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The phone rang in the middle of the night. Not knowing if it was important I got up to answer it just as everyone else would. The voice at the other end was a familiar one.

"I believe that John Denver's biography is going to be the most important biography of this year. If not the most important surely one of the important."

"Art, I was just doing some thinking on John Denver's accident. He touched millions of lives as well as yours and mine. I can relate to that accident. " Phantom told me.

"You called me in the middle of the night to tell me this?" I asked.

Phantom explained, "I know how our traders can relate to John's accident too. Of course there are those people who he never touched or who didn't even know who he was."

"This is so important to me. Maybe it is more important to me than anyone. It is important because I always have had timing as my friend in my trading career."

"Traders will have to face in their trading career what John had to face in his last flight. I just don't ever want our traders to ever have to face that last flight in trading. I have to make them understand one very important point in their trading. Somewhere along their path they will face an unexpected event that can take them out of trading if they don't prepare for that eventuality in their trading."

Phantom continued to convince me but I already knew Phantom was expert at timing.

When you get a phone call at 2 a.m. in the morning you can almost know it must be from a friend. Why else would someone call at that hour and awaken you from deep sleep? As I answered the phone I could see this call from Phantom was not just to me but also to Phantom's trader friends.

"Art, I must ask you to address three aircraft accidents!" It's John's, the latest one in the article your brother sent you and the one I was in. I never could make anything out of the aircraft accident but it has to do with life and in trading too. It is important that we warn our traders of needing to be prepared for all possibilities. I have searched for some kind of answer from John's accident and my accident in the past. Not until I read the last accident of the Doctor who's aircraft landed itself after carbon monoxide poisoning in the cockpit did I realized the similarities to trading and how it is important."

Phantom continued, " It does have to do with trading Art! When you wrote about God's rules you never really understood fully why it was such a difficult time for me. I went through the same process in my aircraft accident as with John's. We survived and we had altitude to recover and to make a decision. John didn't have that altitude and couldn't make a decision. He had to take what was given. The Doctor wasn't even in the decision process because of his condition."

"Three accidents and they all had different results. The Doctor had no choice and when he lost consciousness because of the carbon monoxide in his aircraft, he still survived because he ran out of gas. John's had what appears to be fuel and a fuel value problem and he lost his life. Our engine failed and we had time to work the fuel tank valve and get the aircraft on the ground where we wanted because we had altitude. We were able to make a choice of where to land. John didn't have a choice. The Doctor's aircraft landed by itself and he survived. These three accidents are all the same accident with different circumstances."

"Can't you see what I am getting at Art? Trading has the same conditions"

I remembered seeing Phantom's post on "Futures" talk forum to Randy about the fuel valve over a month ago and had thought little about it until now. I began to see Phantom's thought on the three aircraft accidents. There are times when the market hasn't given you enough altitude to be able to recover. At other times you have enough altitude on your position to make a good landing choice when the market goes wrong. And there are times when you have no control on where you are going to land or how because it is out of your hands. Yes, it makes sense that Phantom would call at two in the morning.

Phantom never pulled rank on anyone and never considered himself better than anyone. He has always been a gentleman and perfect example of what you would expect of a hero. Why should I hesitate to let him impress his thoughts on his friends? He wishes to save as much grief of trading to his trader friends as he can. I can not question the unconventional thinking about the accidents and trading as my thinking is pretty unconventional at times too.

We shall convey the insight for you on the three aircraft accidents and allow you to question if you feel it appropriate.

Phantom rarely ever said anything about an aircraft accident in his life but it always bothered him. In John's accident he was presented with an aircraft accident not easily accepted. Now out of the blue sky an accident where there is no logical reason the pilot, a Doctor, could have survived but did. Phantom surely has gathered reasoning for all of this. He has been right in his useful insight on events over his trading career. Why not now too?

Events in life have a lot to do with trading. Could it be too that trading has a lot to do with survival in life? "Ok Phantom," I said. " We can start the chapter while it is most importantly on your mind at this early hour. Where would you want to start?"

Phantom indicated he would just tape his thoughts and let me take them and make out of them what seemed to be the message like we had on his insight in this project. I agreed and went back to bed.

You can know that Phantom didn't sleep that night and kept the midnight oil burning. I guess there is a time and place for all thought. We must let it flow and not restrict thought at those times. That point is another Phantom has taught me.

Phantom felt the three airplane accidents reflected clearly similar uncontrollable events in trading just as in the accidents. We'll see just how they compare.

The three accidents Phantom was talking about were John Denver's, a pilot who is a Doctor and Phantoms accident. The Doctor's aircraft landed in Missouri on it's own when running out of fuel while the Doctor was unconscious. The aircraft accident Phantom was involved in was at greater than 5000 feet altitude when the aircraft engine quit.

In John Denver's accident there were two pieces of information, which Phantom was disturbed about in the accident. Before the flight took place, John had borrowed a pair of vice grip pliers in order to turn the fuel selector valve. The fuel selector valve was not in the correct place below his right hand on the floor of the aircraft but over and above the left shoulder behind him. This required him to take his right hand from the flight stick in order to turn the valve, which was difficult to maneuver.

