"Reminiscences of a Stock Operator" by Edwin Lefevre recounts the fabled trading life of Jesse Livermore who is widely regarded as belonging to the pantheon of great Wall Street traders. The book has had and continues to have a profound impact on my trading.
In this series, I will go through the book, page by page, and unpack the lessons Livermore offers. Where applicable, I will offer examples from my own trading experiences. I hope the effort reveals aspects of trading that help you move the ball in your own trading.
Let's start with this:
"The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, nor for the get-rich-quick adventurer. They will die poor." Jesse Livermore. "How to Trade in Stocks" paragraph 1 page 1
Upon a first reading of the above, I would venture to say that 98% of all readers would say "That's not me". They'd say I'm not stupid nor am I lazy. I possess good emotional balance and I am not looking for a get rich quick scheme. In short, "I'm good to go". Onto the next paragraph.
Juxtapose those thoughts with the fact that 90% of would- be traders fail. People's image of themselves and actions they take are often very different from one another. I include myself in that population. When I began my trading journey I wanted to parlay my nest egg into a fortune and the faster the better. I found that I was book smart but market stupid. I also wrestled with emotional demons as trades played out both for and against my position. I never imagined trading would be as hard as it has turned out to be. I believe many of you have had similar experiences. Additionally, deep down we crave and often seek a short cut. My in-box is filled on a daily basis with promises of the secret sauce. I know those ideas sell very well. They offer we traders a short cut. How many times do you secretly wish for a short cut? Take a hard look at it.
The answers to the above couldn't be more important. As Livermore points out, misguided traders die poor. Statistics tell us that the pile of dead trader bodies is quite large. What makes you think you will be one of the 10% that make it out alive?
Till next time, Happy Hunting and Good Trading