I’ve just finnished reading a book of Richard Smitten “Jesse Livermore World’s Greatest Stock Trader”. Amazing read. For those who want to know how important psycholigal influence on trading, this is a book to read. I’d like to say a few things about greatest trader. He failed in the market when he started going to other women, he stopped being focused on the market, his 3-d wife (who brought him 2 beautiful boys Jesse Jr and Paul) Dorothy was his soul companion as later his son Jesse Jr will say. Jesse Livermore made 100 millions during October 1929 crash, at that time he was one of the richest men in the world, in 1932 his wife filed for divorce and took away their 2 boys from him, he was empty, depressed, sitting on his cash, understanding that he’s life is actually a failure(its why he later commited a suicide). Its when he started losing it all. No one knows his trades after 1932, but the majority were losses and then he finally filed bankruptsy. He still had 1 million untouchable fun for his kids and about 3 million dollars in cash(in his apartment in New York), his 4-th wife took it 3 million in cash in the bags out of house after he commited suicide( his son Paul tells about it). (more…)
Archives of “reading a book” tag
rssBook Review : The Disciplined Trader by Mark Douglas
This is one heck of a slow read. Douglas dangles a carrot in front of you each chapter saying ” I will show you how to do this”; but never actually does! I thought there was quite a bit of carry over between this book and “Trading in the Zone”, so by one or the other but on the whole I would say Trading in the Zone would be the one to plump for as there are more trading references. In The Disciplined Trader Douglas does go off on a tangent for many pages and you wonder whether you are reading a book on amateur psychology.
The first 5 Chapters read well with some nice takeaways even in the Intro and Preface. Such as defining Self Confidence as “an absence of fear and self-trust”. I think we all know what he means ny that definition don’t we ?!
Chapters 6 thru to 14 were laboured in my view. Where the depth of Douglas’ attempt to describe the mental state of the trader really was a little abstract at times and to be honest lost me.
For me the best bit of the book was his penultimate chapter on the Steps for Success :
1)Stay focussed on what you need to learn
2)Deal with Losses
- Predefine the loss at time of trade is vital
- Execute them immediately on their occurence
3)Become an expect at just one market behaviour
4) Learn how to execute your trading system flawlessly
5) Learn to think in Probabilities
6) Learn to be Objective
- You feel no Pressure to do anything
- You have no feelings of fear
- You have no sense of rejection
- There is no right or wrong
- You recognise what the market is telling you and you know what you have to do
- You can observe the market from the perspective of not being in a position even when you are.
- You are not focussed on money but the structure of the market
7) Learn to Monitor yourself
So if you can borrow this from a friend, download it as an e-book cheaply or get a 2nd hand one on ebay for the beginning third and last 2 chapters – it’s worth it.
Must Read…….!!
6 Effective Ways to Trading Success
1. Identify if you really want to be a trader. Is this truly your desire?
Before you can develop persistence and eventually achieve success in the tough trading game, you need to first identify if this is truly what you want to do. If you are only doing this for the money then the odds of you making it through the learning process is very slim. You have to be ‘foolish’ enough through your initial losses to believe that you can rise to the top 10% of profitable traders. Most traders learning curves are measured in years not weeks so trading is more like getting a degree than reading a book over the weekend.
2. Determine your motivation. Why do you want to be a trader?
Motivation comes from a deep reason why we want to achieve or have something. If you know why you’re doing what you’re doing, it gives you more energy to keep moving forward in learning and getting experience. If you are trading to make a quick buck, then you do not make that buck quickly you will join the quitters. If you are trading to have enough money to pay off your house in 5 years that will create the energy to drive you forward against the odds.
You can get through this first learning stage by writing down specifically all the things you want to have or accomplish through your trading. List all your desires and wants, all the rewards that will come through you not quitting the trading game. This is what will get you through if your heart is in it. You need a very big bucket of carrots waiting for you on the other side of trading success to get through the whips the market will hit you with while you are learning.
3. Outline Your Definite Action Step
Identifying your wants or desires speaks of what you want to achieve. Determining your motivation shows the reasons why you want to achieve what you want. Outlining your definite action step is necessary to know howyou will be able to achieve what you want.
When you know how to get what you want, it makes it easier to achieve it. To know how, it pays to do some research and planning of what needs to be done on your part. Be specific on each step you need to take. Identify at least two ways and plans on how you can achieve your goals.
4. Keep the right mindset, believe that you are going to be a winning trader. (more…)