Dear Jeff

Hi Jeff,

I’ve been an intermittent blogger these last few months and wanted to apologize for that. However, I’m really writing to thank you for your encouragement and leadership over the last year. I’m coming up on an anniversary and I wanted to assess what I’ve learned this past year.

I realize that I was really lucky to get you as a coach back in the old days when INVESTools had one on one coaching, but I realize now, that while your personality was a perfect match, your trading style wasn’t. I know I heard you say over and over again, that I needed to figure out what my own style was, but as a new student I figured that all I needed was a set of rules that I could follow and I’d be all set… Your rules made you money, so why not follow those? I knew early on that what attracted me most to “trading” was that I could do it with only looking at the charts. I knew that I could learn technical analysis and master it. And I did.

I became an expert technician early on; impressing everyone I spoke to (on the hotline) with my assessments of the technical aspects of the charts. It was fun for me to be asked by Alan (at the Vegas event) to tell him what I saw on the chart for oil futures to test my ability and to challenge your instruction of me… It was only for fun, but he was impressed, and I left Las Vegas, knowing that I knew I could read a chart. Thanks for that.

However, I still had to learn what my own style was. I could find a pattern, I could recognize a bounce and a breakout, but I was only losing money. Later that year in July, I remember phoning you and finally confessing that I had lost nearly 40% of my account after having had such great success up until May. And I remember telling you that I never doubted my ability to make it back, and neither did you. (Thanks for that too.) By the end of the year, I had stopped the bleeding, but I never actually made back any of that loss. I was just too scared to trade. I started trading futures instead. I figured that if options weren’t for me, then maybe futures would be “it”.

It’s taken until May to identify what I was doing wrong with my trading. It was never my technical abilities, but instead, it was the fact that I was still trying to trade your system. And frankly, I understand now, that I couldn’t bare the constant losing. So, I’d hold on longer, and lose more instead. I was soooo good at technical analysis, how could I possibly be so bad at trading what I was seeing?

Well, it was just the style of trading. Once I switched from OTM options to ITM options with a little more time, my trading completely turned around. I’m not really as much of a swing trader as I thought I was. I’m actually an intermediate-term trader. I’m currently holding long calls on stocks with expiry in Aug, Nov, and Jan ’08. The trades I’m in that expire in August were purchased in March! Gasp!

And guess what? I imagine that you respect me more for finding my own way instead of just trying to figure out your way. I have never had returns as high as I’m having now. I was always looking to hit it out of the ballpark in a few days or a couple of weeks (just like you). I thought that a 70% return in 7 days was what trading was about… I’d seen you do it… I’m no dummy. I thought I could do it too. Instead I was losing that amount in 3 days! I simply couldn’t get it right.

These days, on average, my returns are about 100%. Funny how that works, huh? I’m not even trying. I’m simply following my rules, watching for support and resistance, and getting out when I’m wrong. So really the only difference between your “trading” and mine, is OTM vs. ITM and Long expiry vs. next month or sooner. I’ve also started to really allow my winners to run… Similar to what you did with BIDU… (congrats on that trade, btw). I had similar fortune with SLB. Got in when it was at 70. Got into DECK when it was at 75. I got in in April and had to exit my Junes, but I got into September calls in early June to “roll” that position… That entry was at about 95… It’s still a winner. I’M now a winner…

I think it’s really important that you continue to tell students that they need to discover “what works for THEM”. Despite my admiration for you as an instructor, mentor and leader in our trading community, your style was not good for me. I kept thinking that because we were alike, personality-wise, that I could trade like you… You NEVER said I should… you NEVER said, “My was is the only way to make money.” You ALWAYS said, that I needed to discover what MY trading style was. I was simply blinded by the money.

I imagined you were making on all the trades you showed us. I was blind to the fact that my constitution couldn’t handle the constant losses. And what’s even funnier about this was that I took to heart that I should learn to find my own trades, so I rarely followed you into something. I think in the past year I’ve taken 5 or maybe 6 of the trades you’ve suggested. I didn’t want fish, I wanted to learn to fish. I heard that loud and clear. But I completely ignored your pleas to find my own style too. But now I have. And NOW I’m successful.

