Glenn, I originally thought you may be alluding to trading volatility (or lack of). Fine with that.Glenn said:It would be sensible to stand aside if you didn't know what you should do in terms of taking a position.
But if you have a method for entering in flat markets, then you don't need to stand aside.
A simplistic example:-
You look at a chart and see where you could have opened a position in the past.
Your method confirms that had you entered that position, you would still be in it even though the market is now flat..
Therefore you could enter the position now in much the same way as you might pyramid the initial position.
Glenn
-oo0(GoldTrader) said:Hybrid Thread
“he really meant to tell them that the big money was not in the individual fluctuations but in the main movements that is, not in reading the tape but in sizing up the entire market and its trend. “
-oo0(GoldTrader) said:” old Mr. Partridge kept on telling the other customers, "Well, you know this is a bull market!" he really meant to tell them that the big money was not in the individual fluctuations but in the main movements that is, not in reading the tape but in sizing up the entire market and its trend. “
To me, the above quote is the Crux of the book. After initially making money in the bucket shops, Jesse Livermore was forced to try trading on the main boards of Wall Street, as he was banned from trading at most of the bucket shops.
This was JL’s move from the minor league to the big league.
He moved to New York where he proceeded to take losses, despite being correct in most of his selections.
He didn’t know what he was doing wrong, and the sage advice of "Old Turkey" (Partridge) didn’t dawn on him immediately.
"I knew I needed to change my bucket shop methods ..…. “
“You find very few (customers) who can truthfully say that Wall Street doesn't owe them money. Well there was one old chap who was not like the others."
This was "Old Turkey".
"My dear boy, if I sold that stock now I'd lose my position; and then where would I be?"
Adoption of Old Turkey's approach and sitting it out on "the Big Swing" despite the numerous fluctuations, was to be the turning point in Livermore's career - his entrance so to speak, into the Big League.
He realised that trading the minor fluctuations and the costs associated therewith, while at the same time missing the "big move", (the timing of which can't always be anticipated), was the cause of his failure.
"I think it was a long step forward in my education," he says in the book.
There is more wisdom; insights into the behaviour of people, and common sense in this book than any other I know of. Not only as regards the stock market, but life in general.
Hopefully your appetite has been wetted, because there is so much more to read.
pratbh said:As far as I know Richard Smitten has pruned Livermore's work for some unknown reason. The only way you can read the original work is by buying the 1991 (or earlier) edition for an astronomical price at eBay (checked this morning, there's one for USD 450).
I just can't figure out why someone would edit out Livermore's work and why people would still buy that.
pratbh said:Not RSO, I'm talking about How To Trade In Stocks by Livermore himself.
TheBramble said:Glenn, I originally thought you may be alluding to trading volatility (or lack of). Fine with that.
But your above example doesn't take into account the 'time cost' of 'dead money'.
Jesse didn't like to leave his money on the table...
How exactly are you going to end. Seems a little premature to comment on someone else’s selection. What does traders reaction to alzheimer's have to do with his obvious success in trading the markets?donaldduke said:shame he had to blow his brains out in the end.![]()
and commodities.stevespray said:Livermore clearly had a massive talent for trading stocks
Good point, we often overlook how he would anticipate, based on general conditions. Some times, just a little to soon.the early detection of changes in the overall trend of the market.
That probably contributed to why the press thought he was the cause of the crashes that ensued. I am sure he helped them along a little.I think that this ability to detect Changes In Trend (CIT) is one of the most overlooked subjects when people discuss Livermore.
Real Nice. Livermore’s Grubstake Speculation.‘grub stake’
People are people, the grandkids of the people who ran the market then are running it now. Markets repeat.based on the reasoning that markets are in some way different
Very good incite. Where are we in the cycle?Livermore’s basic theories centered around his belief that the markets continually cycled. Of course each cycle was slightly different and the cycles moved through at different speeds but Livermore’s single biggest talent, in my opinion, was that he could always detect where the market was in its cycle.
So we have many cycles moving and evolving at varying speeds.Of course what he was looking for were the signs that cycles were moving forward and evolving into the next phase, a phase perhaps where the real money could be made.
Catching those early moves gave him the capital to scale in and ride the trend.They’ll all tell you what an amazing trend rider the man was and how he was brilliant at scaling into positions on the big moves but the fact is that it was the man’s ability to pick the major tops and bottoms which really gave him the edge to get into the big moves early.