Rossini
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You obviously don't know what MM is then? ;-)
You obviously don't know what MM is then? ;-)
Technically Fundamental
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I just wanted to shake things up. This is the first thread I've seen everyone agree lol.
You're right Aaron.
JL had some serious money management skills in order to turn thousands into millions.
However, his money management skills FELL APART when he went on tilt and the trading demon took over.
One note on Livermore's demise:
He was clinically depressed for the last several years of his life. This combined with his unsuccessful battle with his tradig demon was, unfortunately, too much for him to handle.
Also, the lessons that he teaches in "Reminiscences" cost him great financial and emotional pain to learn. If one really understands these lessons, they can learn from his major mistakes and save themselves enormous financial and emotionl pain.
Can anyone reccommend a really good book on the psychological aspects of trading?
Technically Fundamental
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He's just a c*ck head. If that was me I'd have f*cked off after I made 10+ mill, bought a yacht with a speedboat and jetski (or whatever the equivalent was in his time) and just got smashed everyday doing water sports in the south of france. IMO if you're good enough to make serious cake in this game you should just pass it on to a fund and retire before you blow up.
Technically Fundamental
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When you're speaking about long term success, you could mean that the person themselves feels that they are successful towards the end of their life. Or you could mean that their contribution will still have an effect decades later. I think the latter is a better judge, but I see where you're coming from theBramble. Cobain for example might have hated his life, but if people are still listening to his music in 100 years, he was long term successful as far as music and the world is concerned. Was Cobain in a good position to really judge whether he was a failure or not? Sure that is his life, but if he killed himself, perhaps his mental state wasn't the best, and so his judgement was impaired. By the same token, Einstein who in his last days was frantically trying (and failing) to produce his unified theory might not in those moments consider himself long term successful because there was something he couldn't do (plus several marital problems etc.). But how many would consider him a failure? We still use things he wrote 100 years ago, and traders still pore over Livermore's words even now. In that way, he is certainly long-term successful in parts of trading, if not in life.
Perhaps you could consider trading as a mixture of forecasting and money management (for when your forecasts are wrong). So Livermore was a brilliant forecaster and poor at money management. Then we should learn everything we can from him about forecasting, and everything from him that we should not do regarding money management.
Perhaps you could consider trading as a mixture of forecasting and money management (for when your forecasts are wrong). So Livermore was a brilliant forecaster and poor at money management. Then we should learn everything we can from him about forecasting, and everything from him that we should not do regarding money management.
I've seen many people mention Douglas' books. The "Disciplined trader" and "Trading in the Zone". I can't comment on either, but there might be a review somewhere on the site.
Good Post Calinor.
I agree, strongly, that we should learn everything we can about Livermore's forecasting and everything to avoid by learing how he gave back all his profits.
There was a passage, somewhere in the book, that I found salient.
Livermore stated that there were many times when he was in a position with a profit but he would let the market come back to the point of wiping out his account.
He also stated never argue with the tape.
Those statements are contradictory, and he knew it. His foible was that he knew he was right on the position but was willing to let his profits come back in order to hold the position for the big move. Many times he was right and made millions by successfuly increasing his position on a big winning trade.
I think the lesson here is never let NICE profits turn into a loss.
He got very opinionated because he had so much success playing general conditions.
He talks aout his transition from a tape-reading trader to a general conditions trader who made killings by increasing a winning position on monster trades.
He was fond of saying: "the big swing makes the big money"
IMO he was much better off playing his tape-reading system "especial", as he liked to call it. The same one he used to beat all those bucket shops.
In short, by position trading general conditions it is much easier to get wiped out than by tape reading short term. It is much easier to go on tilt position trading general conditions and that is what happened to him.
By his own admissions, he was better off plaing the way he used to beat the bucket shops.
He really fell pray to his own inner trading demons which could have been avoid, mostly, by not getting so opinionated on general conditions.
Still, with proper money management skills Jesse might have owned the world position trading general conditions.
Thanks for the book recommendations- I will look into them.
A materpiece is something that stands the test of time and "Reminesciences", 100 years later, certainly passes that test.
"When in doubt stay out"
donaldduke
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He had a 40 foot yacht and did enjoy atleast one water sport (fishing), from reading Reminiscences of stock operator he mentions fishing, and i always thought that a bit tame, but look at the size of the fish he used to catch!
Attachments
Donald,
Where did you find that photo?
In one passage, on a fishing trip, he talks about fishing, friends, and not having a care in the world.
Jesse not only had great observations about trading; he had great observations about life.
