simple, but is often not easy.  It is an uphill climb against your psychologically tendencies to take the easy way out, to gloss over the details, to take short cuts instead of being disciplined.  Trading is about working overtime before and after you are done with your trading day.  Daily forex trading is about preparation, preparing the most critical tool – your mind, so it is sharp as a samurai sword to cut through emotions and confusion, find the direction of the market, and make money.

Ask yourself what you are currently doing to prepare yourself for trading, and then see what more you can do.

Remember to click on the ‘tweet’ and ‘like’ buttons below. Your comments are welcome so let us know your thoughts on this article.

Also, make sure to check out another great article on the topic called Trading Lessons from the Archery Range pt. 2.

 

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Why Michael Jordan Helps My Trading

For the record, I have no idea if Michael Jordan trades.  I have no idea if he even knows about the Forex market or is actively involved in his investments.  Nevertheless, he helps me with my trading.
I have read over 9 books on the man, have his DVD (Michael Jordan to the Max), seen pretty much every game and am constantly reading his quotes.  Why?  Simply put, he embodied greatness.

Many people think he was born with some magical talent to play basketball and nothing could be farther from the truth.  The first time he played, he could barely dribble the ball.  He couldn’t make shots and had none of the moves or skills he was famous for.
Many people only know him when by the time he was already great with the Bulls, or a standout player at UNC – Chapel Hill where he won the National Championship as a freshman.  But few know the journey of how he got there, how he struggled, how hard his work ethic was, what challenges he faced, how he overcame his weaknesses, how focused he was and how he had to make his greatness through effort, discipline, and will.
His Early Years
Michael came from a family of  ‘sharecroppers’ – people who rented the land and shared the crops they produced.  His grandparents were born sharecroppers and worked extremely hard.  They had food on the table but were still poor.  His parents had this hard work ethic built into them and it was a hallmark of their character.  With four children to raise, James (Michael’s father) built his own house on a plot of land (working on weekends) they saved up for years to buy.  While building this house, Michael, the youngest of four, got to see the results of hard work first hand.
Even though his mom had four children, she also worked a full time job.
When the father later started playing basketball with his sons, he never made it easy for them.  They had to earn their wins. Michael being the youngest of 4 had to play even hard since he was physically smaller than his older brother Larry who he played against all the time.   Larry also never eased up on Michael and they played for hours until dark.  From the very beginning, Michael had to earn all his wins.

Later they both joined a youth team where Larry was the star and Michael was just another player.  Although he had athletic skills, nobody thought of him as anything special in any sport he did.  Hard working yes, but not special.
What is interesting to note is his father and brothers were not that tall, some just barely over 5’6″.   But something happened to Michael.  He never stopped growing like the others did when he was as tall as them.  Many people in his family think he willed himself to grow.
Nevertheless, when high school came around, as a sophomore, he tried out but didn’t make the varsity team.  He was hurt and his confidence was shaken.  Being placed on the junior varsity team, after digesting his hurt feelings, he determined to become better.  He worked hard at practice, so much so eventually the other players could not keep up with him.  Even after having a great season with the JV team, when the varsity team was entering the state tournament, Michael was not selected to the group.  So what did he do?  After hearing the team’s manager was ill, he decided to fill in for him.  He wanted to be there so bad, he would get there any way he could, even if that meant carrying towels and gym equipment for the players.
When the season ended, did you find him swimming at the pool or playing games with his friends? No.  He was practicing every day on the basketball court hours on end.  In the next year, he made the varsity team.  Did he start off having great success?  No. He actually struggled, made lots of turnovers, had wild shots and made all kinds of mistakes.  He actually was a disappointment to his team and his coach.
Going into a holiday tournament, his team made the finals.  Although he was playing all right, the game was close.  His team needed someone to stand out in that moment.  This is where Michael came in.  With only a few minutes to play, something happened in Michael.   He got really focused and had an intensity about him.  He just started making plays and shots and steals that it was bringing his team back in the game.   All the hours of practice over the years was starting to kick in.  But there were only seconds left and his team was still down.  Trailing by a point, his team gave Michael the ball.  The team started to collapse on him so he pulled away for a shot.  The ball was in the air while the buzzer sounding.  Michael made the game winner!  There was no fear of losing or of looking like a fool.  There was just the concentration of the moment and what he had to do.  Interestingly enough, Michael made the teams last 15 points of the game.
That summer he was the first student from his school to receive an invitation to the 5-star camp, a collection of the best coaches and players from the country receiving instruction and competing against the top players.  Michael could not believe he was invited and wasn’t sure he belonged.  So what did he do? Practice harder than anyone in the camp.  He outplayed everyone there not through skill, but through having an unmatched intensity.  He received more trophies from the camp than any other player.
Returning home from camp, did he rest on his accolades?  No.  He became possessed.  Starting his senior year, he would go to the gym while it was still dark out and practice.  After school was over, he would practice even more – again till dark.  When the season started, even though he was on the Varsity team, he also practiced with the JV team to get in more time.  After returning home from practice at school with both teams, would he rest?  No.  He would practice some more.  When he started the season, he was a marked man, often finding 2 or 3 people guarding him.  Did he balk or fade under the challenges?  No. He averaged more points in his senior year than the one before even though he was guarded more intensely.
He then went to UNC as a freshman trying out for the team.  Only 3 freshman before him ever started on the team.  Did that stop him?  No.  He worked harder than ever.  In the first game of the year, he got the nod, even through having a bad ankle.  How did his first shot go in front of 11,000 fans and a regionally televised game?  He missed and it clanked off the rim.  Did that stop him? No.  He got over his nervousness, stopped worrying about being careful and played.  He let go of his fears and started playing using everything he had.  And he got better.

