BB new EP1 $140# PhotoGear - 摄影器材
k*8
1 楼
The Complete Trader
Jesse Livermore Discovers the Missing Piece in the Trading Jigsaw
From the age of 15, Jesse Livermore had become an expert at reading the
ticker tape that brought price and volume data from the trading floor of the
New York Stock Exchange.
Livermore had learned, with a high probability of being right, to predict
whether a stock was due to rise or fall.
He had also learned that the time delay involved in trading on the stock
exchange through a broker, rather than trading in a bucket shop, meant he
had to choose his trades carefully. He should accept only those trades that
offered the highest probability of large movements in price. The time-delay
meant he could no longer step into trades where he thought he could very
quickly grab a one-point profit.
Finally, he had learned through bitter experience to trust his own reading
of the tape in preference to listening to experts. He had also learned that
the insider tips he was regularly privy to were often worthless and that
they should be ignored.
Something was still missing from his trading though and Livermore tried to
find it.
First of all, rather than solely relying on the tape, Livermore began to
look further afield, reading trade reports, earnings figures and financial
statements. This gave him a better feel for the companies that should be
rising and those that should be falling.
Then, studying his own trading records, he found that although he was often
100 percent right in predicting small movements in prices, he was making
much less profit than he should in the bull market that prevailed. Livermore
realized that by jumping into and out of stocks on the basis of his daily
reading of the tape he was missing out on profits.
A Crucial Conversation - "It's a Bull Market"
Listening to the (repeated daily) advice of an old stager in the offices of
Fullerton, it suddenly dawned on him why he was making less profit than he
should. Whatever question the old fellow - known to everyone as Turkey
although his real name was Partridge - was asked about the market, he would
reply, "well, it's a bull market".
At first Livermore thought this was a mere platitude. Hearing "It's a Bull
Market" daily, he began thinking about it more. Then, listening to a
conversation between Turkey and Elmer Harwood - a young trader - he realized
that it was more than a platitude - it was the missing piece in his own
education.
Elmer: "Mr. Partridge, I have just sold my Climax Motors. My people say the
market is entitled to a reaction and that I'll be able to buy it back
cheaper. So you'd better do likewise. That is, if you've still got yours."
Turkey: "Yes, Mr. Harwood, I still have it. Of course!"
Elmer: "Well, now is the time to take your profit and get in again on the
next dip," said Elmer, "I have just sold every share I owned!"
Turkey: "No! No! I can't do that!"
Elmer: "Didn't I give you the tip to buy it?"
Turkey: "You did, Mr. Harwood, and I am very grateful to you.
Elmer: And didn't that stock go up seven points in ten days? Didn't it?"
Turkey: "It did, and I am much obliged to you, my dear boy. But I couldn't
think of selling that stock."
Elmer: "Why not?"
Turkey: "Why, this is a bull market!"
(The old fellow said it as though he had given a detailed explanation.)
Elmer: "I know this is a bull market as well as you do. But you'd better
slip them that stock of yours and buy it back on the reaction. You might as
well reduce the cost to yourself."
Turkey: "My dear boy, if I sold that stock now I'd lose my position; and
then where would I be? And when you are as old as I am and you've been
through as many booms and panics as I have, you'll know that to lose your
position is something nobody can afford; not even John D. Rockefeller. I
hope the stock reacts and that you will be able to repurchase your line at a
substantial concession, sir. But I myself can only trade in accordance with
the experience of many years. I paid a high price for it and I don't feel
like throwing away a second tuition fee. But I am as much obliged to you as
if I had the money in the bank. It's a bull market, you know."
Jesse Livermore realized that Turkey's consistent message was that the big
money was to be made not in trying to trade small moves on the tape but to
catch the major trend.
"Nobody can catch all the fluctuations. In a bull market your game is to buy
and hold until you believe that the bull market is near its end. To do this
you must study general conditions and not tips or special factors affecting
individual stocks. Then get out of all your stocks; get out for keeps! You
have to use your brains and your vision to do this; otherwise my advice
would be as idiotic as to tell you to buy cheap and sell dear. One of the
most helpful things that anybody can learn is to give up trying to catch the
last eighth-or the first. These two are the most expensive eighths in the
world."
