One of the stock market classics that should be on every speculator’s bookshelf is Edwin Lefevre’s Reminiscences of a Stock Operator. Written in 1923, you may assume its contents have scant application to the more sophisticated traders of today. That assumption could not be farther from the truth, for while technology may change and access to information may level the playing field in many respects, human nature hasn’t changed, especially when it comes to managing risk and the uncertainty associated with it.
While I could list many pertinent Lefevre quotes here, one that affects all of us in one way or another is the following.
TWO DEEP-SEATED INSTINCTS
you cannot relate to the above, it may be because you have not been in the trading game long enough. If you do survive the learning curve with enough money to continue on it will be because you are able to win the battles that play out in the mind. These are battles we all will face every single trading day because they originate from deep seated instincts that are part of our nature. In other words, we were born with them… and we will die with them. Therefore, we must learn how to manage them or they will manage us. The former can lead to success; the latter to possible ruin.
The trading game is the same as it ever was.