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My name is Jens Clever. I had invested for years before I became interested in day trading stocks. The fascination of watching stock quotes in realtime quickly got me hooked to the market on an intra day basis.
I am in the trading business for over 9 years now and have been coaching people for over four years. I am also author of the ďMastertraderĒ day trading ebook which is an extremely valuable guide for everyone that is seriously interested in starting to trade. I am a licensed trainer of the German stock academy and I also work as a coach for various day trading brokers.
Customers have always been satisfied with my services. Very often I will receive calls from former clients thanking me for my help and the money they are now able to make. In fact some of them even like the service so much that they want to recommend it to other traders and serve as references.
If you feel you need to get in touch with some of them I can provide you the contact information.
I was recently interviewed by Innerworth as part of their "Master Interview" series and below you'll find the complete interview.
Innerworth focuses on the mental part of trading. Every week their psychologists put a top trader on the couch, and here's what I told them.
Jens Clever is a trading coach in New York City. He started his trading career at an early age, and has a passion for trading, but he isnít interested in solely making his income from winning trades. Heís also interested in teaching, writing, and gaining a more comprehensive understanding of trading. Jens attributes his success as a trader to his pursuit of these additional activities.
As you read this interview, you will find it interesting to learn how Jens balances trading with his other trading-related activities. You will see heís forthright, and was willing to share his limitations as well as his successes as a trader.
Jens has definitely found his own niche. You will learn about that when you read the interview. We think he has some important lessons to teach.
When did you start trading, and how did you get interested in it?
I started out doing long-term investing in 1992. I was living in Germany at that time, and bought some shares in some IPOs there. Next, I got interested in the stock market. Everything was going up, so I bought some shares of AOL and Dell, and held them for a while. I then became interested in monitoring the intraday price movements of these stocks. I tried to paper trade some Internet stocks, and did very well initially. I was making simple trades, based on simple patterns that I noticed for myself in the market. A few years later, I opened a direct access account. Thatís when I really started actively trading. But, I was fairly unprepared when I started. I really just came in with the knowledge of certain patterns that I noticed informally and tried to trade off of those patterns. From the moment I started trading actively, my approach seemed to fail. I started to see the patterns change dramatically. I saw the Internet stocks drop significantly, like $2, and then bounce back another $1.50 or so. Overall, however, they were in a steady downtrend. So, right away, I experienced some heavy losses.
I then realized that trading is not as easy as I had thought. I realized that I needed something more sophisticated, so I went on to look at other peopleís strategies. Basically, I called my broker and asked him for advice, and then worked with traders who helped me refine my techniques. I found some fairly good people who were able to teach me in real time. For example, they actually explained what they were doing as the trade set up and unfolded. They reviewed entry and exit strategies, along with the rationale, etc. I incorporated a lot of what I learned into my trading method. I moved forward substantially from that point on, learned more and more strategies throughout the years, and pretty much learned by actively trading.
What is your occupational background?
I worked in the electronics industry in Germany after completing my formal education. I moved to the United States in 1998. I always wanted to be independent, so trading seemed to be the right profession for me. You can do it from any place in the world. When I initially started trading, I tried to live off of my profits. Of course, I only had a small amount of money to invest, so it went terribly wrong because I was under way too much pressure. I told myself that if I wanted to succeed as a trader, I needed to have a job to support my trading, just to ease the pressure. Thatís what I did for the first year and a half. I traded part-time, while working in my job in the electronics industry.
Was there a point when you started to trade consistently, to where you were able to live completely off of your profits from trading?
Yes, about two years after I started.
How did you get interested in coaching?
Trading actually becomes pretty boring once you gain enough experience. You know whatís going on out there. It all comes down to the same basic principles and methods.
What kind of returns have you been getting in the past year?
About five to ten percent a month.
How do you gauge your performance? Do you set specific goals?
I set goals based on dollar amounts, and Iím happy if I make about $500 a day. But if Iím even on some days, thatís fine too. I donít worry about how I do on a daily basis. I try not to lose too much, but I know that some days are difficult, so Iím willing to accept that fact when Iím even, or even slightly a little down. The goal is to make money at the end of the month, not at the end of the day.
Meaning that, on any given day, you donít worry too much if you havenít made the $500?
Exactly. Thatís why I also like to work as a trading coach. Trading really does get a little boring after a while, and I donít like to stare at the screen all of the time. So, I pretty much look at the markets every day, and I can quickly determine whether itís a day where Iím feeling comfortable with making money, or itís a day where I want to stay away.
By "comfortable" you mean there are opportunities out there?
