Monday, April 14, 2014

More from Adam Hamilton on the Wisdom of Jesse Livermore

(Chapter V) … “The customers, who were all eager to be shoved and forced into doing things so as to lay the blame for failure on others...”


In a wonderfully entertaining narrative about a battle-hardened and wealthy old speculator named Mr. Partridge, Jesse Livermore exposes one of the most dangerous character flaws a speculator can have, a lack of absolute personal accountability and responsibility.  Unless a speculator takes full personal responsibility for all of the trades that he chooses to make, win, lose, or draw, he will never achieve great success.


Just as today, the majority of speculators back in Mr. Livermore’s time wanted to congenitally blame others for their own trades that turned sour.  Rather than accepting the full weight of their own decisions, they desperately wanted their brokers or advisors to push them into trades so these speculators could avoid accepting the responsibility themselves for failed trades.  Elsewhere Livermore talks about speculators perpetually blaming external manipulation for their own bad bets, another way of refusing to accept full responsibility for the fruits of their own actions.


Just like a child who never learns to be responsible, a speculator who cannot fully accept any possible outcome on any trade that he freely chose to make is doomed to immature mediocrity.  If you or I use our own God-given brains and decide to execute on a particular trade, we cannot blame anyone else but ourselves if the trade doesn’t work out.  It doesn’t matter where the information came from that led to the trade, it is ultimately the responsibility of the individual speculator who decided to execute on this information regardless of the outcome.


So before you freely choose to launch a trade, while you are gathering information and running reconnaissance, realize that you most hold yourself absolutely accountable for your own decision.  If you win, great, congratulations and many kudos on another successful trade!  If you lose however, the loss is your fault alone and your responsibility alone since you freely chose to make the trade.


Every speculator must always be ready to win or lose on each and every trade, and to fully accept responsibility for their own decisions always.  Losses are simply part of this grand game and just have to be accepted, since no one but God can see the future before it happens.  When you freely choose to pull the trigger on your own trade, the outcome is always 100% your own responsibility and no one else’s.  If you cannot accept this truth, then you shouldn’t be speculating.


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"There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time."J Livermore Manchester City FCl Crude Palm Oil


From Dragons and Bulls by Stanley Kroll
Intro and Foreword
The Importance of an Investment Strategy
5 The Art of War, by Sun Tau (circa 506 BC) and The Art of Trading Success (circa AD 1994)
That's the way you want to bet/a>
Long-term v Short term trading
Technicals v Fundamentals
Perception v Reality
Part 1: Winners and Losers
Part 2: Winners and Losers
Sun Tzu: The Art of War
Those who tell don't know, those who know don't tell
Why there is no such thing as a "bad market"
The Secret to Trading Success
The Experts, do they know better?
Risk control and money management
Good advice
The 'good bets' business by Larry Hite
Don't lose your shirt
Ed Sykota's secret trend trading system