Jesse Livermore Tried To Tell Me

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I was in a meeting almost all day today, and started to bleed out of my eyes, it was so bad. Thankfully, I had my trusty Palm, so I decided to read “Reminiscences of a Stock Operator” again. I was thinking about it after the discussion at Ugly’s. In my reading, I came across this passage that spoke directly to my “action” trading yesterday:

I was twenty when I made my first ten thousand, and I lost that. But I knew how and why, because I traded out of season all the time; because when I couldn’t play according to my system, which was based on study and experience, I went in and gambled. I hoped to win, instead of knowing that I ought to win on form.

That’s exactly what I did yesterday. That kind of sloppiness removes any edge you have as a trader, and puts you squarely in the class of blind gamblers. Might as well play powerball. My ego likes to tell me that I’m an experienced trader–even without a defined setup, I’m smart enough to play the movements. Ego is deadly to a trader. The only thing that is worthwhile in trading is fact. Bravado, things that “should” happen, hope, none of these have any place in the business of a successful trader. I read this before in “Reminiscences”, but it didn’t mean anything to me then. I think it’s valuable to re-read the classics from time to time because you’ll learn more as you progress as a trader.

Thanks, Jesse, I owe you one.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com