Yes, thatís right. I determine whether Iím comfortable by just scanning daily charts, for example. If I find some interesting opportunities out there, then Iíll certainly not leave my desk. But, other times Iím not comfortable, and stay away from the markets. For example, I may have strong expectations that later turn out to be totally wrong. When that happens, itís hard to adapt to the new situation, and Iíll just quit for the day. Iíve noticed in the past that itís just very hard to switch from one opinion to another. Itís hard to make yourself completely detached from your expectations when the market action seems to be going against you. Once you have a strong expectation, itís hard not be influenced by a lack of correspondence between what the market is doing and your expectations. I get a little stuck. I focus only on my expectations, and I get a little off track. I have a pretty good sense for when Iím a little bit off track. When that happens, Iíll just step back and either wait a little bit or take the rest of the day off. I work on my coaching business instead. For example, I work on forming business alliances and marketing my website. Having the coaching business on the side takes some of the pressure off, since I donít have to rely only on my profits as a trader for my basic living expenses. I often advise my clients to continue trading on the side, in addition to their regular jobs, because it eases the pressure. I think thatís very important.
Do you find that itís tempting to keep monitoring the markets, even though you have taken a break for the day?
No, actually. Iím not addicted to it anymore. I was a little addicted when I first started. Thereís a huge difference between my first couple of weeks of trading and nowadays. During the first couple of weeks, I couldnít stop looking at the screen. I would even go without eating. I wouldnít eat until four oíclock in the afternoon when the market was closed. You learn through the experience that there will always be good chances out there, you just have to be in a relaxed state, and then they will come to you. Once you look for them, of course. But if you pressure yourself to look for them, then you run into situations where you make too much of a prediction and form a strong expectation, rather than just seeing whatís going on out there. So, Iím pretty relaxed when I look at charts these day to find trading opportunities. Again, having a coaching business on the side helps keep me relaxed. Iíve found that a complete focus on trading makes it more difficult.
When you first started trading, did you tend to overtrade, in that you put on trades when you shouldnít have?
Yes, but I was always able to catch myself very fast. The first day I started trading, I broke my stop loss, and my stock was down about 10%, and then I sold it. It fell from $102 to $93. I never did that again. Never. So, I was able to adapt very fast. Itís important to remember that there are always a few good trades out there, and even if you do just a few good trades a week, youíre going to be fine. But, thatís just my opinion. Other people can scalp. You can go in and out within seconds all of the time with no problem. But, the people who are really successful just have a good feeling about what they are doing. Itís very hard to explain why they are good at it. At that level of skill, it doesnít have that much to do with analysis. They just do it by monitoring the specific stock they are watching. When clients ask me about scalping, I tell them to try it, if they are up for it. But, overall itís going to be much more difficult because thereís much more room for personal interpretation when youíre scalping, and itís going to make the whole thing a lot more difficult because the rules are not very well-defined.
What are some of the issues that prevent your clients from becoming good traders?
A lot of people have strong expectations that they refuse to give up. They may have been watching the markets, and developed a strong opinion regarding a particular stock. For example, consider Intel. Clients, on more than one occasion, have come to me saying, ďOkay, I was watching Intel the last couple of weeks. I was trading it on paper. I made good profits, and I have a good understanding of the price patterns. I really want to trade it. I also have a big advantage when I trade Intel, because if I happen to be caught in the stock and it goes against me, I can always wait because it always comes back.Ē They firmly believe that Intel is so strong that it will eventually come back. Most of the time the clients are right. Intel does come back. But, I point out that if they are wrong one out of a hundred times, they are not going to be in the business anymore. However, they are often rigidly set in their opinions. I canít change their minds. At that point, I tell them to go ahead and just try it. But, I also try to persuade them to trade only 100 shares or less, so they can learn from feeling the pain of losing without losing too much. I tell them, ďMake the mistake yourself." Other people are so confident in their opinions that they immediately trade 1000 or 2000 shares instead of 100. Holding overly strong opinions is one of the main problems of people learning to trade.
How do your clients respond to your coaching, in general?
I hear very positive comments from my clients. They say that I helped them to gain confidence in their trading decisions, because I reviewed their trading decisions with them, or that they learned new strategies from me and are able to make money by using them.
Do you have any kind of specific guidelines for risk management that you use or that you offer to your clients?
Well, you know, the 2% rule. Personally, I donít like to lose more than $200 on a trade, so I look at my risk, I look at my chart, and I see how many shares I can buy.
Isnít a $200 loss a little too difficult to maintain?
Yes, it is. Sometimes I will go up to $400.
