Reminiscences of a Stock Operator ~ Discussing the detail.

[Crap Buddist]

Heres a thread that I thought i'd start a week or so ago to enable us to "get inside the animals" so to speak of a noted speculator , and discuss some of the points ,concepts and trading philosophy raised in that text. So we become an animal and hunt like / with them.

I think its a great book with some very sage advice and subtle quotes slipped in that may help assist traders to be guided along with very sound principles of how to approach speculation. If they are lost or straying or just confused with the chaos.


I was reading the other night from the book and came to this point in the book that old Jesse insists on , which is also mentioned in another thread as seen below.

Why cant you buy high and sell even higher ?




Paul

Now ol Jesse says he always likes to buy high and sell higher, but what about the buy low and sell high concept ? hmm I just think that buying high is paying a premium or to me suggests a late entry, or an inferior entry price or a higher risk assumed because of the price paid.

But if a persons size means, then well, we are gonna have to pay higher to get fully in then I can understand it, but that isnt jesses main reason for this approach I think. Rather he see the stock trade in the direction of his call . seems like hes trading breakouts ? well, hold on jesse i think when breakouts come along.

A little example he wants to long 60, so will buy 60, 61,62,63 .

What I would of thought to of seen from Jesse was that he would of been paying higher but on a lower, but he doesnt seem to play it this way , which is where I disagree with it.

Anyway, that point is a point in that book that im not happy with ..... can we split this one open? , however also looking at how prices can form ,say holding under 60 a series of bars ,then sometimes you know you wont get a lower price so its 60 or you aint in. But as a general rule, I dont like it for reasons given above.

Any thoughts on this buy high and sell higher, please.

What I'm saying is if I was touting this book as a help to a person, so far I'd say excellent ,only that buy high sell higher concept, scratch that.

Any thoughts on this buy high and sell higher, please. The next re-print of the book needs an update or does it? What do others , who have read this book, think about Jesses approach on this point and its use in todays arena of speculation?

 

[Crap Buddist]

Enter Mr Partridge.

The next god given whisper from the book I want to put "out there" on here, is this....

"You do know this is a bull market".

Just sit with that for a week or two.

 

[Lightning McQueen]

A good thought for a thread CB

For those that haven't read Reminiscences of a Stock Operator here's a time line of Jesse's achievements. just to get a measure of the man.

http://www.jesse-livermore.com/jesse-livermore-timeline.html

I confess to not having read it myself properly, only a quick skim. Has anyone read How to Trade in Stocks and is it any good?

 

[Crap Buddist]

A good thought for a thread CB


I confess to not having read it myself properly, only a quick skim. Has anyone read How to Trade in Stocks and is it any good?

Well I think it may benefit some if not all. Some of the quotes may just seem like quotes with no real depth of meaning until you know it, or gain understanding from your own endeavours and experience from trading. Many of the concepts (speculation ) applies to all markets, not just stocks, for those who dont know it or are just starting off. Even ol Jesse , preferred commodities, he said.

Second read for me and I didnt even remember who that Deacon chap was when Socrates mentioned him in the Vanilla options thread, i thought he was a trade2win member , LOL. (muppet)

Anyway I think that may of subtlely initiated me to winkle out the book for bedtime reading, upon which the book is thumping home and re-enforcing or underlining many truisms . But I recognise with my own experience ,this knowing of truisms has come after extended experience, and ive attached a poll to see or enquire whether its a book that can kickstart further a traders growth or whether most people have to grow first to then be able to align with common or similar mindset of approach. But maybe the book, once read ,subtlely sits in your background and brings clarity that bit sooner. :?:

Poll attached.

 

[Pat494]

Interesting points but if you reckon the market is going still higher one shouldn't be afraid to jump in. Often in the past I have thought of going say long , found the market to be up maybe 50 points and backed off only for the market to go even higher.
You gotta know when to jump off the sinking ship ( long before the rest of the r*ts) to make this philosophy work. Jesse I seem to remember kept getting caught, lost 3 fortunes and died broke ( suicide ).

