Vadym and I searched for the right word to encompass our trading style and philosophy and the word we derived was Rhythm. Months ago when we were discussing our ideas and thoughts about how the market works and we interact with it, we tried to describe this with one word. Momentum wasn't necessarily fitting as it doesn't dive too deep into the mental process. Responsive trading we tried but it didn't seem to work much with the mechanical side of trading which is necessary in order to develop the eventual intuitive state that many traders find. We basically wanted a word that would allow us to realize the correlation between the mechanics of the market (rules the market follows) and our part in choosing to become a part of the greater entity.

The football quarterback has to know how to hold the football and learn to throw it correctly. Eventually he/she needs to learn to feel where his receivers are moving and how much to lead the receiver. They become a part of a rhythm with those things around them, whether its other instruments, other players and for us, with what the tape tells us. Having a rhythm with a trade or a market closes your circle from understanding the rules of the trade to having the sense of when to enter and when to exit.

I was asked one day about why I thought EGRP would be a slow trending stock. The easy answer was given but the deeper sense of the trade is something that can't be explained. It was a simple feeling based on past experience both in watching this stock as well as plenty of experience in watching other stocks with the same "type" of action. Eventually, you develop the same rhythm that other talents do. In cases where we aren't in this rhythm, our rules of money management and stop loss allow us continue to learn. Otherwise, we fall into the trap of one trade wiping out a large portion of our portfolio. This does not allow the trader to continue the learning process.

I much rather see traders lose over time, gaining market experience along the way so that when they reach the plateau where the losing begins to turn to the uptrend, they know why they are succeeding. One or two losses and you are out doesn't allow you to learn the trade and you move out of this business in frustration and anger. So we came up with Rhythm and turned into the following Acronym to describe our trading.

Applying Each Letter and Definition

R - Read and Respond

This puts us in our first part of the learning process. Vadym and I teach Tape Reading Principles with our members everyday that are described in the workbook and in this Learning Center. These tape principles are not proprietary, not developed, not altered to fit a system. It is a system in itself that has been around for nearly 400 years. There is no sense of "our method of tape reading" and anyone that tries to change the true meaning simply detracts from its power. It is not just watching time/sales, it is not just looking at the prints. The workbook and this Learning Center show you much more than what this wrong and simple explanation of it is. The learning phase of the workbook and Learning Center is something that Vadym and I will continually discuss with you through any confusion. The concepts may be foreign to you, but they are explainable and understandable with a little effort on your part. After this effort to understand the concepts of the tape reading is completed, the next step for the trader is to respond to its signals. We call these pivot points.

Pivot points are areas where action demands response to enter or sit tight. Not all setups are taken and not all action is tradeable. Two examples: BMCS setup at 21 as a breakout. No action was taken but offered great potential. CCUR setup as a breakout over 6. No action was taken and it’s failing. INKT offered 3 trades. They were all profits on each setup taken. The response is demanded by you, not by the setup itself. Eventually, that rhythm, that feel, will come into you to know which setups cause the response and which don't. If you are at this point, we will continue to develop your feel with you. If you are still at the learning phase of the concepts, do not push yourself and let us work with you to get to the point eventually. Learning to trade is a process, not an event.

H - Hold true to your convictions and decisions.

Traders begin to respond to signals through what the tape tells them, whether it's from a chart or not. When the signal is given and the response is for entry, hold the conviction that your trade will produce a profit. Imagine the success of that trade as the entry is given. Do not let the imagination however cover reality. When the stock begins to speak to you to exit, that enough profit is there for building the confidence...take it. We can work on the holding of trades for longer periods throughout this process of holding true to your convictions. If you immediately doubt your entry, there is no process to develop your conviction. There is no way to progress. The assumption of loss is taken already by way of stop loss, if you enter the trade, trust your decision and give it time to breath.

Y - You are responsible for your trading and acceptance of profits and loss.

