give the trade a chance to work by accepting some heat as the amateur crowd dissipates. Once buyersbegin to diminish, selling pressure will take over, pushing stockslower during breakdowns or down trends. When selling pressurediminishes, buying will take control, driving stocks to rally asnew support levels are formed on up trends. Trading support andresistance levels will leave clues where these levels are beingformed. By paying close attention to liquidity issues such aswhen stocks get thick and thin, stocks that get thick relative towhere they were (thinner) become less volatile and highlightwhere support or resistance may be building. Just remember,when support levels don’t hold, there is a greater propensity forstocks to trade lower, changing the prior support level to resis-
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tance. This would indicate an impending down trend. Whenresistance levels do not hold, this would indicate a strongerpropensity for rallies, causing the prior resistance to form a newhigher support level, hence an up trend. Learning to pay attention to the ranges within which a stock trades allows you toeither trade with the range by selling at resistance and buyingsupport or to recognize a change in the pattern and use otherindicators to trust a new trend line being established. Either way,the best way to trade ranges is to know the stock’s habits andcharacteristics, and that comes only through close observation.This argument supports the wisdom of becoming a specialist ina few stocks and getting to know them intimately through realtime tools like Level II and the tape, as opposed to surfing themarket, trading everything that makes the news.A simple rule to remember and practice and one that I subscribe to is Day trade the ranges and swing trade the trends.This is a good rule because when stocks break ranges, they formtrends, which tend to create new ranges that last for longer periods of time. Trading ranges tends to be more honest in the sensethat it statistically pays you to trust resistance and supportwithin trading ranges and therefore to day trade the range overthe time horizon you select, assuming it is intra-day. But once astock breaks the range and sets out on a new trend, it pays tohave more risk tolerance with these trades and ride the wave.The offsetting practice of lowering share size when trend tradingfor longer time horizons is very important.Because charts and patterns are the foundation to so manytraders’ strategy to the market, another rule that must be adoptedif technical analysis is to be utilized is Always use indicators toconfirm charts and patterns. An indicator is a mathematicallydriven tool that adds much more objectivity to a chart formation.Charts use pictures of the past to attempt to predict the future.While charts have merit, they represent only one leg of the stool.To use them alone without confirming indicators could make foran uncomfortable throne. Too many self-proclaimed gurus like torely on the complexities of chart-reading, because they are literaland can fill page after page in explanation. The problem is thatthis level of focus on chart-reading draws too much attention tolooking for explicable market activity at the expense of instinctsthat can only be developed by trading. That said, many indica-
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tors exist that you can employ to complement a technicalapproach. Moving averages are one such indicator that most alltechnicians agree must be utilized while trading. Some wouldsay moving averages are lagging indications of price movementand, therefore, not very helpful; others see it differently. A moving average (simple) measures average prices or volume over certain time horizons. In that sense, it is lagging, but when stockstrade above their moving average, there must be a reason forthem to do so. Good stocks trade higher with good reason andpoor stocks trade lower for good reason, and it is called, onceagain, supply and demand. When a stock begins to break aboveits moving average, it definitely feeds me more positive sentiment than negative. I then look for other subscriptions to confirmmy bias, such as a Level II where I can see who is buying andselling. I will then follow the ax and see if that market maker orspecialist tips his or her hand to me to help me further confirmmy bias or refute it. Many traditional technicians would arguethat when using a moving average, it is best to buy at or near themoving average price, but I completely disagree, especially inregard to technology stocks that are often trending. When techstocks rally and trade above their moving average, I like to lookat three to four periods of time to measure it against, but, in theend, I tend to trust trades more that are above a moving averageas opposed to trades that are at or below. Moving averages comein many forms, and when they are combined, they can form goodtrend following indicators.I would suggest paying attention to the simple and exponential