The most disturbing aspect of John's accident was that his problems occurred with less than 500 feet of altitude. Thought time in the emergency situation didn't exist, as actions had to be second nature. Since John had few hours in the aircraft, second nature reaction with such little time wouldn't have allowed recovery in time.

The Doctor's accident, which Phantom referred, happened as the pilot was overcome by carbon monoxide, which entered the aircraft because of a faulty exhaust system.

The aircraft was on autopilot when the Doctor lost consciousness from the CO (carbon monoxide.) He was flying to Topeka, Kansas from the west and instead of a 150 mile trip made over a 300 mile trip to the Moberly, Missouri area as the plane ran out of gas. Surprisingly it landed with the autopilot engaged and the pilot unconscious.

The Doctor walked away with only a broken arm. Had the fuel on board been enough to fly another half-hour the CO level in his blood would have been 50 parts per million rather than the 35-ppm. He would never have lived. Had the terrain been different the aircraft could have crashed instead of landing on its own.

The third aircraft incident occurred to Phantom and he never wanted to talk of it before. At about 5500 feet altitude the aircraft engine stopped. Phantom's explanation of the accident was that it required an immediate decision and that was where to land. The altitude gave comfort in allowing good amount of time for a good decision of where to land.

In two of the three accidents everyone survived. . The two aircraft made landings without loss of life. . While the two aircraft had control in landing, one pilot wasn't conscious but still survived. In the other airplane accident, the safest aircraft, John's lost his life. The loss of life was in the aircraft, which had the lowest altitude and least amount of time for reaction and corrective action.

All three were unexpected and all had different outcomes because of circumstances beyond control of what the pilot could do. It was these situations and different outcomes that Phantom wanted to discuss as it relates to trading.

Phantom never had any value of learning from the accident that he was in as he always wondered what reason or purpose it pointed him to in his life. He always felt other people's thinking of a person who is in an accident is that somehow they are to blame. As I see the way John was treated in the news media when he lost his life, I understand Phantom's view. Others do often look for blame rather than answers.

Phantom has always looked for an answer in his airplane accident. He has found some answers to uncontrollable events in life and in trading. To relate the three aircraft accidents to uncontrollable events in trading, Phantom gave me his explanation.

In our lives and in our trading lives we come upon a situation sooner or later where we have little or no control. We must at all times plan for that time. When a pilot learns to fly they are always practicing emergency landings. In trading we must practice those same landings.

Depending on the exact situation, we shall at times end up with entirely different results even though the situation may repeat itself again and again. We of course want the best result but there are times we don't control the result.

In your first situation as you take a trade, there is a time when it is just as if you took off from an airport and don't have a comfortable altitude. This is the time when the trade has not really been proved to be a correct position yet. At this time an unexpected event can have it's worst result in your trading. You have to take what you can get for a landing spot due to the lack of altitude.

The second situation is when a trade becomes a proven correct position. It is similar to being at a higher altitude in an aircraft. If an unexpected event takes place you have a more comfortable choice and can make a better decision due to the extra lead, which is also similar to picking out a better landing, spot. In this situation you are in control of keeping the trade from being a total disaster. You land in a clearing.

The third situation for a trader, which parallels the three aircraft accidents, is that you are on you way with comfortable altitude and are on autopilot. There are no problems with your position. All of a sudden your trade is taken out of your control. Several events can cause this. Consider some of them such as your phone line goes dead. You get delayed on your transportation and can't get communications to your broker. Your quote machine goes dead. A big report comes out and the market locks limit before you can even get an order into the pits. All of these are the same as losing consciousness due to CO in the cockpit as you fly to your destination. Nothing you can do will change the result as the result is going to deal you what it will.

The trades with the best altitude or lead allow you the best opportunity to recover from a bad or unexpected event. A lot of traders expect their trades to show this lead and do nothing when they don't show the lead that they need. They allow the market to take them out and prove that they are wrong. To be taken out by the market when proven wrong opens up much more disaster than many traders ever imagine.

At all times you must understand that the surprise and unexpected event will create a worse situation than you are prepared to face. You must practice your emergency landings. You can recover from good positions. You will not recover from bad positions in unexpected situations.

Just as the Doctor's airplane landed itself you will have times when you luck out. After all a broken arm is much better than a lost life. Traders are the in the only profession I know where they are happy when the market gives them back half of their loss. When you get back half of your loss you have just seen your airplane land itself on autopilot as it ran out of gas.

Phantom indicated that the most critical time of a trade is immediately when you have just entered the position. This is the time you must be most sensitive to news and events. How many traders are most comfortable upon entry because they know they are protected by stops? How many surprises are there in trading? How about the time the unemployment report was a surprise and your stop gave you the biggest slippage you ever thought was possible? Listen to Phantom! It happens.

Don't let an unproven position set you up for a downfall.

Phantom asked why is it so difficult for traders to understand that bad trades get worse? They get worse until the unexpected takes place. The unexpected is always your downfall in a bad position getting worse. Get a lead on your trades or throw them out.

Phantom wanted you to understand part of his distress in John's accident and death. He wants the best for you. Can you relate to the three accidents and your trading? Make out of it what you can. Phantom intended it as a way to ask his trader friends to be prepared for any possible event in your trading career.

" I believe that John Denver's biography is going to be the most important biography of this year. If not the most important surely one of the important."
---POP

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