The market is our teacher. We are its students. The market will punish us only if we let it. We have powerful tools to regain control of ourselves both tangible and mentally. Stop loss, money management, proper mental understanding , etc. As strong as the market is, it's not anymore powerful than you let it be. Talks of conspiracies, manipulations and fraudulent actions are not things you can control. They happen. Maybe more often than we know about. The point being is that "your" trade, win or lose, is not to be blamed or applauded from such information. Theories of worthlessness such as these do not allow your trading to progress because accountability is no longer yours. It's that big "THEY" entity that rules your trading. You think "THEY" will allow you to win over time? No, so you must regain control of your trading and not develop false ideas about why your trading is the way it is. Do not blame and do not complain. You are responsible for entering and exiting each trade and each market. Your decision, to which you hold true, demands accountability for the rest of the time that that position is open. Once that position is closed, you assess the trade from personal thoughts, why you entered, why you exited. Nothing else matters.

T - Trust yourself

Trader's need to trust themselves and their decisions. If you can't trust yourself, how can you possibly progress? If you are constantly doubting yourself and your decisions, how can you trust yourself to know to take the trade? If trading resides in you, AND IT DOES, then the personal trust that you must offer yourself is an absolute necessity. If you can't trust yourself to respond to the signals and the setups, you will not be able to trade successfully, consistently. If you are in constant anger about yourself or disappointment in why you took a trade, it reflects upon you and your inner self, your self-control. If this is not in an optimal state of mental control, then you are fighting a battle not only within you, but also within the trade itself. If your thoughts are clouded with anger, the clarity of stock action is clouded to. This will not allow progressions. Trust yourself both in decision and your skills to execute the trade.

H - Harness your strengths and understand your weaknesses.

What is it about you that makes you a trader? Why did you choose this business? What strengths about you provide you with the right temperment to trade successfully? You like risk taking, able to make quick decisions, unemotional, etc.? Here are my thoughts taken from a list that Vadym offered me:

• The market exists to give me profits
• Trading is fun, not a frustrating experience
• If the market doesn’t do what I expect then I must reconsider
• Money is not the subject of my focus; stock movement is
• Losing is part of the process of making money. Any particular loss doesn't make me a loser.
• Trading is a game, I know I can win
• Every losing trade is an opportunity to learn. I am learning constantly
• I don't have to be in market all the time. I can wait for an opportunity to come.
• I don't trade for recognition, I don't have to prove anything, others opinion is not of interest for me
• These are my strengths that allow me to focus on the trade, which is the only thing that matters once I take it.

What are my weaknesses?

Plenty, but two major ones: Ego and it constantly nags at me. When I am in a great day, such as 3 straight wins on INKT, I feel less vulnerable. I feel like nothing can touch me. If I was not aware of this feeling, I would certainly have some negative event tell me that I am not this good, usually leading to a large loss. I am aware of this feeling and I control it to some degree, not taking atypical chances. But there are times when my ego inflates my expectations and it's something that needs constant control and awareness.

Another one is the ability to expand my intuitive perception of stock action. I can make 1/4 and 1/2 all day long. But for me, my personal goal and a my ending "nirvana" is to continue the process by which I can take more out of each trade when the risk evaluation is safe and the stock continues to "behave" so to speak. I want to enhance my "rhythm" with stocks that have more potential and it is a very big uphill battle still to do so. It's a weakness, but one that I am aware of and one I continue to develop.

Lastly:

M - Master your emotions

Emotional control is a very tough subject. It comes to me with understanding my traits as a trader. The early emotions of a trader are fear of loss and expectations of great gains. There is no way a trader with these two emotions can progress. The fear of loss does not allow a trader proper risk control having larger stop losses. Greed of great gains in each trade does not allow one to read the stock as it moves. The trader will catch a few nice ones, but the losses tallied in expectations of these gains everytime will outweigh the overall gains. Fear on the other end is a lack of response. The signal says enter, the mind says don't. This is where trusting yourself is big.