Trader’s Talk:
TEI’s Louis Horkan Interviews Jeanne Riecss

In this month’s Traders Talk, we’re chatting with Jeanne Riecss, one smart trader who’s managed to find success in the market marching to her own beat. Her path to trading is varied, ranging from work as a flight attendant and stock broker to a career in nursing…oh, she’s also a columnist and trading coach that many of you will likely recognize. She’s been at this for a good clip of time, made some serious dough and has some invaluable insight to share.

TEI: What got you interested in trading and the markets to begin with?

JR: I’ve been interested in the stock market since high school when I took my first economics course. You had to pick a few stocks and follow them over the course of the semester and see how they did. That’s probably what got me hooked. I have always been somebody who reads the Wall Street Journal when everybody else is reading a romance novel. When I worked at Delta Airlines as a flight attendant I would be sitting there and waiting to get on my flight reading the Wall Street Journal.

TEI: Was your education geared to finance or the markets?

JR: I actually had a two-year college degree and decided to go back to school. I did so and got a BA and a MBA with a finance concentration in just over two years. I got my BA from Western Illinois University and then I got the MBA at Dallas Baptist University. I did also work as a stock broker for two years, but I kept my job as a flight attendant the whole time.

TEI: Did you like being a stock broker?

JR: I realized quickly that I hated being a stock broker. I was a trader at heart and started to educate myself doing Wade Cook and going out to seminars… I met a lot of people who were giving me money to invest for them, but I hated it—I didn’t want to manage other people’s money.

TEI: That’s a pretty varied background. And you’re in nursing as well, correct?

JR: Yes, when things started to go bad at Delta I thought that I’m not seeing a whole lot of future in this.

I was trading stocks, but realized I’m not that great at it. So I started looking around and since every other person I met was a nurse, I decided I’ll go become a nurse. I had all these finance classes, but I had nothing medical at all. I applied though and got into nursing school and became a nurse.

TEI: And you continue to do that on a limited basis?

JR: Yes, because I’ve been successful in my trading I’ve gone from working full time as a nurse to working part time doing two shifts a month. I have certain trading quotas for myself and if I don’t make a certain amount of money then I make myself pick up a shift. Fortunately I don’t pick up many shifts.

TEI: When was it you started to trade for yourself and what did you focus on?

JR: I started at a really good time back about 1999. That was when you could pretty much throw a dart at anything that was dot com and it would just go up like crazy. Everybody was a genius. I started with about $50,000 in my personal account and ran it up to $200,000. I had to write a check for $55,000 to the IRS that year. This got me to thinking that I was making this amount of money trading my own stocks and not making anywhere near this working as a stock broker… so I quit. As for my trading, I was an options trader and was doing a lot of short puts.

TEI: Lots of traders made money at that time, but more still got wiped out in the crash thereafter. How did you fare during that period?

JR: Fortunately I started to get wise. I was looking at Fibonacci retracement levels at that time and thought that this is not going to last. I remember looking at NVDA, which was at about $150 at that time, and thinking that this stock is going to drop to at least $15 a share. All the other guys in my office were saying no way and telling their clients to buy it on dips.

Meanwhile I was telling my clients to buy puts for a year out. Many of them did. I know I did and within a year I had made $55,000 on those puts.

TEI: You mentioned training and the Cook program earlier. I assume you read lots of books as well, such as Trading for a Living and others of that genre.

JR: Yes, Wade Cook, Optionetics, Karson’s program and others. And I did read Trading for a Living and I’ve got all of Elder’s other books, along with just about everything else out there on trading and the markets. I’ve got an entire library. I’ve found that there might be just one sentence in a book where you go, “Wow, that really makes sense,” which can end up making a huge difference in your trading.

TEI: Looking back, what was a one of the toughest struggles you dealt with in your trading?

JR: I think we’re all too optimistic about the market. Comparing how I trade now to then, I know I didn’t really look at risk.

TEI: How has that changed for you over time?

JR: I’ve learned it’s really important to know my risk in a trade. Before you put a position on you need to know why you’re doing it…not just because you have a gut feeling the market’s going to do something… those kind of trades usually end up making you sick to your stomach. Whether it’s a technical thing or I’m looking at a certain indicator or there’s something that’s going to move the stock or option, you have to have an exit point. That’s the way I trade now—I know where I’m going to get out. When I go into a trade I want to know where to get out if it doesn’t work out the way I anticipated.

TEI: So you want to identify the potential cost of the trade going in by identifying where you’re gonna blow out if it doesn’t work?

JR: Exactly! And the shorter the trade, such as a day trade, you better take your money off the table pretty quick, especially if you’re trading something like Apple options—they can move a lot in one day and if you’re on the wrong side of that trade it’s not very pretty.

TEI: What’s your thought on biting the bullet and taking a loss on a trade?

JR: I’ve learned how important it is to take your loss. Sometimes they come back around and you might have made boo-coo bucks if you had not closed the position, but you can’t look at it that way. Instead you have to pat yourself on the back when you take a planned loss just as much as when you take a planned profit. That said, it’s not always easy. I don’t like taking losses…I hate them and don’t like being wrong, but it’s a fact that your first loss is your cheapest loss. If you did actually get out too soon you’ll have another chance to get back in the trade.

