T2W Bot
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This is a forum thread for discussing the Knowledge Lab Article, "Nuggets of Wisdom from Jesse Livermore, Greatest Trader Ever".
Nuggets of Wisdom from Jesse Livermore, Greatest Trader Ever
Rhody Trader
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Legendary trader Jesse Livermore provided a number of very valuable lessons still applicable in modern trading. This short article discusses some of them.
TraderPattern
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Excellent article. Thank you.
Perhaps most of the T2W membership should read this article and remind themselves of simple but vital trading points.
Every day on the T2W threads you can read posts from members who are failing to follow these simple rules. Some know no better (I was one) others do but persist because they think they know better even after having had their fingers burned.
Please excuse me if this reads as a 'holier than thou' post it is not intended to be.
Regards
bracke the unholy
Every day on the T2W threads you can read posts from members who are failing to follow these simple rules. Some know no better (I was one) others do but persist because they think they know better even after having had their fingers burned.
Please excuse me if this reads as a 'holier than thou' post it is not intended to be.
Regards
bracke the unholy
FRENCHPARK8
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Good article - worth printing off & sticking it near to your monitor !!
Excellent summary.
I like the fact that he first started trading in 'bucket shops' (the modern day equivalent being Spread Betting companies). When he moved to the 'real market' he had problems because the bucket shops had an automatic stop on each position whereas the 'real market' didn't.
I like the fact that he first started trading in 'bucket shops' (the modern day equivalent being Spread Betting companies). When he moved to the 'real market' he had problems because the bucket shops had an automatic stop on each position whereas the 'real market' didn't.
Simon Gordon
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I agree with the author's thought that Jesse is not the Greatest trader.
I would pick Soros - 35% annual compound growth rate in the Quantum Fund between 1969 and 1995 with dividends reinvested. Turning $1,000 into $2,1500,000.
Soros has left us much intellectual data to digest, is a great philanthropist and most importantly is a consistent winner.
I would pick Soros - 35% annual compound growth rate in the Quantum Fund between 1969 and 1995 with dividends reinvested. Turning $1,000 into $2,1500,000.
Soros has left us much intellectual data to digest, is a great philanthropist and most importantly is a consistent winner.
In the latter chapters of the stock operator book is my favorite arty speculative teaching that I assume is from livermore.
He paints a picture of "people in the know" buying shares in thier out of favour company when they come to know or see improving conditions. Something like when conditions start to favour a sold off company and the company inseders dont call in the press - at those moments "thier silence is golden"
And at the other end (tops) he paints the picture that company insiders will be selling out while banging the media drum with sentiments of "we forsee the current sales and good trading contions continuing" - this they do when they seen the recent bull story starting to fail.
I relate this behaviour to Justin, Mamis cycle or rising price risk with reducing information risks.
Are there experienced people here who are familiar with these ideas and have a working knowledge of these kind of opportunities that I can talk with to test my deductions of similar senarios?
For the first time on the buy side I think I am seeing such an opportunity in a cancer stock on Nasdaq.
But I want to test my deductions and observations with experienced speculators without being seen to be ramping the stock?
sp1
He paints a picture of "people in the know" buying shares in thier out of favour company when they come to know or see improving conditions. Something like when conditions start to favour a sold off company and the company inseders dont call in the press - at those moments "thier silence is golden"
And at the other end (tops) he paints the picture that company insiders will be selling out while banging the media drum with sentiments of "we forsee the current sales and good trading contions continuing" - this they do when they seen the recent bull story starting to fail.
I relate this behaviour to Justin, Mamis cycle or rising price risk with reducing information risks.
Are there experienced people here who are familiar with these ideas and have a working knowledge of these kind of opportunities that I can talk with to test my deductions of similar senarios?
For the first time on the buy side I think I am seeing such an opportunity in a cancer stock on Nasdaq.
But I want to test my deductions and observations with experienced speculators without being seen to be ramping the stock?
sp1
fudgestain
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Obviously, there is good fundamental stuff in the summary above. But you have to update to todays technology.
I only back certainties a la Gordon Gekko. You need to do this each day. The money is in the major daily gyrations (ie Dow index) .. not the trend.
Trend as you can see on any thread is about endless dummies stumbling around looking for some target number or point or level from day to day or week to week. There is usually 50 points to scoop out per day which you can hit with weight and you can take 80+ point type collects on numerous days. So waiting for a trend is avoiding trading and avoiding the only worthwhile purpose which is to clean up the market as a routine.
Also most so-called traders don't have trading capabilities.
Of course you do need a very accurate predictive numerical model in place. I imagine there aren't any individual traders who have one; it doesn't require maths or any programming wizardry. It takes about 2 years intense research and testing. Its a problem solving assignment. So yes Livermore is right when he says it is a full time preoccupation.
I only back certainties a la Gordon Gekko. You need to do this each day. The money is in the major daily gyrations (ie Dow index) .. not the trend.
Trend as you can see on any thread is about endless dummies stumbling around looking for some target number or point or level from day to day or week to week. There is usually 50 points to scoop out per day which you can hit with weight and you can take 80+ point type collects on numerous days. So waiting for a trend is avoiding trading and avoiding the only worthwhile purpose which is to clean up the market as a routine.
Also most so-called traders don't have trading capabilities.
Of course you do need a very accurate predictive numerical model in place. I imagine there aren't any individual traders who have one; it doesn't require maths or any programming wizardry. It takes about 2 years intense research and testing. Its a problem solving assignment. So yes Livermore is right when he says it is a full time preoccupation.
I loved the article. But I think it is obsolete to risk 10% of one's capital on any single venture. That may have been appropriate in the early 20th century, when information flowed more slowly. But now there are more opportunities, and faster trading cycles. I don't think an individual should risk more than 2 - 5% of his capital on any single contract, at least not in the futures field. Money management is as important as finding trends.
Livermore...liverless. Stop looking towards other people for help...it does not work in this business. Trying to emulate, trying to copy and the rest leads to failure. What livermore did and said about the markets is bloody obvious to an infant. Livermore could see the obvious, there is an obviousness about the markets, the markets involve people and money. Market money? If you don't follow market money then what are you doing? Never think you are more clever than the majority. RUDEBOY.
Newbies, the markets are not a competition or tournament. You need to adapt and overcome. In some respects it is a never ending experiment. Don't worry about what stage you are at, think about market stage, what can the market offer you at the moment. Experience! If you don't learn from your own experience, you will never learn! RUDEBOY.
fudgestain said:
Isn't that a bit of a sweeping generalisation? We all trade with the trend on our chosen time frame. If you sell short you want a down trend and if you buy long you want an up trend. What other way is there to trade?
It's perfectly feasible for one person to buy long into the XYZ weekly uptrend and another to sell short into the XYZ daily down trend. One is not better than the other.
Trend is certainly not for 'endless dummies' and neither do they necessarily 'stumble around'.
Even if you're talking about what we might strictly classify as 'Trend Trading' (i.e taking the middle bit of a trend), it's a method of trading that has proven to be lucrative for some and it is as valid as any other method of trading.
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