Can you trade like jesse livermore?

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Old Apr 24, 2005, 2:24pm   #31
 
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In the final analysis Jesse Livermore was not a good trader, he was too compulsive, probably verging on being a compulsive gambler.

Sure he knew how make a fortune, but he didnt seem to know how to keep it. Seems like he
had problems managing his money properly, which as we all know is more important than tape
reading and no one can question his tape reading skills.

Ofcourse back in early 1900s no one probably really knew how to do it, so he was an amazing genius in
his time, shame he had to blow his brains out in the end.
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Old Apr 24, 2005, 4:57pm   #32
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Which I guess bring us to question whether the title of this thread would be more usefully changed to "Would you want to trade like Jesse Livermore?".

The answer to which would probably be along the lines of "Yes. When he was trading his rules and sticking to them. No when he wasn't. And definitely could do without what seems very likely to have been the struggle with a manic depressive trait".

Something of tribute though, whichever way you view it, we're still talking about the guy 65 years after his death.
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Old Apr 25, 2005, 4:06am   #33
 
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Review?

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Can you give us a book review with a few Livermore quotes?

What do you think is his system on first reading?
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Old Apr 25, 2005, 8:08pm   #34
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Afternoon…

Would agree with various comments already made, Livermore clearly had a massive talent for trading stocks and more importantly, the early detection of changes in the overall trend of the market. I think that this ability to detect Changes In Trend (CIT) is one of the most overlooked subjects when people discuss Livermore. Livermore, on several occasions, made vast amounts of money from what was essentially a ‘grub stake’ which I’m lead to believe was the equivalent of about £15,000 - £20,000 in today’s terms. This, on more than one occasion, he multiplied about 2000 fold. I find also that people often suggest that Livermore wouldn’t survive in today’s markets – this is of course a very subjective opinion and no one can know the answer. The basic premise for such comments are generally based on the reasoning that markets are in some way different from the markets of the late 1800’s thru to the early 1900’s. I personally think that this is not the case. I’ve read several books on Livermore as, I don’t mind admitting, I’m fascinated by the character. Livermore’s basic theories centred 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. If people think that markets have changed that much then I’d invite them to review the recent (ie the last 7 or 8) years in the stock market. The same gains would still be perfectly achievable provided of course that you could pick the highs and lows in the cycle. Of course, when you read a book about someone’s entire professional life, it becomes a blur. It is difficult to put an immediate timescale to what is being discussed and therefore an illusion can be created about what is going on. Of course we know, because charts of the markets from Livermore’s time exist, that there were long periods of flat / sideways / boring (fill in the blank) markets to contend with. Generally Livermore was not interested in trading such conditions and would simply spend day after day in his dealing room monitoring the ticker and the price boards. This must have taken an extreme amount of patience? Can you imagine just going to work day after day and never placing a trade? 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. People have mentioned the books that have been written ala “How to Trade Like Jessie L Livermore” etc – The fact is that the people who write this stuff miss the whole point. This is why people who read these books always end up disappointed. In my opinion you are far better off reading about the man himself rather than trying to pick your way through a book which is written by someone who could never ‘think outside the box’ like Livermore could. 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.

Other points often missed are the facts surrounding Livermore’s ‘wipe outs’. My understanding is that quite a sum of money was lost in external ventures with other business men – he was basically ripped off. Livermore also recognised the fact that a certain amount of money had to be ‘taken off the table’ and he did in fact do this at various times. He used the money to set up various trust funds for people in his family. He also bought a rather exclusive residence and other expensive niceties such as boats and cars. The truth is that Livermore and his family could have lived quite comfortably on what they had – The fact is that Livermore put his assets out of the way of potential creditors when he declared himself bankrupt on several occasions. That’s probably the one thing that the man couldn’t get away with if he lived in present times, he would be forced to liquidate key assets. As it was Livermore always seemed on good terms with his creditors and for the most part insured that money was returned during the good times. There was also a situation where Livermore was personally asked, by J P Morgan no less, not to further short a market which was in panic. Livermore was actually in a very strong position at that time and could of, if his wish desired, pressed the market and made considerably more than the $6m that that particular series of short positions made.

The title of the thread was ‘Can you trade like Jesse Livermore?”. I don’t think that anyone can answer that with a ‘yes’ such is the reputation of the man. If you however asked, is it possible to emulate similar success but on a lesser scale then I would say that is certainly possible for people to achieve. What you have to bear in mind though is a point I made earlier – Livermore’s life and subsequent trading successes were spread out over many years and therefore it is likely that an individual trying to emulate that success today would also have to do it over a considerable period of time. It is also possible of course that Livermore’s education, as a chalk-board boy, was unique to that era – by doing that job Livermore was able to earn a living whilst also exposing himself to almost every ‘tick’ of the market. There is no such job available today, the only way to expose yourself to such data is to sit in front of the computer and watch it, for that you will not earn a living. Of course, Livermore’s presence inside a dealing room would also have exposed him to some aspects of psychology (amongst the speculators) which can not be observed in today’s electronic market places except perhaps though the observation of volumes.

