Lessons from the Pros

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The Great One

Growing up in the suburbs of Chicago has offered some very exciting sports memories. I was fifteen when the Bears had that wild run to an NFL championship in 1985, I remember the “fridge” even scored a touchdown in the Super Bowl that year. I was in my young to mid twenties during the Michael Jordan Championship years. It was a great few years watching Michael and the Bulls win championship after championship. What many don’t realize is that it was not easy. Michael and his team mates got beat up year after year by Detroit before finally finding a way to get past them and win a string of championships. I think the most important thing I learned from the whole Michael Jordan era was exactly how he improved to the level he reached which ultimately raised the bar of basketball greatness and changed the game forever. What he did that was so different from others was that mentally, he didn’t compete against his competition. He only competed against himself. Had he focused on beating his competition as a measure of success, the best he would have done is be the best by a little. Because he only competed against himself, he was able to remove any ceiling of achievement and take the game of basketball to a whole new level. There was no bar to reach. By competing against himself, the bar was always moving higher.

Growing up, my sport was ice hockey. That and school was all I did for a long time. During my development years as a kid, I had the pleasure of watching another athlete change a game forever, Wayne Gretzky, “The Great One” as they call him. He and his Edmonton Oilers dominated the sport like nothing I have ever seen since. They won Stanley Cup after Stanley cup with ease. They would beat the good teams buy 2 to 3 goals and beat the weak teams by 5 to 10 goals sometimes. The first time I saw Gretzky play in person was against the Chicago Blackhawks who were not a strong team at the time. They scored about 12 goals on the Hawks and made it look easy. It was like an All Star team led by the greatest player that ever played the game. Gretzky holds most of the major scoring records in the NHL today; no one has really come close to those numbers since Gretzky posted them. He scored 92 goals one year. These days, hardly anyone scores 50 goals in a season. What is interesting is that Gretzky was never the fastest skater, he didn’t have a hard shot, and he was kind of a small, thin guy. Today, players are much faster skaters with much harder shots and most are big strong guys, Gretzky was never any of that. How then did he dominate a sport so well and produce records no one has ever come close to breaking? Simple, like Jordan, he looked at the game slightly different than everyone else and that gave him an enormous edge. It all came down to one thing… He said, “Good players skate to where the puck is, great players skate to where the puck is going to be.”  The first time I heard him say that, it really got me thinking. I remember every coach I ever had always yelled, “Get to the puck, skate to the puck!” Even though I was always told that and followed that instruction, it never made sense to me. Once Gretzky made it “ok” not to do that, my game changed forever. I was selected to play for a major Junior team and tried out and made the select training camp at the Olympic center in Lake Placid. Hearing that one line from Gretzky while I was still very young gave me such a big edge. I would always get the puck and be wide open to score because I skated to where the puck was going to be, not to where the puck was, which was still what most players were doing.

A true mental “edge” like he and Jordan shared can be so dominant. Everyone on the planet (and maybe Mars) knew when the Jordan fade away was coming but they couldn’t stop it. Gretzky held onto the puck forever and really didn’t skate that fast with it, so why could no one stop him? Because no one was around him when he got the puck. It took years for others to start going to “where the puck is going to be” because everyone was so brainwashed to think the opposite. So what does all this have to do with an article that is supposed to be about trading? Simple, to have an edge you have to think differently. If you don’t, you will trade like everyone else, and most people lose money so hopefully that is not an option for you.

Let me get right to the point… Gretzky’s edge is something I have always focused on in trading. I don’t focus on where price is, I focus on where price is going to be, which is the what Supply and Demand allows me to do. Furthermore, I don’t focus on trades that have happened like everyone one else is brainwashed to focus on. I focus on trades that have not happened yet. In other words, it is not the “filled” orders that move the market prices, it is the “unfilled” orders that move the market. Knowing what this picture looks like on a chart is my edge. You may be thinking that if I keep writing about this then there will be no edge anymore, I used to think like that also but not anymore. People are so brainwashed to think and do the opposite of what I write about all the time that I am not worried at all about losing that edge. Remember, they always knew the MJ fade away was coming but they couldn’t stop it.

Let’s take a look at a market call from April 3rd where we identified the market high in the NASDAQ for 2012. We identified a supply level from over 10 years ago that would likely be a key major turning point for the global equity index markets. Price in the NASDAQ turned at our level, but what makes this difficult for most to comprehend is this: notice the trend in price when the NASDAQ reached our area of supply, it was up. At that time, corporate earnings were strong and balance sheets from most major corporations looked very good. Most people think that when these three items are in place, you have to buy into a market and price has to go up. Wrong, this is faulty thinking yet most people think this way.

Until you move out of your comfort zone with anything in life including trading and investing, you will never achieve different results. Start to think a little differently about things and a whole new world of opportunity will open up to you like it did for Gretzky and Jordan.

Hope this was helpful, have a great day.

Sam Seiden


DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.