moving averages in particular. They are the most followed moving averages, and in the momentum-driven marketthat we are in, I believe they are the most predictive. While manyother averages are more complex, remember the principle thatsupports TA. The psychological patterns of those who subscribeto this belief are fairly predictable. Some traders will fade thesepatterns on the belief that the masses will rush in at key levels asidentified on the charts, and others will trade with the pattern. Ihave come to the belief that day trading the patterns on a shortterm basis makes sense, as long as risk is mitigated by not stayingin trades too long. I like to fade these same patterns from a swingtrade perspective as the pattern becomes more known, on thebelief that the pattern will lead to saturation points of the trend,
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which will lead to reversal. The simple and exponential movingaverages are in my opinion the best “timing” indicators to use.Always know that the shorter term the moving average is measuring, the more sensitive—hence why day traders trade directlywith the trends that moving averages reveal and why swingtraders look for reversal patterns as moving averages begin toshow signs of strength or weakness. The exponential movingaverage gains more value over time, since this MA automaticallybecomes more “smoothed” over time due to its less-sensitivenature, as well as the way it is calculated. Exponential movingaverages are weighted moving averages, but they are based on aseries of simple moving averages. A good approach to understanding these indicators is to first understand the mathematicsbehind them. Suggested reading for this would include the Technical Analysis of Stock Trends by Robert D. Edwards and JohnMagee. Originally published in 1948, I believe this book is stillone of the most complete explanations of technical analysis.Other popular tools used by technicians would includeoscillators, which are mathematical methods that measuremomentum and rate of change. When measuring rate of change,oscillators are your best bet from a technical perspective. Thetheory is that as market participants react to news and events,they act on emotional impulses that can cause a rapid change inmarket condition in a given stock. As the saying goes, “hastemakes waste,” and that is my feeling on violent reactive movescaused by hype and overreaction that are often associated withnews. Although this indicator is a very valuable tool to supplement your trading style, I would suggest avoiding it as a singledecision support tool since on its own it tends to be a short-livedindicator.The most popular and well-followed oscillator would be themoving average convergence divergence (MACD). MACD is composed of three moving averages (exponential), which are shownon a horizontal chart indicating where equilibrium exists for themoving averages. Simply put, when the moving average is atequilibrium, the indication is muted and of little or no value.When the indication is below the equilibrium line, the signal isbearish, and when above, bullish. The theory is simple. As ashorter-term exponential moving average (EMA) is in control,hence pulling up the average, the indication shows that short-
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term strength is pulling up the average and is, therefore, a goodindication of short-term upside bias. If the short-term EMA islagging behind the longer-term EMA, it is pulling the averagedown, and therefore it is bearish. I prefer to read the tape andLevel II to look for price levels and patterns that support the indication, as opposed to using oscillators as the sole reason for making a trade. Additionally, I feel the best way to measure marketstrength on a short-term basis is to put some bait in the water inthe way of trading. You can tell from the way in which yourorders are executed how passionate the contra is that is buyingfrom you when you are selling and vice versa. As a day trader, Ifeel that this is a better indication of the strength or weakness ofa stock when measured from a very short-term perspective.A final word on indicators like moving averages and oscillators: Always remember, in the final analysis, stocks eithermove up or down based on supply and demand imbalances.Therefore, when a trading range compresses between supportand resistance, it indicates a thickening stock in terms of liquidity, as well as stability in stock prices and its moving average. Inthe most simple form, this just means that buyers and sellers aregetting evenly matched with no real dominant force. As thesevarious signs all show “compression,” it is good to think of theseindicators as springs. As these springs compress, pressurebuilds, and when this pressure is released by the emergence of adominant force (supply/demand), it tends to release with greatforce represented as large relative movement in stock prices.Therefore, it is the compression points where opportunity andrisk are greatest.
