{"id":8804,"date":"2018-03-09T07:30:38","date_gmt":"2018-03-09T12:30:38","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=8804"},"modified":"2018-03-09T07:30:38","modified_gmt":"2018-03-09T12:30:38","slug":"keeping-the-edge-sharp-2","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/keeping-the-edge-sharp-2\/","title":{"rendered":"Keeping the \u201cEdge\u201d Sharp"},"content":{"rendered":"

Editor\u2019s note: <\/strong>This past week, we received a ton of letters from subscribers of the Market Minute<\/em> and Delta Report<\/em>. And while we love to receive positive feedback, the negative is always a valuable educational tool.<\/p>\n

Today, to honor our \u201cMailbag Friday,\u201d we\u2019re sharing a few of Jeff\u2019s best mailbag responses from last year. Read on to learn why your feedback is so important to what we do in the Delta Report<\/em>\u2026 and how a retired trader stays on his toes\u2026<\/p>\n

\n

Happy Friday.<\/p>\n

As most readers know by now, I\u2019m not a big fan of taking new trading positions right in front of the weekend. So, rather than talk about the market, let\u2019s open up the mailbag and see if there\u2019s something educational inside\u2026<\/p>\n

Here\u2019s a nice note from a current subscriber\u2026<\/p>\n

I just wanted to give you a quick shout out, and say thanks! Great job on the TWTR, AG, and URBN recommendations. I have learned so much from you over the past couple of years, and always look forward to reading your commentary every morning and throughout the day. I am very excited and looking forward to the roll out of your trading earnings algorithm, it sounds very interesting!<\/p>\n

\u2013 Ryan<\/strong><\/p>\n<\/blockquote>\n

Gosh, thanks for the nice comment Ryan. I\u2019m glad to hear you\u2019ve profited off of my advice over the past couple of years.<\/p>\n

But I have to tell you, I\u2019m really excited to unveil my earnings trading system next week. I\u2019ve created a lot of good systems over my 30-plus years in the market. But this one is my most exciting breakthrough.<\/p>\n

I don\u2019t want to oversell it. All trading systems have flaws. And this one isn\u2019t perfect. But it\u2019s the best way I\u2019ve found to trade stocks around their earnings announcements.<\/p>\n

I\u2019ve had some amazing results trading the system with my own money over the past year. And we\u2019ve done pretty well with the earnings trades I\u2019ve recommended to subscribers over the past month.<\/p>\n

We should have a lot of great opportunities to trade over the next several weeks.<\/p>\n

We are huge fans. Jeff’s \u201cscalps\u201d in previous years helped us retire.\u00a0GES was truly a reason to wake up each morning early and check his opinions prior to market open! Jeff, you have appreciative fans in Sonoma’s Wine Country\u2026<\/p>\n

\u2013 Henry<\/strong><\/p>\n<\/blockquote>\n

Thanks for the nice comment, Henry. I\u2019m glad, and humbled, that you have profited from my advice. I\u2019ll be offering my market commentary to subscribers for many years to come. With a little luck, we\u2019ll have lots of profitable years (and lots of good wine weather for Sonoma County).<\/p>\n

But here\u2019s a subscriber who\u2019s not quite as enamored with my research as you are\u2026<\/p>\n

Well, there’s a reason you got dropped from your previous publisher. Anybody who did all your trades in your last newsletter lost a ton of money. The truth is that nobody knows what the market will do next. A market that is way down can go down further. A market that is way up can keep going up. If you sell puts most will expire worthless \u2013 and the few that don’t will causes losses that wipe out all your gains. If you buy options most will lose money, and will wipe out the gains on the few that double or quadruple in price.<\/p>\n

The truth is that options are priced pretty fairly, so the only people who consistently make money are the option market makers hedging away all the delta and eking out steady gains on the bid\/ask spread. If you were one of the very few traders who could consistently make money on options, that is what you would do \u2014 instead of making money by selling a newsletter.<\/p>\n

\u2013 Bob<\/strong><\/p>\n<\/blockquote>\n

I\u2019ve always argued to my customer service representatives that, while I love getting positive feedback \u2013 because it\u2019s motivational and inspires me to work even harder for the benefit of my subscribers \u2013 the negative feedback provides a greater opportunity to educate readers.<\/p>\n

This is a terrific example\u2026<\/p>\n

Bob, I\u2019m sad you had such a poor experience following my advice. I\u2019m not sure where the problem is, though. In my 12-plus years writing for my previous publisher, I had a couple of bad years. But I had FAR MORE good years.<\/p>\n

