Jesse Livermore - Reminiscences of a Stock Operator

[wasp]

Tom, most of the members of t2w (i think/hope) could give an ideal price to trade off (see potential set ups thread), but it's not about the ideal prices/values, it's all about how the individual trades/handles these prices.


The only method/plan a person will ever have, is thier own money management, just as long as the basics are in place first.




Paul.

Not, 'what you've got' but 'what you do with it!'

 

[trader_dante]

Hi there,

Hope I'm not taking this thread off at a tangent but, thanks to this thread, I've been reading up on Jesse Livermore and I was very interested in his trade of Bethleham Steel in 1915. As far as I can understand he took a position at $98 and, once it was confirmed that it was going his way (as I'm sure he knew it should), he bought more at a higher price ($115) and then sold at $145. I day trade and, once a trade is going the right way I place a stop at the point where the trade is doing what I expect it to do. Is it a sensible thing to increase my position at this point in time?

i.e. Sell FTSE @ £2 @ 4100 on 15 min chart
15 minutes into trade FTSE is at 4070 so place a stop at 4075 and lock in profit
At same time sell FTSE @ £4 at 4070 with stop at 4072 ( or thereabouts) to allow the trade to mature fully

Any thoughts would be gratefully appreciated. TraderDante, apologies if I am taking this away from the thread but, as a newcomer to trading, I hadn't heard of Jesse Livermore before and your heads up has been inspirational for me and I'd like to know if what I am asking about above is a viable strategy?
All the best
KJ
P.S. Feel free to move this elsewhere if I am asking a stupid question!! I hope you can understand how I have arrived at it though.

Kite, I think it is certainly a viable strategy but I only like to add at points where if I wasn't already in, I would open a new trade. Also, remember that if you double up each time, you cannot ride out a 50% retracement without going into a loss.

 

[trader_dante]

Livermore was a man who based his reason for being on the fact that he was a successful trader. It did not matter that he had millions to leave his wife, when he died. The reason he gave was that he had been having a string of bad trades. That was enough reason for shooting himself.

Perhaps Livermore's unlucky streak was due to the fact that times had changed and what he did successfully as a young man did not work in the forties.

Principally the SEC changed the rules.

 

[trader_dante]

He was the man in control of the 'numbers', or were the numbers in control of him?

He had a form of OCD with numbers. I know this from my research on him but you can see a glimpse of it in Reminiscences when he feels compelled to offer the book agent an even two hundred dollars.

 

[Paul71]

He had a form of OCD with numbers. I know this from my research on him but you can see a glimpse of it in Reminiscences when he feels compelled to offer the book agent an even two hundred dollars.

Ocd? No way! Think about what you are saying. No ocd would go bust as many times as Livermore did.


I agree with what you say, Tom, but it doesn't add up.






Paul.

 

[Paul71]

Not, 'what you've got' but 'what you do with it!'

Wasp,

I know i'm far more hansome than you, but your 'lines' may tilt the scales, see where i'm going with this?



Paul.

 

[trader_dante]

Ocd? No way! Think about what you are saying. No ocd would go bust as many times as Livermore did.

I am merely recounting what I have read from informed sources.

He had OCD. It is what it is.

 

[Paul71]

I am merely recounting what I have read from informed sources.

He had OCD. It is what it is.

He also suffered from depression. How does OCD and depression work together? Depressives are not normally OCD. Maybe we are not correctly informed?

 

[rawrschach]

Actually, it is the opposite. People with OCD usually suffer from depression because of the emotional strain caused by the obsession; the actual chemical imbalance for both is is quite similar.

Keeping his profits was not his obsession, as far as I can tell he didn't worry much about that, so whether or not he had OCD would have no bearing on whether he blew his account or not.

 

[Paul71]

Actually, it is the opposite. People with OCD usually suffer from depression because of the emotional strain caused by the obsession; the actual chemical imbalance for both is is quite similar.

