I've read this book a couple times. I like it, but it's important to understand this is not a book about a stock trader. It's a book about a problem gambler who happens to gamble on the stock market. The biggest trade in the book is just a hunch the character has, and they make bank because of an earthquake. Having an act of God rescue your position is not a strategy.
There's a part where he sets up a trust so that his family will money the next time he goes bust (which happens constantly in the book), and tells his wife that he will beg and plead for the money but she has to refuse him. That feels to me like the behavior of an addict capitalizing on a moment of lucidity to protect loved ones from their addiction.
The real Jesse Livermore died penniless by suicide. The book doesn't address his depression, but I think you do see it in what's not in the book. They don't really talk about the character's friends. They don't seem preoccupied with their wife or their children.
required reading when youre a young buck starting out on a trading desk. its a short, quick read. there's 2 key takeaways for me when comparing today's markets and those of 100+ years ago: market dynamics are essentially unchanged & human emotions - fear and greed - drive those market dynamics in the same way.
Supposedly this is a roman a clef about Jesse Livermore's career. There's a lot of stuff in this book that makes sense of markets in ways that pretty much no other investing book I've ever read does. Some what I remember are bucket shops, tape sense, marketing campaigns for new stocks, risk of ruin (Livermore went bust over and over), and what amounts to compulsive gambling.
Honestly, nothing's changed. It's more modern; but otherwise all the same.
A big difference is central bank intervention. In the most recent Market Wizards book, the biggest gains came from traders who traded CB announcements and rumors.
Keep in mind that ultimately Livermore died broke. Trading stocks is a promise of wealth that's just a mirage. Smart long term investments is your best way to a wealthy future.
Died by his own hand, I would add.
The bucket shops sound like prop trading companies of today
legal bucket shops is exactly what they are
a market maker (MM) (citadel, optiver) etc makes money in the most part by filtering a trade from customer, and then agreeing or disagreeing with its sentiment. If you buy say msft at $480 and they think it will dip below $480 they will 'hold risk' and wait for it to dip to say $470 then execute your trade, making $10
except instead of aiming to make 2% on a single trade, they aim to make maybe 5 cents this way on a $480 stock, mostly holding for less than a few seconds, on millions of trades an hour
thus, robinhood very valuable because it encouraged retail investors to have high trading volume on complex instruments. that "order flow" then sold to MM like above for fixed rates or % shares.
MM are ultimately a good thing because they provide liquidity. there is always a person willing to take the other side of a trade when you click. if you trade in a boondocks stock market like singapore or new zealand you will quickly see the market run dry and you cant get out of a position
There are still bucket shops, but they call them "binary options brokers" now. If your broker only makes money when you lose money, they're not a broker, they're a casino.
I've read this book a couple times. I like it, but it's important to understand this is not a book about a stock trader. It's a book about a problem gambler who happens to gamble on the stock market. The biggest trade in the book is just a hunch the character has, and they make bank because of an earthquake. Having an act of God rescue your position is not a strategy.
There's a part where he sets up a trust so that his family will money the next time he goes bust (which happens constantly in the book), and tells his wife that he will beg and plead for the money but she has to refuse him. That feels to me like the behavior of an addict capitalizing on a moment of lucidity to protect loved ones from their addiction.
The real Jesse Livermore died penniless by suicide. The book doesn't address his depression, but I think you do see it in what's not in the book. They don't really talk about the character's friends. They don't seem preoccupied with their wife or their children.
required reading when youre a young buck starting out on a trading desk. its a short, quick read. there's 2 key takeaways for me when comparing today's markets and those of 100+ years ago: market dynamics are essentially unchanged & human emotions - fear and greed - drive those market dynamics in the same way.
Supposedly this is a roman a clef about Jesse Livermore's career. There's a lot of stuff in this book that makes sense of markets in ways that pretty much no other investing book I've ever read does. Some what I remember are bucket shops, tape sense, marketing campaigns for new stocks, risk of ruin (Livermore went bust over and over), and what amounts to compulsive gambling.
Honestly, nothing's changed. It's more modern; but otherwise all the same.
A big difference is central bank intervention. In the most recent Market Wizards book, the biggest gains came from traders who traded CB announcements and rumors.
Keep in mind that ultimately Livermore died broke. Trading stocks is a promise of wealth that's just a mirage. Smart long term investments is your best way to a wealthy future.
Died by his own hand, I would add.
The bucket shops sound like prop trading companies of today
legal bucket shops is exactly what they are
a market maker (MM) (citadel, optiver) etc makes money in the most part by filtering a trade from customer, and then agreeing or disagreeing with its sentiment. If you buy say msft at $480 and they think it will dip below $480 they will 'hold risk' and wait for it to dip to say $470 then execute your trade, making $10
except instead of aiming to make 2% on a single trade, they aim to make maybe 5 cents this way on a $480 stock, mostly holding for less than a few seconds, on millions of trades an hour
thus, robinhood very valuable because it encouraged retail investors to have high trading volume on complex instruments. that "order flow" then sold to MM like above for fixed rates or % shares.
MM are ultimately a good thing because they provide liquidity. there is always a person willing to take the other side of a trade when you click. if you trade in a boondocks stock market like singapore or new zealand you will quickly see the market run dry and you cant get out of a position
There are still bucket shops, but they call them "binary options brokers" now. If your broker only makes money when you lose money, they're not a broker, they're a casino.