UNC eventually made it to the championship game in the NCAA tournament and were playing against another freshman (Patrick Ewing) thought to be the best player in the league.  It was played before 61,000 fans and nationally televised.  Imagine the nerves in being a freshman playing for a game like this. With UNC down by 1pt at the end of the game, instead of giving the ball to their top player James Worthy, the coach decided to give the last play to Michael, a freshman.  With Worthy and Sam Perkins covered by Georgetown, Michael was perfectly open and took the last shot.  He flung a high-arched shot that seemed to hang in the air forever.  It snapped right through and he made the game winner as a freshman.  Michael Jordan just made the game winner in a national championship.  And this was someone who 4 years ago did not even make his varsity team.
Only two days after making the game winning basket and becoming one of the best known players in the country, did you find him relaxing with his friends, drinking at parties or playing games? No. He was back at the gym practicing and getting ready for next season.
I could go on an on about Michael’s accomplishments and many people are aware of his professional career.  But few understood all he went through to get there, and what actually made him great.
How Does Micheal Help My Trading?
I can think of no other person who inspires me more to become better at what I do.  Here was someone who wasn’t born great, but made himself that way.  He worked harder than anyone else.  He was more focused than anyone else.   He was more determined than his peers and never let obstacles or losses overcome his mind.  He used his will to make himself great at what he did.  He faced his fears, doubts, and nervousness, yet he never stopped working on getting better.
Anytime I am tired, or think I have trading figured out, or don’t want to study, practice, work, or get better at trading, I think of Michael.  Its the same reason on a saturday morning at 8am, while others at the university were recovering from their nights of drinking, I was in the library studying for the next 6hrs.  I didn’t graduate a Golden Key National Honor Student because I was smarter than others.  Shoot I barely graduated high school.  I just worked harder than them.  I sat down and continued to study, even when I wanted to get up, or was tired, or didn’t feel well.  When I was playing soccer for a nationally ranked college team and had set three records the prior year, did I relax and sit on my accolades?  No.  Anytime we did our ‘flagpole run‘ from the field to the pole and back (a 3/4mile sprint), I always came in first every single time for the entire year.  Its why I played 330 days a year.
When I lost $50,000 in 30mins of trading, did I give up, stop, quit or say I’d never do this again? No.  I vowed to never make that mistake again and started learning more, practicing more, figuring out where I went wrong and correcting my mistakes.  Anytime I ran into a challenge or faced a major loss in trading (which I had many times over the years), I thought of Michael and never gave up.  I wasn’t born understanding markets or how to trade.   Nobody in my family traded and I did not take one business class in college.  I was a yoga teacher prior to trading and had absolutely no experience in the field.
When I applied for a job on Wall Street, did I let that stop me?  No.  After my first interview, one month later I was being flown out to Wall Street to learn the Forex markets from the market maker.  After intense training sessions, did I rest and have a beer at the bar like the others?  No.  I organized after training sessions with the other trainees so we could study the markets.
When I went to the San Francisco office, I started with a group of 5 others who were all more experienced than I, some with masters degrees in finance or economics.  Did I let that stop me? No.  Although after one day of being 6mins late to work, my boss came on the company chat and asked me a simple question, ‘what time  you supposed to be here?‘ I replied, ‘10‘.  He then asked, ‘what time is it now?‘  I quickly typed, ‘10.06‘.   What did he say?  ‘Don’t ever be late again‘.  And I never was.  In fact, from that day on, I was always early, sometimes up to 2hrs and stayed always past after I was to go home.  I came in on my days off and sometimes worked 7 days a week.  I worked so hard that after a year, the same intimidating boss I had was about to ask me to take a vacation when I took my first.  Even though I had 2 weeks vacation time, I took 4 days.