Keeping his profits was not his obsession, as far as I can tell he didn't worry much about that, so whether or not he had OCD would have no bearing on whether he blew his account or not.

Ocds don't realise a strain, you have personally put the 'strain' upon ocds, thankyou Mr. Politically correct.

 

[rawrschach]

Obsessive compulsive disorder - OCD symptoms, treatment of compulsions & obsessions

You may feel tense, anxious, guilty, disgusted or depressed about OCD. If you carry out your compulsion, you may feel better in the short-term but in the long-term your anxiety may return.

Compulsive behaviours can be very time consuming, often getting in the way of normal work and family life. They can also be embarrassing. The time taken up by compulsions and the embarrassment they cause may increase your stress levels even further, making symptoms worse.
OCD and depression

If you have OCD you may also have symptoms of depression. This may be due to the emotional strain of dealing with obsessions, or because OCD and depression involve similar chemical imbalances in the brain.

Which is where I saw it; I'm inclined to believe them over you.

And how on earth is what I said politicaly correct?

 

[Paul71]

Obsessive compulsive disorder - OCD symptoms, treatment of compulsions & obsessions

Don't fob me off. You are the type of person who 'deals' with OCD. You do not harness, you destroy.

 

[rawrschach]

Mighty insightful figuring that out from a forum post.

And what exactly does your opinion of me have to do with the symptoms/chemical signature of both conditions?

You made a gross generalisation that OCD and depression do not occur together. I'm merely pointing out that it is you who is misinformed.

 

[Paul71]

Mighty insightful figuring that out from a forum post.

And what exactly does your opinion of me have to do with the symptoms/chemical signature of both conditions?

You made a gross generalisation that OCD and depression do not occur together. I'm merely pointing out that it is you who is misinformed.

I'm sorry, there must be a small medical chance that Livermore was OCD and depressed (in your favour), but you are wrong, an OCD would never go bust, he/she would never undertake trading activities in the first place.



Why would an OCD trade?



Trader Dante, may have the answer.

 

[rawrschach]

Depends what their obsession is, imo. Jesse was obsessive about understanding the market, and didn't mind losing his money to pay for the lessons. Which, for me, makes it entirely possible that he could blow out.

 

[Paul71]

Depends what their obsession is, imo. Jesse was obsessive about understanding the market, and didn't mind losing his money to pay for the lessons. Which, for me, makes it entirely possible that he could blow out.

He was a depressive, that is fact. Obsessive, ocd etc are just words/phrases based upon personal perspective/assumption, not professional medical opinion.

 

[trader_dante]

He was a depressive, that is fact. Obsessive, ocd etc are just words/phrases based upon personal perspective/assumption, not professional medical opinion.

I've been looking for the passage in his biography although I can't find it. Still, I remember reading that he had a form of OCD with regards to numbers.

Again, this is hinted at in Reminiscences.

This thread is not really about whether Livermore had OCD or depression, or whether he was a success or failure.

The whole point of this thread was to discuss Livermores key and try to "chart" some markets with it and see if it provides any information on future movements.

Was it a red herring? Did Livermore really use it?

Who, if anyone, knows?

I am simply trying to find out if it has any value.

My study of the key so far shows that it does.

 

[N Rothschild]

i think its safe to assume the guy was depressed seeing he killed himself!

 

[Trader333]

an OCD would never go bust, he/she would never undertake trading activities in the first place.

I am not sure why there is a view that OCD types would be unable to trade as I do know one medically diagnosed OCD who is a very good trader. In fact his Reward to Risk ratio is almost unbelievable and his approach to trading is unique in that I don't know anyone else who trades the way he does. Even more strange is that he has been able to teach a complete novice to trade the same way and make very good returns.


Paul

 

[nile_croc]

I'm an OCD depressive myself, and I love trading. OCD people are very good at following rules, and that's exactly what you need to be able to do to be a good trader.