Keep up the great work. Some of us actually do “get it.”


Recommendation: Lisa, thank you for the e-mail. A lot of traders need to hear these words. It is true that some styles are not appropriate for all traders, and critical that success is only found by selecting the most suitable style for you. There is a trading style out there for everyone, find it.

Long: Lisa

Short: Lisa. I'm not bearish, she just isn't as tall as me. :)

Lisa, I really got alot out of your email. Thank you so much for putting your thoughts down in words and thank you too, Jeff for sharing it with us. I would like to see more emails shared from this community about how they found their style and/or turned their trading around.

My style is more intermediate like yours, Lisa. For me I know I need to just pick a handful of stocks to work with and play them over and over, replacing only as needed. I get overwhelmed with so many choices. Your letter motivates me to do that. Thanks!


Hmmmm, don't understand the posting above this one... Hope Phott stays cool, though.

Lisa what a great letter! There is no doubt that we have all struggled to find our own trading styles. Even the masterful Brett has posted a few times about his long road to finding what works for him.

I, too, have struggled... thinking that Jeff's method had to be the only way to make money, because HE was making good money. I did a great job of ignoring the things that were meant to teach me (like his pleas to find our own trading style) and being certain that I knew myself better than anyone else so I didn't need to listen to the cautions... I'm a pilot, darn it all, and I thrive on adrenalin.

The first few months were great and then Feb 27 hit and POW!!! More adrenalin than I could stomach. I found out I had some severe learning to do. The good news is that our account is up 75% since that fateful day and I am a much, much wiser student.

Listen to what the people on this blog have to say. There's an unbelieveable wealth of talent here... much of it unheralded. Jeff is teaching us all to blossom into the flowers that we, as seedlings, all have the ability to become (some of us will just be prettier... and some of us will suffer being run over a few times... but we'll all blossom.)

Thanks Lisa and Jeff, for sharing.

Excellent letter and thank you Jeff for sharing it with us. Another learning opportunity for the blog. I am impressed every day with this blog and the people that frequent it.

Lisa and Jeff,

Thank you for sharing the letter! I too am finding my own strategy that works. I haven't posted for few a months. After being down in my account in a bullish market, I needed to step back and find the strategy that works for me. I read the blog throughout the day and learn from others who are posting. I am gradually finding my strategy and staying disciplined to my rules. I continue to make mistakes, but learn from them. The cost of that tuition is down greatly; my portfolio is up slightly. Best of all, I have a positive attitude and the determination to succeed. This is a great community to be a part of. Thanks to everyone!

I echo the words of praise from Patti.

Thanks Lisa for sharing your experience of finding your trading style and thanks (as usual) to Jeff for choosing to post such an insightful email that will benefit many.

Steve K.

Couldn’t agree more... I remember having very similar thoughts in the beginning, Lisa... When I first started "trying to be like Jeff" I was 15/15... 15 trades and 15 losses... :)

Like others here I have "found myself" and now I am on track and doing pretty well with trading the indices as well as currencies....

I haven’t posted in a while but when I read "Dear Jeff's" like this I feel the need to chime in..

Jeff - I still owe you that pic... Hopefully I will get it soon so I can send it your way...

thanks for sharing jeff and lisa. its always great to see success stories out there!

Thanks for sharing, it's very inspirational.
I'm in the "following other people's style and rule" phase. I'm not ashame to say because I think we all need to first imitate before we can really find ourselves otherwise we wouldn't know where to start.
I'll find my style and rules (hopefully soon and without too much loss) and then it'll be my turn to "Dear Jeff...."

Post a Comment

About me

  • I'm Option Addict
  • From Saratoga Springs, Utah, United States
  • I am a professional trader and an instructor for Investools. I've had relations with the markets for 9 years. Born in Concord, CA, but reside in Saratoga Springs, Utah. Father of THREE, Husband of one.
My profile

Prescriptions Here!

Other stuff

Blogarama - 
The Blog Directory
Directory of 
Finance/Business Blogs Finance 
blogs Top Blogs Finance Blogs - BlogCatalog Blog Directory