The guy really was an Ace in my eyes.

Steve.
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Old Apr 25, 2005, 8:27pm   #35
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page 236
( short squeeze of old Drew ) What goe's around comes around

and when old Drew begged for mercy the Commodore grimly quoted the Great Bear's own deathless distich:

He that sells what isn't hisn
Must buy it back or go to prisn.
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Old Apr 26, 2005, 2:08am   #36
 
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Will you be living tomorrow?

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I guess we should temper your advice.
Quote:
Originally Posted by donaldduke
Click the image to open in full size. shame he had to blow his brains out in the end.
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?
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Old Apr 26, 2005, 6:47am   #37
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What is this 'Hybrid Thread' heading on Gold Trader's posts?
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Old Apr 27, 2005, 12:14pm   #38
 
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Jesse Livermore is a legend, but I sometimes ask myself if some of that brilliance and the fact that he is still remembered some 65 years after his death, was as much due to the book “Reminiscences” written by Edwin Lefevre as to JL.
Apparently he was an amazing journalist, who had the knack of getting the most out of people.

One only has to look at JL’s own book to make a comparison. Admittedly the book was written a year before Livermore committed suicide. By that time, he had lost his fortune (yet again), and must have felt dispirited, old and tired. Whatever the reason, the book lacks the sparkle, as well as the delightful stories, perceptions and characters that permeate the “Reminiscences” book.

Maybe its time that Edwin Lefevre too got his due credit.
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Old Apr 27, 2005, 1:27pm   #39
 
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I sometimes think what a great story his life is and what a cracking film it would make.
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Old Apr 27, 2005, 2:01pm   #40
 
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Grubstake

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Livermore’s Grubstake Speculation technique.
Quote:
Originally Posted by stevespray
Livermore clearly had a massive talent for trading stocks
and commodities.
Quote:
the early detection of changes in the overall trend of the market.
Good point, we often overlook how he would anticipate, based on general conditions. Some times, just a little to soon.
Quote:
I think that this ability to detect Changes In Trend (CIT) is one of the most overlooked subjects when people discuss Livermore.
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.
Quote:
‘grub stake’
Real Nice. Livermore’s Grubstake Speculation.
Quote:
based on the reasoning that markets are in some way different
People are people, the grandkids of the people who ran the market then are running it now. Markets repeat.
Quote:
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.
Very good incite. Where are we in the cycle?
Quote:
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.
So we have many cycles moving and evolving at varying speeds.
Quote:
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.
Catching those early moves gave him the capital to scale in and ride the trend.
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Old Apr 27, 2005, 9:06pm   #41
 
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When “Reminiscences” was written, Livermore was at the height of his fame.
Interestingly enough, some time before the 1929 crash, it was said that he
was all washed up and had lost his touch.

He then lost a considerable sum by selling short too early, just before the
1929 crash.
When the crash did occur, he is said to have made (in today’s terms) about
$3 billion. This is the greatest comparative fortune ever made by a single
trader.
A lot of critics must have eaten their words.

What an achievement ! To my disappointment nothing is mentioned in his
book on the background to this incredible feat.
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Old Apr 28, 2005, 2:27am   #42
 
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Oliver Stone

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Oliver Stone directing
Quote:
Click the image to open in full size.I nominate Gary Oldman for the role.
Gwyneth Paltrow as his mistress.
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Old Apr 28, 2005, 7:33pm   #43
 
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Quote:
Originally Posted by -oo0(GoldTrader)
Hybrid Thread

Oliver Stone directing Gwyneth Paltrow as his mistress.
Sorry guys, but someone beat you to it. The movie was called “The Yellow
Rolls Royce”. It comprised three stories, one of which was based on Jesse’s
habit of being chauffeured around town in his Rolls Royce and picking up prostitutes.



Thus the supporting cast might be more than the average producer can afford.

This habit also led to the breakdown of his first marriage.



What’s this got to do with trading like Jesse Livermore ??? Unless? nah!

Last edited by wobbles; May 1, 2005 at 12:29pm.
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Old Apr 28, 2005, 9:25pm   #44
 
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In answer to the original question, while I wait for my DIS trade to exit (to my advantage, for a change) I must answer:-

Yes, of course I can.

Dave
(He DID lose most of the time, right?)
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Old May 1, 2005, 12:48pm   #45
 
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Quote:
Originally Posted by DaveJB
In I must answer:-
Yes, of course I can.
Dave
(He DID lose most of the time, right?)
Depends upon your definition of Success. You can be right 99 times and
wrong just once. Just ask Victor Sperandeo.
He was wiped out three or four times and each time he came back bigger
and better than before; and although there was no onus on him to do so,
he also settled his previous debts.
The last time, he was unable to “come back”, but that had much to do with
personal problems in his private life.




To me he was a Giant – admittedly one with an Achilles heel.

But then doesn’t that apply to us all.
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