With this step in place, Jesse Livermore's trading philosophy was complete.
Jesse Livermore Discovers the Missing Piece in the Trading Jigsaw
From the age of 15, Jesse Livermore had become an expert at reading the
ticker tape that brought price and volume data from the trading floor of the
New York Stock Exchange.
Livermore had learned, with a high probability of being right, to predict
whether a stock was due to rise or fall.
He had also learned that the time delay involved in trading on the stock
exchange through a broker, rather than trading in a bucket shop, meant he
had to choose his trades carefully. He should accept only those trades that
offered the highest probability of large movements in price. The time-delay
meant he could no longer step into trades where he thought he could very
quickly grab a one-point profit.
Finally, he had learned through bitter experience to trust his own reading
of the tape in preference to listening to experts. He had also learned that
the insider tips he was regularly privy to were often worthless and that
they should be ignored.
Something was still missing from his trading though and Livermore tried to
find it.
First of all, rather than solely relying on the tape, Livermore began to
look further afield, reading trade reports, earnings figures and financial
statements. This gave him a better feel for the companies that should be
rising and those that should be falling.
Then, studying his own trading records, he found that although he was often
100 percent right in predicting small movements in prices, he was making
much less profit than he should in the bull market that prevailed. Livermore
realized that by jumping into and out of stocks on the basis of his daily
reading of the tape he was missing out on profits.
A Crucial Conversation - "It's a Bull Market"
Listening to the (repeated daily) advice of an old stager in the offices of
Fullerton, it suddenly dawned on him why he was making less profit than he
should. Whatever question the old fellow - known to everyone as Turkey
although his real name was Partridge - was asked about the market, he would
reply, "well, it's a bull market".
At first Livermore thought this was a mere platitude. Hearing "It's a Bull
Market" daily, he began thinking about it more. Then, listening to a
conversation between Turkey and Elmer Harwood - a young trader - he realized
that it was more than a platitude - it was the missing piece in his own
education.
Elmer: "Mr. Partridge, I have just sold my Climax Motors. My people say the
market is entitled to a reaction and that I'll be able to buy it back
cheaper. So you'd better do likewise. That is, if you've still got yours."
Turkey: "Yes, Mr. Harwood, I still have it. Of course!"
Elmer: "Well, now is the time to take your profit and get in again on the
next dip," said Elmer, "I have just sold every share I owned!"
Turkey: "No! No! I can't do that!"
Elmer: "Didn't I give you the tip to buy it?"
Turkey: "You did, Mr. Harwood, and I am very grateful to you.
Elmer: And didn't that stock go up seven points in ten days? Didn't it?"
Turkey: "It did, and I am much obliged to you, my dear boy. But I couldn't
think of selling that stock."
Elmer: "Why not?"
Turkey: "Why, this is a bull market!"
(The old fellow said it as though he had given a detailed explanation.)
Elmer: "I know this is a bull market as well as you do. But you'd better
slip them that stock of yours and buy it back on the reaction. You might as
well reduce the cost to yourself."
Turkey: "My dear boy, if I sold that stock now I'd lose my position; and
then where would I be? And when you are as old as I am and you've been
through as many booms and panics as I have, you'll know that to lose your
position is something nobody can afford; not even John D. Rockefeller. I
hope the stock reacts and that you will be able to repurchase your line at a
substantial concession, sir. But I myself can only trade in accordance with
the experience of many years. I paid a high price for it and I don't feel
like throwing away a second tuition fee. But I am as much obliged to you as
if I had the money in the bank. It's a bull market, you know."
Jesse Livermore realized that Turkey's consistent message was that the big
money was to be made not in trying to trade small moves on the tape but to
catch the major trend.
"Nobody can catch all the fluctuations. In a bull market your game is to buy
and hold until you believe that the bull market is near its end. To do this
you must study general conditions and not tips or special factors affecting
individual stocks. Then get out of all your stocks; get out for keeps! You
have to use your brains and your vision to do this; otherwise my advice
would be as idiotic as to tell you to buy cheap and sell dear. One of the
most helpful things that anybody can learn is to give up trying to catch the
last eighth-or the first. These two are the most expensive eighths in the
world."
With this step in place, Jesse Livermore's trading philosophy was complete.
