Table Of ContentPage 1 of 8 3
The information in this book was derived from a
live training we did in front of 1,100 traders.
It is an advanced guide to investing in the
currency markets using a layered approach.
Just like Warren Buffet uses several points of
reference before making an investment decision, I
use a 5-step process to make currency trading
decisions.
Please read this guide carefully and take notes. If
you have any questions, then don’t hesitate to
email [email protected]
ThePatternTrader.com
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Copyright Notice. All materials and software published on or used in this
document are protected by copyright, and are owned or controlled by Mark
Shawzin and www.thepatterntrader.com.
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modified and provided you maintain and abide by all copyright, trademark, and
other notices contained in such material or if none, you include the following
copyright notice in such downloaded materials:
© Copyright The Pattern Trader. All rights reserved. All use subject to Terms and
Conditions of Use set forth here.
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CHAPTER 1
The Man Who Got Kicked
Off Wall Street
My name is Mark Shawzin.
By the way, I’m the guy on the left. The little guy on the right is my
son Elon whom I love and adore.
Right now, I’m known as one of the most successful market reversal
pattern traders with over 1,000 traders following my analysis online
today.
However, it wasn’t always like this. I started my career all the
way back in 1979. My father was doing business with a fellow
named Graham Loving who was an investment banker. On the side,
Graham was trading the commodity futures markets. Everything
from cocoa to orange juice to pork bellies to gold, silver, and
anything that had a price fixed to it.
He was doing this very, very simply, using a price action
methodology. You have to remember that this was 1979. I don’t
know if you remember back then, but it was a very turbulent and
chaotic economic time.
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You had gas embargos by the Gulf States, you had gas lines in the
United States, you had oil going crazy, you had gold for the first
time running to $1,000.
The Hunt Brothers cornered the silver market and the silver
ran to $50. It was just a crazy time in the investment markets. At
that time, Graham was trading everything under the sun using a
very simple price action trading methodology. He got a simple
piece of graph paper with an X and Y-axis and he drew a graph with
price and time.
He put cocoa at the top, or live hogs, or whatever he was trading, up
to about 22 different markets. Every day, he would just plot the
closing price from one level to the other, and after a couple weeks, it
would form an uptrend or a downtrend.
He used to say to me, “Mark, I simply want to buy a market that’s
going up or sell a market that was going down.”
Graham was very kind enough to take me under his wing and teach
me all this technical price action methodology.
At this time, I was in my last year of USC Business School
wondering what I was going to do for a career. I was taking
investment courses that taught me how to evaluate investments
based on fundamental information. Basically, you had to examine
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all the investment metrics in order to make a determination when
to buy or sell something.
Now, Graham was just showing me how to make that
determination on some very exotic instruments, looking at only the
prices. It was that simple exposure to Graham that launched my
career. I knew what I wanted to do and I was seeing the money that
he was making.
He was making so much money that when he invited my dad to
join him in a trading account, my dad leaped at the chance.
In 1979, my dad put in about $50,000 and Graham put in $450,000
into a trading account so all told, they had $500,000 about at the
start of the year.
At the end of that year, that account was well over $5 million, again,
just using a very simple price action strategy.
I remember Graham used to come over for dinner or stay overnight
and in the morning, he would get up and watch the financial news
channel.
They would have the commodity clacker boards. They were called
the clacker boards because they were actually metal so that when
the prices turned over, you could hear this constant clacking in the
background.
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Every day, Graham would wake up and gold would be limit up
because of all the embargoes and things of that nature. He was just
making money hand over fist.
Of course, I thought this would be an interesting way to make a
living. So it was based on what Graham exposed me to that I started
building a career and a journey in trading.
My first job in 1980 was at Merrill Lynch. I never just wanted to be a
customer man, taking orders over the phone.
I really wanted to learn how to trade the markets and be financially
independent for myself. I began at Merrill Lynch. I eventually
started a commodity division for EF Hutton and went on to work
for four major Wall Street firms over the ensuing decade.
Over that time, I evolved a trading strategy that was authentic to
myself that was based on the simple principles that Graham had
exposed me to.
The next decade spent on Wall Street, I developed different
nuances and other ways to approach the market that was very, very
successful.
On the basis of that, I was able to attract very high net worth
investor accounts as well as small institutional accounts to trade.
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I was doing fantastically, making money hand over fist and then I
basically lost everything due to a very bad decision I made. At one
point, my brother shared with me some information on a company
he was looking at.
I ended up buying the stock. I never understood that eventually it
came to pass that my brother learned about it by virtue of inside
information, and I got entangled with the SEC in a nine-year
lawsuit.
I tried to tell them that I had nothing to do with it and I had no
inside knowledge.
At the end of the day, I didn’t even pay a fine, but it ended up
putting a blemish and a stain on my career, and effectively my time
on Wall Street was over.
As I tell my son, when one door closes, another one opens. It was
actually the best thing that happened to me. In 2002, my son was
born and I ended up wanting to spend a lot of time with him. So I
decided to be a stay-at-home dad.
To make money, I ended up taking all the things that I learned in
the markets, while on Wall Street, and applied it to my own small
account and myself.
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I very quickly grew it to a sizable account just trading from home.
Then in about 2010, I met Peter Visser. We talked about my trading
strategies. He quickly became very fascinated with what I was
doing. He kept pestering me about doing something online. He
wanted me to sell my services and my knowledge.
Frankly, I really resisted the notion of doing this. I liked being
independent. I didn’t want the pressure of having a lot of retail
investors. I really resisted his attempt for many, many years up until
early 2015. He came to me and he said that he would do all of the
grunt work that I didn’t want to do.
He would do the website, the marketing, and just leave the trading
to me. Eventually, I agreed to Peter’s proposal and we kicked off the
Pattern Trader. It’s become very, very successful very, very fast. It’s
always fascinated me that the statistics in this industry are really so
poor.
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It’s estimated that greater than 98% of traders in the Forex world
actually lose money.
It’s estimated that greater than 98% of traders in the Forex world
actually lose money.
After online trading became available, I started noticing most of the
things that you have been exposed to and taught are dead wrong. I
often get emails from my competitors giving me all kinds of hype
and different ways of trading that I know aren’t going to work on a
consistent basis.
MISCONCEPTION #1
There are several misconceptions and big lies that you’ve been
exposed to.
Of course, the first big lie is that Internet marketers would have you
believe that their past results mean that you can make money using
their systems. This simply isn’t true.
Now, coming from Wall Street onto this online world, I
couldn’t believe what I was seeing.
There was one big lie, and while people on Wall Street would never
fall for it, it was different in the retail Forex world. So let’s put this to
bed...
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