This is a very important lesson to learn from Jesse Livermore , these same patterns were present among gamblers , from 4500 years ago in the mahabharata. Traders have emotions and emotions dictate their trades .Jesse livermore was an example.He was a gambler , suffered depression (a mental illness) and commited suicide R I P Sir .I should not be writing about a soul who has passed away. He also died broke and depressed after numerous boom and bust cycles , this was mainly due to the inability to judge risk (human brain is a poor judge of risk , our judgement on risk is clouded by beliefs and emotions ) , his gambling mind got him in debt and he gambled more than he had , in fact at one time , he owed $1,0000,000.He proceeded to lose 90% of that 1907 fortune on a blown cotton trade. He violated many of his key rules; he listened to another person's advice (he preferred working alone) and added to a losing position. He continued losing money in the flat markets from 1908–1912. He was $1 million in debt and declared bankruptcy. https://en.wikipedia.org/wiki/Jesse_Lauriston_Livermore https://en.wikipedia.org/wiki/Mahabharata Gamblers/traders are overcome by emotions , and when traders are overcome by emotions ,they are out of control , they will bet everything they own .This will also happen to you as a trader. This happens becase we , as traders/gamblers are emotionally hijacked https://www.google.co.uk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=amygdala+hijack An Amygdala Hijack is an immediate and overwhelming emotional response out of proportion to the stimulus because it has triggered a more significant emotional threat. Theamygdala is the part of our brain that handles emotions. During an Amygdala Hijack, the amygdala "hijacks" or shuts down the neo-cortex. The gambler's emotions are present ,in all humans , and have been since we were created.They were present 4500 years ago .After betting his own brothers and losing , he bet his own wife on a game of dice. https://www.quora.com/What-right-di...his-brothers-and-Draupadi-in-the-game-of-dice https://www.google.co.uk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=depression mental illness In this scene , from the mahabharata ,see the consequences of betting everything ,after a few losses and losing everything , he bet his wife on the gambling table , the humiliation of a woman .THE PRINCE BET HIS OWN WIFE , after running out of cash , at a gambling table .Think of the consequences of gambling , how much pain it causes to those around you. If you have any value to add , to this subject , please do provide a professional discussion on this subject.
Livermore died with a networth value of 5 million. Broke again is relative. Trading was not the source of his problems. The wife he last married: her ex husband died from committing suicide. And she also had 2 others guys who fell into depressions when they hand out with her. What were the chances that the next one - Livermore- would fall into depression or commit suicide? Livermore downfall were from his choice of spouse, not trading, not money.
Read your own link: "At the time of his death (1940), Livermore's estate was valued at over $5 million." That was at least $50 million in 2016 money. You go one about Gambling and Amygdala Hijacks, but really when most traders have a sensible trading plan to follow then they rarely (if ever) go into full tilt/full retard gambling mode.
O K I was wrong on one point , but the main point is emotions and amyglada Hijacks .They can attack you at anytime , and all your trading plans go out of the window.Your rational brain is blocked and all your plans are out of the window. It happened to Livermore , it happens to kings and princes and it happens to traders . https://www.google.co.uk/webhp?sour...pv=2&ie=UTF-8#q=self+sabotage+traders+trading Most new traders are changing from system to system (TRADING PLAN TO TRADING PLAN) , there are 2500 systems on failures forum FF .A friend of mine does new trading plans every two weeks .
regarding betting his own wife: is there a set of films about that? This type of example seem to be a very "talking" example to get some people to see the non sense they are into.
Just choose whatever trading system on FF. If there is an EA attached that sends the signals, the better to make it easy. I'll get you someone to trade this system on a test live account. I bet this trader will be trading this "losing" system profitably. That good trader do: they take any trading system that is at least more of less ok, and they trade it profitably. Though you are talking nonsense about FF, I value your opinion on amygdalia hijacking: what did you do to handle this phenomena ( among many phenomena in trading psychology)? what solution did you find?
There are series of videoes on this Indian Epic , but in Hindi on youtube , there may be english subtitles. https://www.google.co.uk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=mahabharata I am just pointing out , why he bet his own wife.The next roll of dice will recover all the losses , I have to win so I will bet everything attitude. http://www.famousquotefrom.com/mark-douglas/ You don’t need to know what is going to happen next in order to make money. There is a random distribution between wins and losses for any given set of variables that define an edge.
Blames others , don't blame his wife or wives ,He was a gambler. In 1901, Livermore made money almost effortlessly, before losing it all trading cotton. 1908:Livermore had $5 million to his name and earned his moniker "boy plunger" — before losing it all trading cotton in the Chicago commodities market. In 1935, Dorothy Livermore shot their son Jesse Livermore Jr. while in the middle of a drunken spat. He left nearly no money to his children. Jesse Livermore Jr. later committed suicide. http://uk.businessinsider.com/the-l...-sherry-netherland-hotel-in-new-york-22222227
Best not to judge the reasons behind Livermore death as there is not enough information about the last 10 years of his life. We dont know how he lost the money he made in the 1929 crash. Did he lose it trading or in other business ventures? The 30s were a bad time all round. No one knows for sure what happened. But i dont think Livermore was a total gambler, he most definitely had an edge, he just didn't practice sound money management. eg. he talks endlessly about reading the tape to get an edge but he never mentions reducing bet size during a losing streak. He also talks about scaling into positions to reduce risk. great stuff. I think except for his very rough Money management he was doing almost everything right. But in trading you have to do everything right especially if you want to hold onto the majority of your profits.
Where were his plans before bankruptcies?What happened to the plans? Jesse Livermore’s Trading Lessons I believe that having the discipline to follow your rules is essential. Without specific, clear, and tested rules, speculators do not have any real chance of success. Why? Because speculators without a plan are like a general without a strategy, and therefore without an actionable battle plan. Speculators without a single clear plan can only act and react, act and react, to the slings and arrows of stock market misfortune, until they are defeated.