For example, in 2015, my \u201cofficial\u201d recommendations produced a modest 7% annualized return. But the scalp trades I recommended in my blog earned more than 253% annualized.<\/p>\n

In my first newsletter for 2016, I told subscribers that if you didn\u2019t make money with me in 2015, then you will never make money on my advice.<\/p>\n

Sometimes, that\u2019s just how it goes. My trading style is not the right fit for everyone. I\u2019m conservative. I take small risks on a lot of trades. And I count on being right more often than not.<\/p>\n

That certainly played out in 2016 when my recommendations in my weekly letter earned more than 118% annualized, and my scalp trades generated 175% annualized returns.<\/p>\n

You are right that no one knows where the market is headed. But by looking at past situations, where similar conditions existed, we can gain an edge. And when you\u2019re trading the short-term direction of the market, the difference between a profit and a loss usually comes down to the \u201cedge.\u201d<\/p>\n

My trading style is probably not the right one for you. If you haven\u2019t made money with me over the past two years, then I can\u2019t possibly imagine an environment where you will profit off of my advice.<\/p>\n

Though, plenty of folks have. And you thought well enough of my commentary to follow me over to my new publisher.<\/p>\n

Here\u2019s the thing that really gets me\u2026<\/p>\n

You said that if I was really that good at what I do, then I would just trade for a living rather than sell a newsletter.<\/p>\n

Bob, I have to tell you, I make FAR MORE money trading every year than I will EVER make in the newsletter business.<\/p>\n

When I closed my brokerage firm on September 30, 2007 \u2013 which should earn the \u201cmarket timer of the century\u201d award \u2013 I didn\u2019t want to fall into the trap that so many other previously successful traders fell into. They left the trading business, retired, and figured they\u2019d spend the rest of their days trading their own money.<\/p>\n

But they discounted the value of \u201caccountability.\u201d<\/p>\n

When they were trading other people\u2019s money, they performed rigorous research. They had to explain the rationale behind their trades. And they were held accountable for their mistakes.<\/p>\n

When these traders retired, accountability went out the window. And so did their success.<\/p>\n

Instead of rigorously following the markets, these traders would put on their positions and then spend the rest of the day on the golf course, or in restaurants, or in bars. It was just their own money, after all. They weren\u2019t handling other folks\u2019 funds anymore. They figured that if they took a loss on a trade, they could easily make it back up.<\/p>\n

You can guess what happened to most of these traders.<\/p>\n

They lost the edge that made them successful traders. They stopped doing the research, performing the work, and sticking to the discipline that made them consistently profitable. And they ended up blowing up their accounts. I didn\u2019t want to do that.<\/p>\n

So, when I retired from running my own brokerage firm in 2007, I focused my energy on my newsletter business.<\/p>\n

I\u2019m accountable for every trade I recommend. It doesn\u2019t matter if it\u2019s a recommendation with a complete write-up or a quick \u201cscalp\u201d trade. I know subscribers are putting their hard-earned money behind my advice. And I take that responsibility VERY seriously.<\/p>\n

It\u2019s that seriousness that forces me to delve into the details of the trade, and to perform the rigorous research that I used to provide to the clients of my brokerage firm. And it\u2019s that sort of research that helps me maintain my \u201cedge\u201d in my own trading account.<\/p>\n

This isn\u2019t a selfless endeavor.<\/p>\n

Yes, I hope folks can profit off of my advice. And I want to share my best trading ideas with as many people as possible. But if you want to boil it down to the lowest common denominator\u2026<\/p>\n

The reason I write a trading newsletter is because it keeps me sharp. It keeps me accountable to the value of my research. And it helps me maintain my edge as a trader.<\/p>\n

I always give my best ideas to readers. But I still make a lot of money trading stocks and options. Much of that success is spun off from the discipline I have to instill by recommending trades to subscribers. I work as hard as I possibly can to make sure you can profit off of my advice.<\/p>\n

It doesn\u2019t always work out that way.<\/p>\n

But if I thought for one moment that my trading ideas were causing more harm than good, then I\u2019d gladly retire and spend the rest of my days lying on a hammock. I\u2019ve made far more money than I \u2013 or more importantly, my wife \u2013 can ever spend.<\/p>\n

For me, trading is a passion. I look forward to every day I have a chance to profit in the stock market. And I want to share that passion with as many people as possible because it makes me a better trader.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

How do you stay sharp as you trade each day? Let us know your thoughts \u2013 along with any other questions, comments, or stories \u2013 right here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here\u2019s how a retired trader stays on his toes.<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-8804","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/8804","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=8804"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/8804\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=8804"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=8804"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=8804"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=8804"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=8804"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=8804"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=8804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}