TheBramble
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All the fish are pointing down. It's a sign. Short fish futures!!!!! Scale in.
dick_dastardly
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So it sounds like the guy was crap at exits.
Anyway, I think I remember reading somewhere the main reason for his trading demise was that after he and a couple of others got the blame for the 29 crash the US Government introduced regulation which cramped his trading style too much.
Is/was Paul Gascoigne a successful footballer ?
dd
Anyway, I think I remember reading somewhere the main reason for his trading demise was that after he and a couple of others got the blame for the 29 crash the US Government introduced regulation which cramped his trading style too much.
Is/was Paul Gascoigne a successful footballer ?
dd
rawrschach
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He wasn't crap at exits, he was a tape reader - he usually got out at the very top/bottom.
The first few times he blew up were when he was still learning. After he figured out his method he blew up again after letting someone get in his head. Not sure how he blew up after 1929, and judging by the fact that he needed to 'mortgage' his wife's jewellery he blew up a couple times in between.
The first few times he blew up were when he was still learning. After he figured out his method he blew up again after letting someone get in his head. Not sure how he blew up after 1929, and judging by the fact that he needed to 'mortgage' his wife's jewellery he blew up a couple times in between.
Technically Fundamental
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He's halfway there then. He should have given the bulk of the money to someone else to manage then. Keep a bit yourself for spends and trading and use the gains fund under management as a cash machine.
I'm smarter than him already :smart:
As this is a trading forum then it's fair to discuss his prowess and reputation due to
the swings he took, however I find the subject of his suicide as completely irrelevant
to his trading and his success in life.
It was known that he suffered from depression and this may have been linked to his upbringing. From running away from home, to being a millionaire at 30 (when a million was huge) and then the subsequent troubles in his family life. This has no link to what he did in the markets and should'nt be glorified as it is in this thread.
I don't think people 'idolise' him as such but his story is fascinating and also rather sad.
That said, I feel his 'how to trade in stocks' is probably the best book i've read on market psychology. The rules and advice are still relevant now and could've been written yeterday.
the swings he took, however I find the subject of his suicide as completely irrelevant
to his trading and his success in life.
It was known that he suffered from depression and this may have been linked to his upbringing. From running away from home, to being a millionaire at 30 (when a million was huge) and then the subsequent troubles in his family life. This has no link to what he did in the markets and should'nt be glorified as it is in this thread.
I don't think people 'idolise' him as such but his story is fascinating and also rather sad.
That said, I feel his 'how to trade in stocks' is probably the best book i've read on market psychology. The rules and advice are still relevant now and could've been written yeterday.
montmorencyt2w
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I dunno....seems he went out with a bang.
(sorry)
That was the impression I got.
A victim of his own success, one might say.
rawrschach
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plus the constant death threats
Read "How to Trade In Stocks" by Livermore, the one with oversight by Richard Smitten, as I think this book will clearly show you how good Livermore's trading principle were/are.
For example His "10% loss & out" rule is superb in my eyes (I use a modified version for my own trading).
I think that Livermore is still being dabated is a testament to the man and his legacy.
I think livermore has come as close as anyone to figuring out "the market", based off of his tradering principles and his huge successes, but ultimately he could not conquer the "human factors" which would have enabled him to keep much of the proceeds of his trading successes.
"I always loss money, when I stopped following my rules"....Livermore
For example His "10% loss & out" rule is superb in my eyes (I use a modified version for my own trading).
I think that Livermore is still being dabated is a testament to the man and his legacy.
I think livermore has come as close as anyone to figuring out "the market", based off of his tradering principles and his huge successes, but ultimately he could not conquer the "human factors" which would have enabled him to keep much of the proceeds of his trading successes.
"I always loss money, when I stopped following my rules"....Livermore
TheBramble
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That was LeRoy Livermore, surely.
Was it Jesse or Leroy Livermore who made the above quote?
I strongly agree with yessir.
If JL was able to conquer the trading demon he would have owned the world.
I can practically guarantee that Jesse would have broke the bank by being short
the Dow from 14,000.
He would probably still be short as you are reading this; however, if he was REALLY smart, he would have covered at DJIA 6800- the day Obama said the market was a good long term investment.
Right now, at Dow 8300, JL would still be a big short because general conditions still suck, really suck.
The problem JL would have bing short here isthat this Obama rally from 6800 has neutralized much of the short pressure.
In short, JL would still be BIG short here. I'd still be long from 6800 because this Obama rally has more to go.
Livermore was a genius and it is apparent if you really think and reflect about all that he says.
"When in Doubt Stay Out"
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