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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: gaj who wrote (7273)	3/11/2000 6:15:00 PM
From: Threei	Read Replies (1) \| Respond to of 18137

My general understanding of Livermore's life is mostly from another book... "Amazing life and times of Jesse Livermore"... Mostly I have the same impression as you, except one thing: what did him in, in my estimation, was the same thing that helped him before; not being able to admit he was wrong... I would rather think, this was the reason of his second failure, on cotton deal. First one was caused by little experience, last one was not trading-related at all. he apparently was not stable person, having deep depressions and black periods... which IMHO doesn't change the fact that he was great trader and plenty of his observations in the tape reading and human behaviour field are still valid. Vadym

To: gaj who wrote (7273)	3/12/2000 1:04:00 AM
From: ahhaha	Respond to of 18137

Not quite, but you're close. It was the accumulation of experience that enables one to do well that bagged him. There are times when you just can't be involved. Livermore knew this and regularly took vacations to Florida, but decades of success and an apparent terrific opportunity to hit the big money caused him to go back in when it wasn't warranted. It isn't possible to know when it is or isn't warranted. This is always the case and it boils down to the fact that every trade has 0 expectation. It's a coin toss hostage to the drift of the trend which is non-stationary. The lack of stationarity comes because the holding period is broken by trading. You have to hold, engage risk, to make money. All traders are losers sooner or later and Livermore was sine qua non in that category. He could admit he was wrong. The a priori expectation on such admittance is still 0. It doesn't matter whether you admit you're wrong or not. Such admittance is not an effective decision procedure. There are no effective decision procedures for trading. You have to hold and you have to guess right on fundamentals to succeed on balance. Livermore knew this too, but in the final analysis it was his ability coupled with what made him great in the first place that nailed him: margin.