Hit And Run Trading
Short-Term Trader Jeff Cooper
by Jayanthi Gopalakrishnan
Few people have succeeded in trading the way Jeff Cooper has. His first book, Hit And Run Trading, is often referred to as the bible of the short-term trader. His other work, including Hit And Run Trading II, has further given insight into his ability to spot unique trading setups that over time profitably repeat themselves. His next book (with partner David Reif), Wheels Of Time And Price, will be published in 2005 by Traders Library. Cooper is a regular contributor to TheStreet.com, where he also offers his Trading Report subscription service. Currently, he manages money at www.MutualMoneyFlow.com. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Cooper on February 10, 2004.
My father taught me that speculation is observation, and that thinking isn't really necessary and often just gets in the way.
How did you get interested in the financial markets?
My father operated one of the first private hedge funds in the 1960s, and as a teenager I was always fascinated that his decisions were basically intuitive and instinctive, in the sense he was a tape reader. He didn't come from a background of academia, he didn't have an MBA. In college, my majors were cinema and literature, so I was more right-brain than left-brain oriented too. I think that led to my interest in trading psychology and the way the market seemed to repeat certain patterns, and traced out fractals of patterns on different time frames. I was also intrigued that I saw my dad sitting at his own desk, and he was his own boss, but without any inventory. He was more or less a short-term trader. In my naïveté, it seemed to me he was able to make money with little effort.
There was effort, but you didn't realize it.
What I failed to realize was that years of watching the markets gave him an edge. He taught me that speculation is observation, and that thinking isn't really necessary and often just gets in the way.
Can you tell us about one of your experiences?
I went to work for my father in late 1980, just as Apple and Genentech were going public to much fanfare. I think Genentech was up something like 50 points on the open and Apple was up close to 30 points, and that got me interested. Shortly after that came the bear market of 1981. I didn't know what to do. My dad was basically a new-issue man, and there was really nothing for us to do in the markets. But I was fascinated.
What did you do?
I took an extension class with Richard Haft, who worked at Drexel Burnham Lambert at the time, and he suggested I interview with Drexel. I did, and I went to work for them, but left after about six months. I was more interested in the mechanics of the market and what made the market tick than I was in selling other people's ideas.
Did you always trade short term, or did you start off more as an investor?
I wasn't always interested in the short term. My initial experience
with trading occurred when I inherited some money in 1982 that wasn't going
to be available until 1983. At that time, the long-term interest rates
were 13-14%, and I really wanted to lock in those rates, because I didn't
think they would hold. So I thought that if I bought some bond futures,
I could take delivery the next spring, when I would receive the money I'd
inherited, and lock in that rate.
...Continued in the April 2004 issue of Technical Analysis of STOCKS
& COMMODITIES
Excerpted from an article originally published in the April 2004 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2004, Technical Analysis, Inc.
Return to April 2004 Contents