 

[Splitlink]

Well I think it may benefit some if not all. Some of the quotes may just seem like quotes with no real depth of meaning until you know it, or gain understanding from your own endeavours and experience from trading. Many of the concepts (speculation ) applies to all markets, not just stocks, for those who dont know it or are just starting off. Even ol Jesse , preferred commodities, he said.

Second read for me and I didnt even remember who that Deacon chap was when Socrates mentioned him in the Vanilla options thread, i thought he was a trade2win member , LOL. (muppet)

Anyway I think that may of subtlely initiated me to winkle out the book for bedtime reading, upon which the book is thumping home and re-enforcing or underlining many truisms . But I recognise with my own experience ,this knowing of truisms has come after extended experience, and ive attached a poll to see or enquire whether its a book that can kickstart further a traders growth or whether most people have to grow first to then be able to align with common or similar mindset of approach. But maybe the book, once read ,subtlely sits in your background and brings clarity that bit sooner. :?:

Poll attached.

It must be twelve years since I bought this book and, once read, it has been standing on my bookshelf ever since, along with a lot of other trading books that I have read over the years.

So, I have dragged it out and it is on my desk, near the computer, to be read again and referred to whenever this thread
requires it.

Good luck to the thread, I hope it gets a lot of visits.

Split

 

[newstart]

I read the book after being wiped out of the market and through reading the book found the reasons for my being wiped out. I don't make those mistakes anymore. Thank you Jesse Livermore.
And it is also the reason for my member name.

 

[Lightning McQueen]

I read the book after being wiped out of the market and through reading the book found the reasons for my being wiped out. I don't make those mistakes anymore. Thank you Jesse Livermore.
And it is also the reason for my member name.

Hi newstart

Sorry to hear that you got wiped out previously, good luck wth your new start.

As a learner I would like to ask whether you would have been able to recognise those mistakes if you had read the book before you were wiped out. I ask this as a sort of prod to answer Crap Buddist's previous post 4 on recognising these things from books after the experience, a very interesting area.

Thanks

don

 

[newstart]

Oh most difinitely and a lot of what happened is in the book listed as mistakes that he made and got wiped out the market takes no prisoners.

 

[chestney]

Hi newstart

Sorry to hear that you got wiped out previously, good luck wth your new start.

As a learner I would like to ask whether you would have been able to recognise those mistakes if you had read the book before you were wiped out. I ask this as a sort of prod to answer Crap Buddist's previous post 4 on recognising these things from books after the experience, a very interesting area.

Thanks

don

I know this wasn't asked of me, so if I am intruding, I apologise.

I have read this book at least 4 times.

Each time something else pops out from the pages, something that wasn't seen before.

This possibly has something to do with the evolution of a trader.

Whilst MHO this is a good book in it's own right, something a non trader could enjoy.

It's real value comes from several readings.

Which reminds me, having just moved house, I must find it again.

Thanks for the prompt.

 

[darshybaby]

Hey all...

Just wanted to say...if anyone who has not read this...it is available free online:

http://www.mypivots.com/articles/booktext.aspx?bookname=Reminiscences of a Stock Operator

 

[newstart]

Chestney Hi
You are so right about learning some thing I would recomend this book as a reference and a teaching aide to anyone speculating on the Markets

 

[PKFFW]

I have read it only once. I thoroughly enjoyed it.

From my experience, I must say, that I think much in the book really only sinks in once one has the experiencial framework to benefit from the wisdom within the book. I still find myself thinking back on bits of the book with a feeling of "so that's what he meant!". This deeper understanding of the concepts within the book hits me once I have experienced for myself what the book was trying to explain.

Having said that, there is much in the book that one can take away and implement immediately as well. Many "rookie" mistakes could be avoided if one were to read the book and really digest its meaning and apply what is written within it.

