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Hi there Edward, nice summary:
"At the age of twenty-one, tired of his problems with bucket shops, Jesse Livermore arrived in New York. His goal was to trade in the offices of a member of the New York Stock Exchange.
He began trading at the offices of A.R. Fullerton and Co. and within six months had lost all his money.
Livermore realized that trading in bucket shops had left him ill-prepared for trading in the offices of a stockbroker.
Bucket shops offered immediate execution of orders because trades were in-house - they did not pass through the stock exchange. In bucket shops Livermore also knew the exact prices he was buying and selling at.
Dealing with a legitimate broker resulted in costly delays. It took time to telephone orders through to the exchange and then more time to execute them.
According to Livermore, his trading style, which was a perfect system for trading in bucket shops, didn't work in Fullerton's office.
"The price of Sugar on the tape might be 105 and I could see a three-point drop coming. As a matter of fact, at the very moment the ticker was printing 105 on the tape the real price on the floor of the Exchange might be 104 or 103. By the time my order to sell a thousand shares got to Fullerton's floor man to execute, the price might be still lower."
" ...in A. R. Fullerton's office the tape always talked ancient history to me, as far as my system of trading went, and I didn't realize it. And then, too, if my order was fairly big my own sale would tend further to depress the price. In the bucket shop I didn't have to figure on the effect of my own trading. I lost in New York because the game was altogether different."
So, despite his remarkable powers in interpreting price patterns, Jesse Livermore's trading style, developed in bucket shops, was unsuited to trading in real shares.
He returned to the bucket shops - this time in St Louis where he was less well known. Soon he was recognized and the bucket shops refused him further business. He had, however, managed to accumulate enough money to return to New York and resume trading.
"My task, as I should have known after my first reverses at Fullerton's, was very simple: To look at speculation from another angle. But I didn't know that there was much more to the game than I could possibly learn in the bucket shops. There I thought I was beating the game when in reality I was only beating the shop. ... The game taught me the game. And it didn't spare the rod while teaching."
Continued:"
http://www.jesse-livermore.com/stockbroker-woes.html
Eventually he of course learned to live with the delays.
Bedsit, true enough re his suicide, but let's not forget that at one point he managed to turn zilch into what in todays money would have been a cool Billion, and he suffered from severe depressions.
That doesn't always for a long life make.
"At the age of twenty-one, tired of his problems with bucket shops, Jesse Livermore arrived in New York. His goal was to trade in the offices of a member of the New York Stock Exchange.
He began trading at the offices of A.R. Fullerton and Co. and within six months had lost all his money.
Livermore realized that trading in bucket shops had left him ill-prepared for trading in the offices of a stockbroker.
Bucket shops offered immediate execution of orders because trades were in-house - they did not pass through the stock exchange. In bucket shops Livermore also knew the exact prices he was buying and selling at.
Dealing with a legitimate broker resulted in costly delays. It took time to telephone orders through to the exchange and then more time to execute them.
According to Livermore, his trading style, which was a perfect system for trading in bucket shops, didn't work in Fullerton's office.
"The price of Sugar on the tape might be 105 and I could see a three-point drop coming. As a matter of fact, at the very moment the ticker was printing 105 on the tape the real price on the floor of the Exchange might be 104 or 103. By the time my order to sell a thousand shares got to Fullerton's floor man to execute, the price might be still lower."
" ...in A. R. Fullerton's office the tape always talked ancient history to me, as far as my system of trading went, and I didn't realize it. And then, too, if my order was fairly big my own sale would tend further to depress the price. In the bucket shop I didn't have to figure on the effect of my own trading. I lost in New York because the game was altogether different."
So, despite his remarkable powers in interpreting price patterns, Jesse Livermore's trading style, developed in bucket shops, was unsuited to trading in real shares.
He returned to the bucket shops - this time in St Louis where he was less well known. Soon he was recognized and the bucket shops refused him further business. He had, however, managed to accumulate enough money to return to New York and resume trading.
"My task, as I should have known after my first reverses at Fullerton's, was very simple: To look at speculation from another angle. But I didn't know that there was much more to the game than I could possibly learn in the bucket shops. There I thought I was beating the game when in reality I was only beating the shop. ... The game taught me the game. And it didn't spare the rod while teaching."
Continued:"
http://www.jesse-livermore.com/stockbroker-woes.html
Eventually he of course learned to live with the delays.
Bedsit, true enough re his suicide, but let's not forget that at one point he managed to turn zilch into what in todays money would have been a cool Billion, and he suffered from severe depressions.
That doesn't always for a long life make.