HARD AND SOFT DATAWhile many other confirming indicators exist, one cannot forgetthat feel, intuition, and the pulse of a stock cannot be ignored.Technicians rely heavily on “hard data” to formulate ideas, but asI stated throughout the book thus far, “soft data” play an evenmore important part as mechanical understanding grows. The besttraders I know all seem to settle on this point, which I believe is arule: Never replace instincts with technical analysis. The hardlesson to learn here is that instincts cannot be taught. Just as in
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sports, you’ve got to “get in there,” as a fellow trader I know likesto say. And he is 100 percent right. Now when taking the otherside of this argument, hard data like Japanese candlesticks seem toreveal all kinds of clues. For instance, the body of the candle indicates the open and close of a stock within a given period, while thecolor of the body tells if the stock was up or down within the measured period in terms of the opening and closing price. Then comethe “wicks” on the candle, representing the high and low of thestock within the measured period. This all seems fascinating, andthe lessons could go on and on, but the point to be made here isthat just because stock price activity can be graphically illustrateddoes not mean it can have predictive powers on its own. The feelone develops while trading and monitoring a stock as it opens andcloses within a time period or makes highs and lows within thatperiod cannot be substituted by any technical tool. The psychology behind this information is what really matters, and that is whytraders still pay for a seat on major exchanges. They witness reaction, psychology, body language, momentum, and the like on thefloor reading more about the supply and demand equation thanwhat an object on a computer screen can tell them alone likecandlesticks. While I am not minimizing the value of tools likecandlesticks, I am making the point that they are still minor contributors in comparison to the instincts you will develop by mastering trade entry and exit strategies when used in conjunctionwith the tape, Level II, sector/indicie strength (weakness), andoverall market trend within in a given day. To sum up this point, Idon’t think you or I will predict tomorrow’s market movers, but Iknow we can give ourselves a statistical advantage by readingtoday’s momentum stocks through the eyes of experience, monitoring the indications stated. Therefore, never replace instinctswith technical analysis.To illustrate this rule, I can’t help thinking of a trade I madebased on a phone call from my partner, Jack. Jack is not a daytrader, although he has been in the market for many years. Hecalled me one day and said, “Did you see BGEN sell off today?” Ireplied, “Yeah, it seemed pretty severe.” Jack said with a certaintone in his voice, “It was!” I know Jack has traded and held BGENfor many years as well as other biotechs, and he knows the biotechsector very well. I felt through my own intuition about the wayJack expressed himself about the selloff that he felt the stockwas oversold. Although he never gave me a tip, nor would I have
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accepted one, I read through his voice his strong sentiment for thestock to the long side (that provided the soft data to look closer).The next logical thing to do was to pull up a few charts with varying time perspectives and compare the chart formations alongwith some important simple moving averages that I still subscribeto. After the charts suggested there was good support for the stock,I then watched BGEN trade during the open the next day on LevelII and noticed that CS First Boston (FBCO) had a strong appetitefor the stock by buying heavily on the bid and selling in a veryshallow way when on the offer. Finally, the biotech index as wellas the NASDAQ composite and futures seemed to be coming off asupport level as well, and since I knew that BGEN was part of theNASDAQ 100 and a strong leader in the biotech sector, I boughtthe stock aggressively. I knew the stock was well correlated to theindices I just mentioned, and there were several strong indicationsto buy BGEN. These indications formed an alignment where allindicators (objective and subjective feel) showed me a lowrisk–high-probability trade. Over the course of that day, I boughtBGEN on every pullback. The stock was up for the day over 61⁄2,and I had three or four opportunities to buy it as it came in a bit onlight volume at “higher lows” for the day. I held a position goinginto the close, and I covered 2⁄3 of my position near the close. I carried the remaining shares overnight because I liked the way thestock was acting. The next day BGEN gapped to the upside, and Isold in the premarket to close the position. This trade illustrateshow soft data and feel can lead to trading ideas, but why it is alsoimportant to balance the idea with technical analysis and othertools that exist today (hard data) to formulate an overall opinion.Many traders today subscribe to just one discipline and theory ofhow to trade, but that methodology is much too narrowly focusedand one dimensional for an experienced profitable trader. In thissense, like most endeavors, trading is not completely black andwhite. It takes the maturation of ideas, technical objective data,feel, discipline, and the ability to act to complete the list of attributes a trader needs.