Cheers,
PKFFW

 

[Crap Buddist]

Interesting points but if you reckon the market is going still higher one shouldn't be afraid to jump in. Often in the past I have thought of going say long , found the market to be up maybe 50 points and backed off only for the market to go even higher.
You gotta know when to jump off the sinking ship ( long before the rest of the r*ts) to make this philosophy work. Jesse I seem to remember kept getting caught, lost 3 fortunes and died broke ( suicide ).

"You do know this is a bull market " no doubt Mr partridge would of responded with that when approached with a query as to whether the trader who was asking should take a long.

 

[Splitlink]

His first experiences with the bucket shops interested me. The margins that were imposed were so close as to be a sure way to lose money. The share had to go in the trader's favour from the start, leaving no room for error. I don't think that I could have handled that .

Only his expertise with tape reading and mental arithmatic put him above the rest.

Split

 

[Crap Buddist]

His first experiences with the bucket shops interested me. The margins that were imposed were so close as to be a sure way to lose money. The share had to go in the trader's favour from the start, leaving no room for error. I don't think that I could have handled that .

Only his expertise with tape reading and mental arithmatic put him above the rest.

Split

hmm yes, and today I think you can still get 200 - 400-1 leverage at some places? and theres plenty of talk based on my SB companies price spike out my stop or they refused to take my order to deal ? "Your kind aint wanted ,here. " Even back then and today seems the attitudes are still very real & present.

 

[Splitlink]

hmm yes, and today I think you can still get 200 - 400-1 leverage at some places? and theres plenty of talk based on my SB companies price spike out my stop or they refused to take my order to deal ? "Your kind aint wanted ,here. " Even back then and today seems the attitudes are still very real & present.

Maybe I don't quite understand their margin levels. It seems to me that for the trader, or better, the margin was the same as a stop and spread.. As soon as it was hit, you were out. SB cos aren't as bad as that, surely?. He mentions that if the margin was hit you could throw the slip away.

No, it's not the same with SB's! Although, some might say it's worse because, when the price goes against you the losses keep on growing if there is no stop.

 

[Crap Buddist]

Maybe I don't quite understand their margin levels. It seems to me that for the trader, or better, the margin was the same as a stop and spread.. As soon as it was hit, you were out. SB cos aren't as bad as that, surely?. He mentions that if the margin was hit you could throw the slip away.

No, it's not the same with SB's! Although, some might say it's worse because, when the price goes against you the losses keep on growing if there is no stop.

I think, well what I read into it, is undercapitalisation and high leverage and novice traders all with those conditions even today, the bookies I think mostly know the markets gonna test with a draw against a punter position, and im sure the bookies would love the fact that a lot will move their stops down, keep on moving them and then bang. their idea of an original small stop of say 20 points has been closed out at 150 or 200 .

They love them customers, because they are NOT professional losers .

The bookies dont need to be that bad because they know the numbers of novices stacked up are that bad(read new,learning,eager,hasty,unguided,self guided etc.etc), bad and just unknowledgeable. Now what if we had punters who new a bit more and wanted to close their trade out in a jiffy with a nice swift doubling of money in no time?

A Few stories of what happens to those types on these boards, taking advantage of a bucketshops lag.

Jesse knew if he wanted to make some serious money then he needed to change something .

 

[ScotchHarry]

Livermore's career reads like someone who was just taking shots in the dark and was lucky enough to get it right half the time. Surely the truly great traders make a fortune, keep it and add to it, not make it and lose it 3 or 4 times.

 

[PaddyMcTaff]

Now ol Jesse says he always likes to buy high and sell higher, but what about the buy low and sell high concept ? hmm I just think that buying high is paying a premium or to me suggests a late entry, or an inferior entry price or a higher risk assumed because of the price paid. ?

Personally I really like the buy high approach because it means that the stock/commodity or whatever is already strong and heading in the right direction from the start of the trade. William O'Neill is another strong advocate of this philosophy and his CANSLIM method strongly advises only buying when a stock is making new highs. Seems to have worked for him too..