TEI: What originally attracted you to Preston’s coaching program?

JR: I was looking around for things to continue my education. His program wasn’t cheap, but it appealed to me because they seemed sincere when they said they’d really try and work with you to make sure that you would make at least the price of the tuition.

Onceyou start listening to the CDs and you hear of this or that person’s making $20,000 and $30,000 a month, you’re thinking that would be nice. At first when I started going over this system with Karson I didn’t really understand how it worked. But then when I started to learn and understand portfolio margin, I did get it. I realized that I could buy so much more stock and yet it’s protected. When I came to realize that I could have $50,000 to $60,000 worth of stock and only $10,000 dollars at risk, and could make $3,000 to $4,000 a month, I recognized that was a pretty good deal. I found it was a good system and within six months I had actually made $30,000 or $40,000 on my account.

TEI: Eventually you were asked to coach for the program.

JR: Yes, Karson asked me if I would do some coaching. I told him that I had met some people at the seminars that had been through coaching that still don’t get it. I suggested they give me those people to see if I couldn’t fine tune their trading a little bit or give them something else to look at or help them identify where they were making mistakes. That’s what I’ve been doing with the coaching program. And I started writing the “Jeanne’s Corner” pieces for the Stock Wiz Kid Website a little over a year ago.

TEI: Given your perspective of having utilized a coaching program and training other traders, what’s your advice regarding the merit of a coaching program?

JR: I can say honestly based on my experience that I am a fan of it. I’ve met people at seminars and I tell them to try coaching…they will fine tune your trading and give you something consistent to do. And you can always go to them if you’re having problems—you can ask what you are doing wrong and they’re there to help. I think it’s good to have somebody to bounce ideas off of. Believe me, what you spend for coaching is a lot
cheaper than what you’re gonna lose in the market without a good plan.

TEI: What’s the biggest problem you see with people coming into trading?

JR: They come in too optimistic and most are impatient. They really want the big bucks quickly. My view is that when you’re learning you should just focus on getting comfortable with your system, even if you’re just trading one or two option contracts at a time. So what if you only make $50 or $90 on the trade—you’re learning. As you get better and more comfortable, then go ahead and add another contract.

You have to get comfortable and consistent first. Don’t start out buying 10 and 20 contracts. That’s just too gut-wrenching and when it goes against you, then you’re likely to panic and lose money. Then you decide that this system doesn’t work even though it really does work. But only if you stick with it and trade your plan correctly and in disciplined fashion. I also believe it’s critically important at all times that you know what your risk is in a trade. You need to know where you’re getting out if you’re right and where you’re getting out if you’re wrong. If you can’t answer those questions, don’t push the button and take the trade.

TEI: Given the insight you’ve gained over the years in the market, what would you focus on if you were starting out now?

JR: I would keep it really simple. First, decide whether you’re looking for income or you’re looking for an investment? Have you maximized your 401(K) and you’re looking for further investment or are you looking for something that you can pay the bills with? If you’re looking for something that’s more of an investment, then I’d probably be looking at something like covered calls or money press trades where you have long-term options and you’re selling short-term options against your position. If I’m looking for income trades then I’d be looking to do short-term option trades… but you have to be ready and able to get in and out really fast if they don’t go your way. If that proved too stressful, you might buy the monthly options instead of buying the weekly options.

TEI: What’s your best advice for the newb trader coming into the business?

JR: What I said before…know your risk before you hit the trading button. Have two exits plans before entering a trade—know where you’re gonna take profits and losses.

TEI: And your best advice for those peeps that have been at it a while who’re struggling to turn the corner and find their way to consistently bagging profits in their trading? JR: We need to sit back and review your trades. What have you done? Have you followed your trading plan? I know for myself it’s not fun to look at my book and realize I had three opportunities to get out of a trade with a $200 loss, only to let it turn into a $2,000 loss.

I suggest keeping track of your trades in a journal. Write down why you got in, why you got out, the current market value of the option when you entered, etc. By recording the trades you can go back and look for a trend that will help you understand why and where you’re struggling. Am I coming to the party too late or perhaps I’m jumping in too early? By looking at the trades you may find that you don’t understand the concept of the strategy you’re trading or the application of the indicator you’re using as much as you think you do.


Jeanne Riecss is a nurse at St. David’s Hospital in Austin, Texas. She also worked as a flight attendant for Delta Airlines and had a brief career as a stockbroker where she soon realized she loved trading, not selling stocks! Actively trading for over 20 years, she wasn’t consistently successful until she was mentored by Stock Wiz Kid—Karson Keith. Coaching was the key missing ingredient allowing her to turn the corner and become a full-time trader. Jeanne now works at the hospital a couple days a month at her discretion. What’s more, she gets doctors asking her all the time what she’s currently trading.

You can read her column “Jeanne’s Corner” on the Stock Wiz Kid website.

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