VOLUMEThe final indicator I will cover is the best in my opinion: volume.Volume measures market participation, sentiment, momentum,
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and the passion of bulls and bears.Therefore, volume is thoughtof as a lagging indicator, but for active trading, volume is also thebest indication of impending market activity as well. Volume isan indication of what is happening and what is about to happen,and therefore a critical rule: Never ignore volume regardless ofyour trading style.So many traders seem to be looking for the magic that willlead them to success in the market—that elusive crutch to leanon to support the weak legs of confidence that many new participants have. Technical indicators, because they are tangible,seem to receive disproportionate praise and are given more valuethan they deserve, causing participants to ignore the obvioussigns of market activity, such as volume.Day traders like to read volume right off the Level II and theTime & Sales screens. Perhaps this sounds too simple to be aneffective market analysis tool, but when the activity on thesetools is fast and furious, volume is increasing and indicatingactivity. Once that is known, all that is left to determine is thedirectional bias of the issue being traded. It is that simple. Theother technical tools that are invented and implemented areoften made overly complicated with the belief that the morecomplicated the formula is, the more value it has. I have studiedand traded using most of these indicators, and I have made themistake of having an overweighed bias toward these indicators.In the end I have come away with the belief that making the market more complicated than it needs to be is a mistake. Therefore,I will highlight a few volume indicators that I believe offer thebest balance of level-headed practicality and technical analysisthat leads to impending price change. I have formed these opinions based on actual trading experience, putting capital at risk inthe market based on the reliance of these tools and techniques,and I have come to this opinion that is also a critical rule: Don’tmake it rocket science, ’cause it ain’t. Keep a level head, andnever ignore good old-fashioned common sense. Metaphoricallyspeaking, when signs of precipitation are present, you don’t needDoppler radar or a “sling sychrometer” to know it. After all, whatdo you think traders on the floor are keying in on? Why are theythere? The answers and the solutions to these questions are allrelated to volume. Traders key in on, monitor, and participate onthe floor activity to recognize imbalances in supply and demandto speculate on the directional bias of the market. The act of mon-
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itoring what traders buy and sell in real time on the floor is howthey read volume. You don’t see many floor traders walkingaround with a laptop computer running complicated mathematical models to know that others are trading actively in a givenissue or security. Although technology has made its way to thefloor, most of what that technology is used for is to receive andexecute orders, not to make trading decisions or read direction.That said, let’s focus on a few technical indicators that can mimicthe psychology of the market that floor traders read throughhuman interaction.
High-Volume PullbacksWhen volume is strong during a pullback relative to a given measured time horizon, what you are seeing is actually the action ofsellers in comparison to buyers. Sellers in this scenario are simply more motivated to sell, whether opening shorts or liquidating longs, than buyers are motivated to buy, whether openinglongs or covering shorts. This is simply a supply side imbalanceover demand measured through increasing volume. Many technical tools exist to measure these increases in volume, such asaccumulation/distribution (A/D) and moving average on volume. Both are available on EDAT systems and are easy to use, butagain, it is not within the scope of this book to teach the mechanical application of these studies. However, I can highlight what itis that you are reading through the study and explain what to follow and what to dismiss. The moral here is to pay attention tohigh-volume pullbacks and expect the pullback to initially follow through. To open a long position during this scenario is ahigh-risk–low-probability trade and a mistake. Instead, waitingfor selling pressure to subside with lighter volume would be theintelligent decision before even considering going long.
High-Volume RalliesThe same logic stated above holds an inverse relationship interms of price movement with this scenario. Buyers are moremotivated to own stock and securities than sellers are motivatedto sell. This indication suggests that the rally is likely to continue
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and offers a good risk-reward scenario for long trades. Think ofthis as a breakout over a previous resistance level. Conversely, ifvolume shows no clear increase within the time horizon beingmeasured, the likely result is that the stock being measured willnot break out and instead will return within the accumulationrange. Therefore, in the absence of breakout volume at resistancelevels, a short play is statistically stronger. I define breakout volume when average volume is 15 percent greater than the previousaverage within the time frame it is measured against. Withoutbreakout volume, I have a greater bias that the rally will stall andreturn to the trading range prior to the rally. If the volume is trulystronger, I have a greater bias toward a breakout and expect therally to follow through. I use 15 percent based on my own experience. I know that many old-school technicians would look for ahigher percentage, but in today’s new economy, the beta on stocksin the technology sector is much higher. Beta measures the sensitivity of a stock in terms of its propensity to move in either direction, by comparison to the overall market. For example, if a stockhad a high beta such as 1.8, that would suggest that the stockwould change bullish or bearish with little prompting, whetherthat prompting were economic news, industry news, or especially stock-specific news. Technology stocks generally havemuch higher betas than traditional thick large cap stocks. Thesesensitive stocks have a “hair trigger”; just breathe on the trigger(volume) and it “fires,” and the prices change in response. The 15percent increase in volume is a very sensitive trigger and therefore indicates an impending price change. Thick large cap stocksneed to trade very heavy volume at each price level before theymove. Volume increases have varying effects on stocks dependingon the nature of the issue; therefore, do not try to apply a literalpercentage increase in volume to all stocks.
