jackb

Many years ago when I first got into trading (before the Web existed) and began asking around about what books I should read, Reminiscences of a Stock Operator was seemingly somewhere near the top of everyone's list. Even today (and even on this forum) this continues to be true. After reading it many years ago, I was fascinated by the story and wanted to know what other greatness the "Boy Plunger" went on to achieve from the point where the book left off. Sadly, it turns out that Livermore ended up losing all the money he had made during the '29 crash and eventually went bankrupt in '34. And it wasn't just Livermore's trading account that was on a vicious rollercoaster. He went through 5 marriages before he finally decided that life's ride was too much. He committed suicide in 1940. Ever since learning the whole story, I have always been quick to ask of those that recommend the book whether or not they know of the ugly epilogue. Twenty years later and I still get the same response of "no" (despite the ease that Web now offers to research such matters). As such, I'm not sure what to make of it all. To recommend only the book as some model of trading wisdom without reference to Livermore's sequel and final act, I find to be inappropriate and highly suspect. However, there is some truly great psychological wisdom to be discovered in telling the whole story. As far as trading wisdom, the book speaks volumes about inappropriate money management more so than it does in terms of trading strategies. Thank you in advance for checking out the poll and for any feedback.

I sense that you may be zeroing in on Forex for lack of understanding that there are many other "late night" markets that US traders tackle. In particular, I trade Hong Kong and European (German) index futures as well as commodity futures (gold, oil).

Blow, You are aware of how the story ends, aren't you?

I looked through the forum to see if the following story: http://articles.moneycentral.msn.com/news/article.aspx?feed=OBR&date=20101025&id=12211976 got much in the way of discussion by TL members. This news broke about a 45 days ago and didn't get as much media (TL) attention as I thought it would. Granted, while I do read a fair amount of business news, I seldom watch any TV business programming and maybe it was well covered there. From a trader's perspective, I had a hard time believing initially the reporters got their story straight. But there it was, BH's CFO (with the blessing of the Oracle you can bet) spewing out utter nonsense. Not a good lesson for any trader, Buffett included (yes, I just criticized Buffett...m'kay). Here's something to consider. If you are in the market looking to qualify for a mortgage or involved with any transaction that requires a look at your personal financial statement, you should now recognize that there's no reason to use current market prices should you have holdings that are underwater given that you have the "ability and intent" to hold them until they are "reasonably" valued. Poof: an instant bump in net worth. Of course, BH is utilizing essentially the same gimmick that the banks finagled after the crisis. If the banks can do it, BH can do it and if BH can do it, then...what the hell is Jeff Skilling doing in prison? All he was looking to do was to immediately book the future value of any business idea he came up with (no need to split hairs) And don't forget, if you own any property, there's a good chance that your top soil is full of precious metals (gold, diamonds, you name it...you value it). Poof: another nice bump in net worth. Oh shoot--I didn't throw away that tulip bulb, did I?

zdo, when you're scaling in and the market is below the intial leg, do your subsequent entries always mirror the same size as the original position or do you ever play with the size of of subsequent legs (e.g., 1, 2, 4, etc.)? Reiterating, when the market is below the opening leg.

Well, I may have misspoken with respect to you having a proven method when what I really meant to say was it's clear you've got something right going on (really, really right). Despite the interruptions.from periphereal matters, you continue to prove you have some special talents. There are a lot of people who can't trade profitably, even on paper. You come across as having done a lot due diligence and that makes me believe your are serious about letting loose those raw talents of yours so you can prove the thoughts invading your mind over the past few weeks; thoughts that slowly and ever more loudly have been growing and reiterating "this is doable" and "there's good money to be made". When I look at the 7 Ps, the one that stands out is performance; It's not by chance that all that work and diligence in tracking your paper profits has resulted in impressive performance. I think deep down, you know you were meant for this. And deep down you also understand that such talent needs to be let loosed to flourish. A forced reigning in of something you are meant to do, is not good for one's mental state and/or physical state. Maybe it's time to become a believer of the 10-Ts: true traders tackle temerity then tactically target tallying tremendous totals. Your time has come. Your time to tally some tremendous totals is now!. Let nothing stop you. Any reason Monday can't be your coming out day? Nobody expects you come out guns blazing. Just make a few trades to start out and book few hundred dollars in profit for 20 or 30 minutes of work and don't force anything. This would be a real solid way to "get your feet wet." You've got the talent. Here's rooting for you: :applaud:

Elder: Let me illustrate what I mean by showing a very recent trade – or rather a pair of trades. On Thursday, November 18, I was catching up on my office work using my laptop, while running a few day-trades, one after another, on a big screen. The 25-minute chart of the December Euro (not shown) was in an uptrend, and I bought a pullback below value on the 5-minute chart at 1.3633. Then, before I could grab a quick profit, the Euro reversed and my trade went under water. I monitored my growing loss, expecting a bounce. Finally I observed a bullish divergence and I decided to double up and put a hard stop at 1.3582. I bought my second contract at 1.3584, meaning my risk on the second trade was only 2 ticks. Prices rallied from that bullish divergence and I sold both contracts at 1.3617. My loss on the first contract was reduced to -$200, my gain on the second became $412.50, for a total gain of $212.50 ($201 after commissions and fees). Had I just banged out of the first contract at any time during that slide, I’d have taken a loss. Doubling up at a good spot turned a losing trade into a winner.

Elder is a trader as well. But, it is true that PTJ's results are certainly more public than Elder's and PTJ is managing other people's money which I'm not sure Elder does. There's some real interesting perspectives being posted, as I hoped there would be. One thing that seems to be running through a lot of the comments is "My definition of a losing trade is different than yours"? In particular, if I'm scaling in and haven't put my full position on, then I'm not yet able to really assess if it is a loser. I'm confident this wasn't the context Elder was talking about (in fact, the email I received from him walked through a specific trade...so, I'll go ahead and post that as well). This involves a trade that is clearly a loser. What you'll note is that it comes off as if the double up was a "spur of the moment" decision. And thereafter he had to "draw a firm line" with respect to stopping out of the trade, which implies the trade blew through his original stop point; one that was apparently a "soft line." When I said I was left slack jawed, this is what I was referring to. More importantly, he goes on to say that such a "technique" is popular among experienced daytraders (he didn't comment about whether these experienced daytraders were profitable). And that it's a fine strategy when you have small size on. I think the last point is particularly problematic. If you get used to doubling on small size, that only lays the foundation to double on larger size.

Yeah, but future growth is a function of current profits (you know, the time value of money). The sooner you start raking it in, the faster it's going to grow...and grow and grow. Don't put it off any longer. You've got a proven track record and as long as you know how to use the platform to get in and out of trade, I would worry about any of that other stuff. It's not worth missing out on profits. :thumbs up:

No, for real, it doesn't appear you're missing a single thing. Glad to hear your with Mirus. NT is quite possibly the greatest trading platform out there. And, wow, with that Zen-fire connection, you'll be able to trade really, really, REALLY fast. And did you know that's unfiltered data! You've got all the bases covered. As it stands now, each day you wait you're actually losing money. When do you think you'll make your first trade? Tomorrow the market should be rockin! There's sure to be lot's of tradable moves.

Just got Elder's latest email and I was left a bit slack jawed after reading it. Here's some pertinent excerpts: Today I would like to look into one of the techniques popular among experienced day-traders – doubling down on a losing position. This brings down the average cost and allows you to get out of a losing trade at a profit. This technique is absolutely deadly in inexperienced hands – all it will do is double up your losses. It is only recommended for experienced traders with excellent discipline. First point – doubling down is only recommended for relatively small-size losing trades. If you are in a large enough trade that the loss is stressing you – then you absolutely should not add to that trade and increase your stress level. Doubling down is acceptable only when you feel relaxed and unperturbed, even while your trade is under water. This is a key factor that almost everybody overlooks – doubling down is not just a technical trick; it is acceptable only for relatively small, unstressful trades. Next, the time to double up is when your losing long trade is hanging just above a bottom at which you are determined to draw a firm line. You must say: my hard stop goes here, and if my trade slides down to this level, I am out, automatically. To repeat my rules for doubling up: • It is acceptable only for relatively small positions. If the size of your open loss has you feeling stressed, then definitely no doubling. • Double up only after you see good technical signals • Place a hard stop on both halves of the trade as soon as you add the second position – a must! • Handle both positions as a single trade, monitor its average price, and get out as soon as you cut your loss. Contrast this with Paul Tudor Jones' statement: "Only losers add to losers.: Let's see how TL members feel about this topic...