famous traders This is a topic that many people are looking for. newyorkcityvoices.org is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, newyorkcityvoices.org would like to introduce to you LEGENDS OF TRADING: THE STORY OF JESSE LIVERMORE. Following along are instructions in the video below:
“You were to ask professional traders to nname the people that have influenced their development development in trading. You will find very nfew. People cited more often than jesse livermore. Is largely thanks to the part.
Biographical n. Part fictional account of livermore s life. In the famous book reminiscences of a stock noperator. Which is usually top of the list of most useful and influential trading books nof all time.
However what s so fascinating about jesse nlivermore. And what makes him such an amazing person for traders to learn about is the npolarity of his successes on one hand. You have someone that has scaled nthe absolute heights of success in the market someone that we can use as an example of what nyou can achieve if you work hard to truly understand the skill of trading and how the nmarkets function. But on the other hand within the same person s nstory you also have clear examples of the pitfalls of trading and how disastrously wrong nthings can go if you don t remain cautious about the markets.
And if you allow complacency nto creep into your trading. Despite livermore trading. A century ago his napproach to a large. Extent is still absolutely relevant today.
His approach to trading in nmany ways was ahead of its time and his wisdom and observations in many cases are timeless this is his story jesse livermore was born on 26th july 1877 nin massachusetts. His father was a farmer and his mother was a homemaker njesse learned to read and write by the time. He was just 3. And a half years old and by nthe age of 5.
He was already reading through financial newspapers nhe. Attended grammar school and unsurprisingly was very good with numbers particularly mental narithmetic in fact while at school. He claims that he completed 3 years worth of arithmetic nin. Just 1 year at the age of 14 under his father s insistence nhe left school and finished his education.
His father who had also dropped out of school nat. 14. To become a farmer. Wanted jesse to join him and devote his life to farming nhowever jesse was devastated by this idea he wanted to continue with his love of numbers nand arithmetic and to carve out his own path in life ndue to this burning desire his mother agreed to help jesse to run away from home.
And to nkeep. It a secret from his father. She sent him packing with just 5 in his pocket nwhich would be roughly equivalent to over 100 in terms of today s money. Jesse got his first job as a chalk boy for na brokerage firm called paine webber whilst.
He was still just 14 years old nhe had been in the firm looking around and because one of the boys was off sick. He was nasked..
If he could step in he was soon given a permanent position nthis was an ideal job for him because of his love of numbers prices would come through nthe ticker tape and be called out and then he would write them all on the chalk board nfor. The customers to be able to see. While he was working at this job. He became nso fascinated with the way that prices moved that he started keeping a little notebook nsince.
He could clearly remember all. The numbers and prices at the end of the day. He would nwrite these out in his notebook and observe the patterns in the way that they moved. He nkept.
This as his own little hobby or project. Outside of his work as a chalk boy up until this point livermore hadn t done nany trading as he believed that you needed to have a lot of money to be able to participate nhowever. It was whilst working as a chalk boy that he was first introduced to bucket nshops. The bucket shops were almost like betting nshops.
Where you could back a particular stock based on whether it was going to go up or ndown without actually needing to invest in the underlying asset you could do this with nlow amounts of money and on very thin margin. And the bucket shop would be taking the other nside of your bet. Livermore decided this would be a good opportunity nto test out his work and to see if his theories about prices actually would work out in the nmarket. He would check his notebook where he had been nrecording figures and patterns in the movement of prices.
And then decide which trades to nplay on jesse started using his system to play at nthe bucket shops on his lunch hour and the first profit. He ever made was just over 3 ndollars. However it wasn t long before he was making more than he was in his day job nso. He decided to quit this to focus more on his hobby full time.
At 15 years old jesse nhad made 1000 from trading at the bucket. Shops which is roughly the equivalent to. N 25000. In terms of today s money.
Jesse continued to do well against the bucket nshops by following his own system and one by one the bucket shops began to ban him because nof the amount of money that he was earning at their expense nhe. Would even have to resort to using a disguise. So that he could carry on trading. But word ndid get around and eventually everyone at the bucket shops.
Knew who he was anyway neventually. He was banned from the majority of the bucket shops in his town by the age of 20 livermore had accumulated nhis first 10000. However this reduced massively by the age of 21 to 2500 nhe. Says that if he stuck with his system.
He would make more profits than losses as nhis system would usually win around 70 of the time. However most of his losses came nunnecessarily when he would not stick with his own system..
A problem that a lot of traders nhave to overcome at some point in their career at the age of 21. Having been banned from nmost of the bucket shops in boston. Jesse. Took his 2500 and decided to move to new nyork to start trading legitimately at the new york stock exchange in new york.
It wasn t long before jesse gained na reputation for being a winning trader. But soon after he lost his money once again. Nit seemed his winning formula was only designed for winning at bucket shops and not for the nreal stock exchange he went to st louis to go back to betting nat bucket shops and to increase his money again this was a new town for him with new nbucket shops. So he thought they wouldn t know who he was nbut.
He did eventually get recognised again and again. He was banned from the shops. Instead nhis solution was to send in people on his behalf. He managed to actually make enough nmoney by doing this to be able to go back to trading in new york.
Although he had already started to make a nname for himself around trading circles livermore first became famous for his trading during nthe panic of 1907. It was during this time that he managed to earn 1 million in one nday. He made his money by shorting. The market as nit crashed by the end of the crash.