Low-Volume PullbacksBy now, you should be able to anticipate where this scenarioleads. When a stock “comes in” or pulls back on lighter volume,generally it has begun to find support. Stocks will often come ina bit after a strong rally on high volume and take a small breatherbefore restarting an up trend. This breather is the low-volume
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pullback and is considered a buying opportunity. Refer to Figure8.1. As you can see, buying pullbacks along an up-trending lineis a good strategy for day traders and swing traders alike.Remember that the trend line is relative to the time horizon beingmeasured. The success percentages change from stock to stock,but buying low-volume pullbacks is a high-percentage trade.Always remember, these concepts are guidelines, not literalinterpretations. Traders who trade literally without confirmationthrough indicators are making costly mistakes.
Low-Volume RalliesYou may be aware of the technical analysis concept of waitingfor the pullback before opening a trade that is breaking out ordown based on technical chart formations. The concept is supported because when shorting stock during a low-volume rally,the idea is to wait for a stock to break down through support andthen to wait for the issue to reverse temporarily on a low-volumerally. This creates a resistance level where support used to be
FIGURE 8.1 Low-volume pullbacks
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(remember how support became resistance during breakdowns).This resistance level is formed above your short entry pointbecause most traders believe that you should not short the firstrally or pull back after a breakdown because you want to test if infact the price level below the support is in fact a real breakdown.Waiting for a low-volume stock to rally after the perceived breakdown makes sense to confirm a new resistance level is put inplace above where you will short the stock. This means you willnot sell the perfect top of the breakdown; but the gain to be hadby waiting and confirming that the breakdown is real far outweighs the few price ticks above where the first short wouldhave been opened, assuming the breakdown is real. After thefirst rally following a stock trading below support, you want tolook for the next lower-volume rally, indicating that there is noreal passion of buyers. This second rally is a great signal to opena short position or exit a long. Waiting for confirmation that atrue breakdown is present limits risk dramatically.
Relative VolumeThe final word on volume is that what you measure volumeagainst is what creates a relative indication of increasing anddecreasing levels. I think of this relational value the way an arbitrageur will look at the futures market in comparison to the equities market. It is not only where the price levels are that impactsthe futures and equities market but also where they have comefrom. If the S&P 500 futures contract is down −13 at midday butcoming off of its lows for the day, the relative indication canshow strength as opposed to the obvious weakness as read onedimensionally from the net change.Volume should be read very much in the same way. Howstrong or weak is volume relative to where the stock you are trading has been within the time horizon being measured? Considerearnings, for example. While events like earnings usually bringincreased activity to an issue, that increase does not mean thatvolume will help you pick the overall trend of that security. Thisis an example of how temporary increased volume can send afalse signal, jading the more important volume averages thathave been created over longer periods of time. For this reason, I
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choose to rely on technical indicators for measuring volume (andprice action for that matter) over longer, broader-based timeframes rather than shorter-term time frames such as day trading.The reliability of technical information is much greater with abroader perspective. Conversely, while day trading, I read volume through the tape and where volume is relative for the day.For example, if CMGI has traded 8 million shares after threehours into the session and the volume is low compared to itsaverage volume for the last five days (assuming the absence ofnews), I factor this in and don’t need technical indicators toknow that. On the other hand, if I am studying stock trends overlonger periods, such as weeks, I will rely more on technical toolslike charts, moving averages, and A/D.So much more can be said about technical analysis; in fact,this field of study is almost endless. I believe the rules stated inthis chapter should give you a fair perspective on how to usetechnical analysis with the right balance of other tools. Therefore, my final rule on the subject is Stay grounded. Multidimensional trading requires a field of view that allows for otherpossibilities and tools that will help confirm and defeat ideasyou have. Trading with a narrow focus of any one style is notadvised, and the best traders I have ever met have a multidimensional approach. The funny thing is that most don’t think ofthemselves that way. They do what they do subconsciouslybased on years of experience. In that sense, many great tradershave become competent by doing the right things without toomuch analysis. In that sense, I believe “ignorance is bliss,” andbeing consciously competent is unnecessary. Results are whatmatter, and when you can let the market tell you what to do asopposed to your inflicting your beliefs and attitudes onto themarket, your trading will take on a new level of positive performance. The caution I use is similar to the advice I gave my sonZachary when he received his first toy hammer. Don’t be so anxious to use your new toy that everything in the house begins tolook like a nail! Take that same perspective while gaining technical skills as a trader. Don’t be so anxious to make a trade basedon some chart formation or indicator you learned about, thatevery chart starts to show you patterns that you are anxious tofind. The market will show you the way if you maintain an objective, logical, and commonsense view of it. If you cross the line
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that many technicians do where they see the market as somemystical aberration of nature, you need to put away your spyglass and reevaluate. The best way I have found to snap yourselfback into reality is to take a good look at your trading activity andP&L. Most who find themselves in this place trade far less thanthey should and have many more opinions of the market thanresults. To me, that is the telltale sign of the unbalanced markettechnician.
