Jesse Livermore – known as the Godfather of Wall Street traders. Here are valuable tips from his career – still relevant 100 years later.
Livermore believed that there were certain traits required of a successful trader and that trading was definitely not for everyone. This is not a vocation for the stupid, the mentally lazy or those with a lower emotional balance, and especially not for those who expect to get rich quick.
One of the keys to successful trading is understanding the time element . Livermore respects the element of time insofar as it believes that no one should use the market as a mechanism for getting rich quick. Looking at the market in this way is extremely dangerous and usually gives exactly the opposite results.
Emotional balance , something Livermore struggled with later in life and that ultimately led to his tragic death, is vital as the success of the stock market is an emotional rather than an intellectual battle. One of the qualities that Livermore believes is necessary for successful trading is balance. He knew that a healthy state of mind – one that should not be influenced by hopes or fears – was a key skill of a successful trader.
Patience , which means waiting for the right opportunity, is another must-have skill. A trader’s lack of patience is a weakness and a major cause of loss. Also, keeping quiet and keeping your losses and gains to yourself is a crucial skill. Work ethic is also essential for ongoing market research.
Livermore sees stock speculation as a full-time job because the market requires someone’s full attention to stand out. Just as successful doctors or lawyers need to be well-trained and hard-working in their professions, stock traders are no different. Most people do not see the stock market as something that requires as much effort as the other professions mentioned. Most see the market as easy and effortless, because to participate, all you have to do is instruct a broker to enter into a trade.
Or you just have to hear a guy from an outsider and then act on that information by making a deal and waiting for the money to arrive. While no one in their right mind would allow you to operate on him or defend him in court without proper training and certifications, the same should apply to stock trading . This is definitely a skill that needs to be improved over time. Livermore treats the stock market as a business and is constantly looking for new ways to improve its skill set.
Another key lesson Livermore teaches us is that trading every day or every week is a losing game and cannot be done with great success. He taught us that there are many opportunities to make money by trading stocks, and there are times when you should not trade at all. It is healthy for him to take many vacations and vacations when the market does not offer its best opportunities.
Livermore has always been very vigilant about its constant quest to analyze market price movements and individual stocks. This discipline forces him not to trade all the time.
By standing aside and being observant, we can see more clearly the basic changes than if one constantly observes small fluctuations from day to day.
Junior Trader Nikolay Yordanov
Varchev Absolute Trader
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