When I think of any degree of success I have earned in this field, I think of Michael Jordan and how greatness is earned and rarely ever given.  It takes hard work to be great at anything.  It takes never-ending focus and dedication, even after failures.  Its the same reason on a sunny Sunday while I can see others out with their family and friends having fun, I am sitting in front of my charts, studying quantitative data, patterns, doing trading exercises to improve my analytic or pattern recognition skills, and continually working on my weaknesses.  Its the same reason when im training in olympic archery, I am thinking of how it will improve my trading and what I can learn from it.
I actually met Michael once, when he was playing for the Bulls in 1992.  After a home game, I was downtown and was still in the city an hour and half after the game.  I pulled into a gas station as I needed to fill up.  When paying for the gas, I noticed the attendant was distracted.  I asked him what he was looking at, and he pointed to a black Mercedes with the license plates (MJJ JVJ – him and his wife’s initials) and said, ‘that’s Michael Jordan’.   I went over to the car where he was talking to others.  I told him amazing game and how thankful I was for watching him play.  And then I did something a little out there.  Knowing his competitive spirit, I asked him if he wanted to race.  I had an older looking Chevy El Camino which had a hidden monster under the hood.  He looked at it and said, ‘that?  you want to race me with that?’ I calmly replied, ‘yes’.
What happened after is a story for my grand-kids.
Observations of Beginning Traders
I think many times, when talking to other beginning traders they want to take the easy way out. They ask others for trade signals or if their trade will work out.  They would rather have someone else think for them instead of learning how to trade the market themselves.
Nobody ever became great by having someone else do the work for them.  They listen to their minds, have no patience for a trade and want instant gratification.  If their own minds knew how to trade successfully, they’d already be there.  Yet they still do what they want to, not what their training has taught them to do.  Some of them don’t even go through any real organized training or online classes.
They don’t want to fill out their trade journals, or performance sheets, or study their past work. They just want to make money and they want it fast.  Never in Michael’s mind was instant success or gratification.  If it was, he would have never made it.   He did everything he needed to become better at what he did and he never rested, nor asked others to think or work for him.  He faced his fears of losing, of being a fool or wrong and went forward anyway.  I think the reason why so many traders cannot wait for a trade to play itself out is fear – fear of the uncertainty.  This is why they go for shorter trades or close it out because then its certain they know the outcome.  They would rather be controlled by their fears than confront and digest them.  I think newer traders worry about being careful or making a mistake thinking it means something about them, their intelligence or ability.  If you have a long trading career, you will make thousands of mistakes. Stop trying to not to make any mistakes or losses and start trading.
In closing, I’d like to share one quote of Michael’s that I am constantly haunted and inspired by, one that I will never forget which he said at his Hall of Fame speech.
“One day you might look up, and see me playing the game at 50….oh don’t laugh (and here’s the part I will never forget), because limits, like fears, are often just an illusion.”
I hope this has been helpful to you and your trading process, and hope that Michael’s life, story, and example of what hard work can do, will also be an inspiration for you as it always will be for me.
Chris Capre
2ndskiestrading.com
Twitter; 2ndskiesforex