Trading Like Jesse Livermore
Jesse Livermore is often regarded as a legendary trader of the world. Often called "The Greatest Trader who ever lived". The story of his life is filled with success and decline. In this article we will learn about trading from the legendary Jesse Livermore. He is most famous today for being the object of the book “Reminiscences of a Stock Operator” by Edwin LeFevre.
The Life of Jesse Livermore
Jesse Livermore started his trading career at the age of fourteen. She ran away from home with her mother's blessing, rather than being forced to be a farmer by his father. He then began his career by recording stock prices at Paine Webber brokerage in Boston. It may be from this job that Jesse learns about reading stock price movements without realizing it.
In his younger days Jesse was known as the "Boy Plunger" because he looked younger than his age. He started his first trading on the Bucket Shop type broker. Bucket Shop broker let traders bet on stock prices, but no actual trades are executed. Bucket Shop will bail if we win, and gain profit if we lose. How great is Jesse? He is banned from one Bucket Shop to another Bucket Shop. It's like being banned from playing in a casino, because you beat the casino so badly. Jesse continued trading in stocks and commodities and became a millionaire many times. Unfortunately he also often bankrupt many times. He made his biggest profits when the stock market crashes in 1907 and 1929. It was said that JP Morgan himself sent a message asking Jesse to stop what he is doing (shorting shares). In 1929, he shocked the world by making the biggest profits in his trading career. He finally earned the nickname "The Great Bear of Wall Street".
He married his first wife, Netit (Nettie) Jordan from Indianapolis, at the age of 23 in 1900. Less than a year later, he went bankrupt for losing in stock market. He asked his wife to mortgage her jewelry collection. But his wife refused. Eventually they divorced in 1917. He then married twice more
After the big 1929 victory, he again lost a lot of trading capital. Somehow, Jesse did lose all the money from great victories of 1929. On 7 March 1934, a bankrupt Livermore was automatically suspended as a member of the Chicago Board of Trade.
On Thursday, November 28, 1940, Jesse Livermore entered Sherry Netherland Hotel. He sat near the bar. After an hour, Jesse Livermore gets up and goes in the cloakroom, sits alone on the bench, and then shoots himself in the head with an automatic Colt. Tragic.
Jesse Livermore's book: How To Trade Stock
In late 1939 Jesse Livermore wrote a book about his experience and techniques in trading on stock and commodity markets. This book is not selling well, probably because World War II was under way at the time.
What Can Be Learned From Jesse Livermore?
Jesse Livermore is a controversial world trader, but we can learn a lot from his experience.
1. Jesse Livermore admits to himself that sometimes he does not follow his own rules strictly. He claimed that his lack of discipline was the main reason he suffered losses after making great victories in 1907 and 1929. Discipline is the critical success factor in trading. We should be able to discipline ourself at any condition.
2. Jesse Livermore is not a good personal role model. In his book, Jesse Livermore is said to love women and this ultimately leads to a divorce. Her second marriage is also problematic. Does this cause an eventual depression and suicide? I believe that directly or indirectly trading activities will affect on personal life. Therefore, we should strictly separate the work (trading) and personal life.
3. Finally about Jesse Livermore's suicide. How could anyone still considered by many to be the greatest trader who ever lived could shoot himself? Being a trader is like a roller coaster ride. Easily we can get rich or otherwise go bust if not careful. We will never know our fate, but as bad as it is, do not be Jesse Livermore. Manage your trading and life with high discipline, so that our lives do not become vulnerable by unwanted problems.
Hope this article inspires