Right, because youíre going to get stopped out, depending on the volatility.
I would never let that happen. I place my stop based on a technical level rather than just a dollar amount. I look at the chart, I determine where to place my stop, and then I determine how many shares I can take, and if Iím willing to take that risk. There are also many other things that come into play when you consider your technical stops. The whole thing is fairly complex. Thatís why I believe itís very important to really learn over time. The ideal is to have somebody sitting next to you every day for at least half a year. However, when people come to me, they usually already have some trading experience. They have a rough idea of the price patterns for certain stocks. They have read some books about technical analysis, but they have a hard time implementing the knowledge. Sometimes theyíre actually pretty sophisticated traders who have a good understanding of fairly complicated technical indicators, but they have no clue of how to implement a trading strategy using these indicators. Thatís where I come in. I sit down with them. I show them what I do, how I set up my trading screen. Itís often very enlightening for them. Then, they go out there and theyíre happy. They say things such as, ďOh my God! You know, this is a good idea. This is how I can do it. Why not? Let me try this!Ē.
Do you think there are cultural differences between Germans and Americans, and if there are differences, did these differences have an influence on your trading?
In Germany, I grew up in an environment that valued job security. I was taught to seek a job that is secure, to work for an established company, rather than open my own business and risk my own capital I was expected to work my way up the career ladder slowly and steadily in order to gain safety. The German mindset is different. They focus a lot on gaining security. For example, in the United States, you can live without health insurance. In Germany, people would tell you youíre crazy! The environment was not very consistent with trading. People Iíve met in the United States seem to be the complete opposite. They look more at the opportunities before the risks. They donít dwell on what could go wrong by becoming a trader. That is partly why Iím here in the United States.
Trading isnít a profession thatís consistent with feeling safe and secure. You have to take risks to make money.
Yes, and to be quite honest, even now, I still do not want to be solely reliant on trading for my entire income. The safety issue from the past was a big issue when I first started trading. Initially, I was afraid to lose, so I set very clear guidelines for how much I was willing to lose. For example I thought, ďI have a $10,000 account. If Iím down to $8,000, Iíll stop.Ē
How did you get over your aversion to risk?
By just taking it step by step. Doing it slow. First, having a regular job and building up confidence, trading small amounts and then going larger, and then always keeping strict stop losses. Things like that, and focusing on trades that I really had confidence in. On the other hand, thereís the overconfidence issue with regard to some people thinking there are more opportunities out there than there really are. Not in terms of trading opportunities. There are really good opportunities out there. But in terms of, for instance, the Intel example I spoke of earlier. They strongly believe that Intel WILL come back, so they just go in there buying one, two, or three thousand shares without realizing that no one actually just starts trading the market and take off. Have you ever talked to a trader who never blew a stock? Who never had a horrible loss? Have you ever?
It seems that most seasoned traders have told us that they have experienced large losses at some point.
Actually, I never had horrible losses.
Youíve never blown out?
Small shares. Actually, I was never down more than $3000 in the account overall. I had a big loss on the first day, but it was only on 100 shares.
Do you keep a trading diary, where you record your feelings and thoughts before and after you execute a trade?
I used to. I used to write everything down: why I went into the trade, how I felt about it, and especially how I felt afterwards. I recorded what I could have done, looking back in hindsight, and then sorted out the things that werenít okay. But nowadays, quite frankly, I donít do that anymore.
What were some of the things you learned from that process?
Itís hard to remember because it was quite a while back. I can only remember a few common things. For example, whenever I was down on two trades, I decided to stop trading. Whenever I had a bad feeling about the market, I would stop and not even consider trading. Things like that. In the end, it all boils down to over thinking it. Overall, when you look at the trading business, itís fairly simple. You can do a lot of things in trading, but it all comes down to your risk management and your ability to let profits run. Itís very simple, but you can have a lot of different strategies and they can all work out. So, itís not about finding something thatís special. Thatís what I realized by doing these things. Find something youíre comfortable with and then work on that. Know that patterns change, but donít get confused when youíre not making money two days in a row. That doesnít mean that you have bad strategy.
How do you prepare mentally, physically and psychologically before you enter a trading day?
Well, mentally, I try to have a good list of stocks ready so I can be fairly calm. I look for things that are detached from the overall market movement, so I donít have to worry that much if the market goes up and down. Ideally, Iím looking for something that will move my way no matter what the market does. I try to have this good list ready, and that gives me confidence. Other than that, I try to take a walk. I try to get away a little bit from the markets. Things like that can be very good.
This interview received a rating of " 87 "
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