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nfortunately, for most, by the time a trader realizes that itis important to evaluate results, he or she is generally in astate of confusion or dismay. In most cases, the challenges that trading produces yield a confused outlook since thisis the very reason that the trader is evaluating performance in thefirst place. When traders are making money, most will not takesteps to evaluate how the results were achieved. As I stated inChapter 2, they are in the unconscious competent stage of development. Unfortunately, this stage is most often temporary, and inorder to progress to a stage where continuous growth is possible,the trader must learn how results are achieved. This can only belearned through two things: trading and evaluation of personaltrading patterns. The evaluation process I am referring to is notas much about profit and loss as it is about the psychologicalevaluations that all traders need to go through to move forward.Think of this step as a checkpoint on the journey of trading. Mosttraders do not want to stop at this checkpoint, but those who dobecause they realize the importance of it are already much further ahead than those who do not.We have all known people who have experienced early success at something, only to gain a cocky attitude in the process.Ultimately, that type of overconfidence can lead to very unpleasant results. The rules I cover in this chapter are geared towardthe other group of people, those who believe these checkpointsare necessary—those who have learned to check their egos at thedoor before entering the trading arena—that is, those whobelieve that continuing education is imperative and can admitwithout hesitation, “I don’t know something.” These are theattributes of winners in this game of speculation, and, I wouldargue, most everything else in life as well.The self-evaluation stage is generally reached at the mostcritical stage of one’s trading career. While trade evaluation
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should begin immediately, self-discovery of this critical processis usually manifested through dismay. It is a stage where questions like the following will be raised:• “Is trading really for me?”• “Is profitable day trading possible?”• “How much longer can I survive?”This is the self-doubt stage, the very point when most willquit. Some, when they reach this point, will place blame onimpersonal factors such as high commissions, bad technology, orpoor market conditions. This is the stage that every trader mustpass through. In Chapter 1, I spoke extensively about the need ofa trader for a mentor, that is, a trusted advisor who can encourage and teach at the time of greatest need. The time when one isfaced with the process of evaluation is that time.While you should be evaluating your performance on adaily basis through your journal cited in Chapter 1, taking abroader view of your trading patterns will reveal other characteristics of your trading style that cannot be seen on a microscopic,day-to-day basis. A broader review will convey psychologicalpatterns in trading that can reveal how well one handles emotional issues. While emotions are not friends to traders, they arenot going to be completely eliminated, especially when tradersare just beginning. How one deals with loss, failure, and successare areas that should be explored. Going through a process thathelps address emotions is certainly not baseline mechanical education that most will employ when beginning to trade, but forthose that take this aspect of trading also very seriously, the benefit is easily seen. As a form of baseline evaluation for novice andexperienced traders alike, the quiz that follows is a great beginning toward the first rule of trade analysis: Know thyself.
THE TRADERS’ QUIZA strong start with or without a mentor or trading coach is to askyourself some questions that relate to your personality. Although
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this self-evaluation does not extend to trading results, it doesbegin to reveal whether you have the attributes and mental control to trade in the first place. Being proactive and responsible byperforming such an evaluation before engaging the market sayssomething about you already—that you have some of the qualities I believe you need for consistent profitable trading.As a day trader, your job is to take money from others whowill not only strenuously resist your best efforts but will likelybe better funded and more experienced and will have the samemotives you have, to take money from you. When your hardearned capital is at risk, emotions like fear, anxiety, stress, andapprehension can run wild. The way you handle risk, emotions,and the inevitable losses you will incur is as much about tradingas the stocks you trade. Your electronic equipment and financialresources are a given and probably on a par with that of mostother day traders. What will set you apart is your psychologicalmakeup—that is, your self-confidence, your ability to exercisegrace and cool thinking under fire, the way you deal with setbacks, and the steadfastness of your determination to