Jesse Livermore, the Cotton King is a bad trader? How many of us has cornered a market? The problem was that other areas of his life catch up on him.
Why is everyone defending him? The media has romantized his life, but the simple fact of the matter is that he was a horrible trader. He may have been a colorful, likeable man, but anyone that contiounsly blows up is not a good trader. He should have followed his own advice. Instead, he was way too emotional and impulsive.
A good trader does not let one's life problems influence their trading. You are all making my argument for me. He lost his fortune countless number of times because he didn't follow his own rules. That makes him a horrible trader.
sorry guys i may be new to trading but i think that i have a good idea of who i am as a person and i would have to say that as a trader JL was just TOO GREEDY at the wrong time during those times he blew up and as a person he was shallow and mean-spirited.
Even with my brief trading career, I see parallel circumstances in today's market vs. Jesse Livermore's era. His words of wisdom and tape reading techniques still applies. I would not comment on whether he is a good/bad trader, but I can improve as a trader from learning more about him.
Jesse Livermore didn't understand money management. That doesn't mean he wasn't a great trader, he was one of the greatest, if not the greatest! To say otherwise is ridiculous!
A common misperception is that livermore was broke when he blew his head off. He was not. In fact, he was worth at least several million dollars at the time. This was 75 years ago and let's not forget the guy started with something like 30 bucks that his mother gave him b/f he ran away. He had no family support, no safety net and managed to earn infinite returns and a fortune from the start to finish of his trading career. I wonder how many others could have accomplished that? Yes, he took his account to zero a few times and he learned from it. He set up a trust for his kids, which he was unable to touch, for any reason and he had a couple million dollars in cash in his manhattan condo when he died.
Livermore had lot of problems in his personal life. His wives were major problems and his kids were another. The reason he committed suicide was related to that as much as his loss. The Reminiscence Of Stock Operator was written much earlier before all his trouble started. As to Market Wizard book many of the Wizards have had several ups and downs in their career subsequent to the books. One of the often quoted Market Wizard has also had to declare personal bankruptcy.
I have some of Jesse Livermore's trading rules posted close to my trading monitors so I can see it everyday: "Trade what you see, not what you think." "Put the odds in your favor." "Play both sides of the market." "Don't average down." "You should not be in the market all the time." "Trade the leading stocks in the leading sectors, which can change in every market." "Profits take care of themselves but losses never do." He is obviously a trend-follower. But it seems, as evidenced by his climactic financial reversals, he was not following his own rules!
Most of Livermore's trading advice is timeless, but his style seems to have been coattailing the pools. Livermore leaves some very clear instructions on playing ramped stocks. Livermore seemed to have lost the ability to make real money around 1934 onwards i.e. after the SEC act put an end to stock ramping by the pools. The fact that he could not make money for periods of 3 years or more in his career suggests he, like the pools, needed for the public to be in the market.