He was worth 3million nat. This point. He knew the market was in a bad way and that it was possible for it to nmove even more negatively. He had already decided therefore that he would do what he ncould to avoid a deeper crisis when he received a request from the financier jp morgan.
Who nwas putting together a plan to try to bring the market back to health nlivermore. Looked up to jp morgan. So he was more than happy to help he began buying as nmany stocks as he could which also led other people to taking the same action. Thanks to nthis the market started to recover and many people that followed livermore s lead also nmade a lot of money as a result of this in some circles livermore was branded a hero nbut of course.
He himself had also acquired a new level of wealth. Which meant he could nlive in luxury. Enjoying things such as yachts and becoming part of the elite going out nto. The most exclusive clubs and enjoying life in the city as a young rich bachelor nto keep up with his new expensive lifestyle.
He turned back to trading. There are certain aspects of jesse livermore s ntrading approach that have been well documented one of the main things was his desire to work ncompletely on his own. However in 1908. He broke his own rule of nnot taking advice from other people he trusted a tip from a famous cotton trader nthe cotton trader told livermore to keep buying cotton which livermore did against his own ninstincts.
But at the same time as this the trader as well as others were actually selling in nthe market leading the price to move heavily against livermore nas. A result of this he lost 90 of everything that he had earned during the 1907 crash nthroughout the following years livermore s losses grew deeper and deeper until finally nhe ended up with a debt of 1 million and had to declare bankruptcy by 1915..
Without a stake to be able to begin trading again. He had to ask for some help he was noffered a trading facility of just 500 shares to get started again. But livermore knew he nhad to play this one perfectly so he spent 6 weeks just tape reading in the markets. Before nfinally making his move.
The result of this trade was a success and nhe finally had a stake to be able to begin trading properly with again nunsurprisingly given. The rollercoaster ride that was livermore s trading career over nthe next. Couple of years livermore managed to earn his fortune back again. And pay off nhis debts newspapers from 1917.
Report. Headlines. Such nas boy. Plunger scores comeback in operations on wall street.
And spoke of the shrewd nyoung speculator. Who made and lost millions in the stock market and then came back and nmade more millions in 1922. Jesse livermore. Took part in a series nof interviews with edwin lefevre for a series of articles.
These interviews eventually led nto lefevre to writing the book of a stock operator. The book is a ficticious biography of livermore nand details his ups and downs in life and in investments. It s thought that the book ncould actually be the true story of livermore s life based on the interviews. But some also nthink it could be completely made up the book became very popular and is still one nof the most popular investment books to this day.
It was shortly after this that livermore decided to move to a new office to have more secrecy nwith his trading and to be even more removed from wall street livermore began noticing certain patterns noccurring in the market leading up to 1929. These were similar patterns to those that nhe observed in the build up to the crash of 1907 feeling confident about the hunch. He had he began opening short trades in anticipation. Nat.
One point. He was even living in his office. Just so he could keep placing trades in the nlead up to what he expected to be a huge negative movement of course. The boy plunger livermore was correct.
And he enjoyed the most successful period. Nof trading of his entire life by the end of the. Crash livermore was. Worth naround 100.
Million which is over 14. Billion in terms of today s money..
Most people had nlost their money during the crash. Which was known as black tuesday after making it to 100 million after the ncrash of 1929 livermore started to lose that fortune rapidly nno one knows the true reasons why or how livermore lost this fortune as it has never been disclosed. Nthere have only ever been speculations during this time things were extremely unsettled nin livermore s private life. This included getting a divorce from his second.
Wife. Who also went on to shoot his son at a later point in time livermore had spent time in vienna and met his third wife. Harriet metz. Whose last husband nhad committed suicide livermore s children didn t like to be around her since they felt ndarkness from her and knew that she didn t want them around in fact they even went nas far as to call her the bitch witch.
Eventually livermore had to declare bankruptcy nagain. This was his 3rd time. Although he was bankrupt. He still believed nhe could make a comeback as he had done so many times before but after all the pressure nand emotional strain of everything that had happened in work and in his personal life.
Nit was too much to take and he wasn t able to do it another contributing factor to not being able to start again on wall street was that he now relied on his wife s money and he had got comfortable. He didn t have the same ndrive or passion as he did in his former days on november 28th 1940 livermore was found ndead in the cloakroom of the sherry netherland hotel in manhattan aged 63. He had tragically nshot himself it s clear that the story of jesse livermore nis. One of a highly skilled trader who understood price activity and how to operate successfully nin the markets.
This led to some fantastic successes which we can all learn from as ninvestors and as traders. However his downfall in trading was also ndue to problems that many traders struggle with he wasn t able to avoid being influenced nby his private life. And he struggled to stick with his trading rules and system. Which would nhave helped him to avoid many many losses now many of these rules are still useful today nthey can help us to try to avoid some of the losses.
Livermore made while hopefully. Helping nus to move closer to enjoying some of the success in the markets. He did so here are nsome of the rules that you can follow and you ll also find some books in the description nbox for this video that do a good job of detailing livermore s trading approach and life so nwe would definitely recommend checking some of those out i hope you enjoyed this video as much as we nenjoyed putting. It together.
Jesse livermore is a true trading icon and inspiration in nmany ways. If you enjoyed the video. Please do hit the thumbs up button to let us know ndon t forget to subscribe to the channel for more videos about trading. The rest of the ntrading legends videos are linked below.
In a playlist. So go ahead and check those out nbut before you watch those please leave a comment below letting us know what your favourite nbit is about the jesse livermore story. ” ..
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